10 Simple Ways to Escape Away from Taxes
The government is very keen on applying taxes and it is a good time to make some smart and tax-free changes in your savings and investments.
Recently, the tax avoidance has become a bad-term yet there are many legal ways to escape away from tax. Always go for legit companies like EZ tax Return for taxation purposes and you may also use coupon codes for EZ Tax Return for saving much more on service fees. Following are the ways which are surely worth looking at.
Use Isa Allowance
Everybody has a tax-free Isa allowance annually, you can save it in cash, invest in shares and stocks or use both as a mixture. Although, Isa cash rates are not as good as high street savings but they are totally tax free. By paying tax on your savings in a normal way, you can have many benefits which Isa cash offers.
Isas are also very beneficial when it comes to capital gains tax. For instance, if you have money in shares and stocks Isa, whenever you make a profit, you don’t have to pay capital gains tax.
There is an option of junior Isas as well so you don’t need to pay tax on any savings held for your children and grandchildren.
Use Your Partner’s Tax Allowance
If your partner pays any less amount of money in the name of tax then it is beneficial to transfer some of your assets to them. In this way, you will pay lower tax bills.
Save into a Pension
The concept of workplace pensions is increasing day by day as it gives hope for a better future to many people. Generally, you don’t pay tax on the savings that you put aside because it comes straight from your pay and you avoid a big amount to pay for tax. It goes as a pension contribution of £100 costs only 40% taxpayer.
So pensions are a great source to save your money, but you might have to pay income tax at the time of receiving your retirement money. The longer and more you save, the more you will have when you will be older.
Use Children Vouchers
You can surely use this option to get rid of paying taxes if you have children in paid childcare. Your employer takes money from your salary, hence, you don’t have to pay tax on it and then pays it to a childcare organization.
Later, you spend this money to pay your childcare provider via childcare supplier, isn’t it great?
Eat in a Healthy Way
Many foods like chocolates, biscuits, pizzas, and cakes have Vat levied on them which costs a lot of your money. On the other hand, everyday food such as vegetables and fruits does not include any Vat on it.
If you eat fruits and veggies then you can stay healthy as well as you don’t even have to pay for Vat. By eating healthily, you avoid paying so much Vat and let me tell you smoking and drinking are heavily taxed. So make a positive change, eat healthily and avoid paying Vat on unhealthy foods.
Where You Buy Your Insurance From?
If you buy stuff like car and home directly from the person then it at least costs you 20% tax. But, an insurance premium tax is charged on general insurance policies which costs you only 6%. This is why it is always better shopping around.
What would you prefer paying 6% tax or 20%?
Capital Gains Tax Allowance
Investing in shares and stocks means having a capital gains tax allowance. A great part is that if your spouse is not using their tax allowance, you can transfer your assets to them and take advantage.
Most of us prefer saving money for the point where we become older. However, there is a little point in doing so. I am not asking you to spend all of your money but getting a new car or having a memorable vacation won’t do any harm. In fact, doing such things will make you happy and you will have to worry less about paying taxes.
Give Something to Charity
Giving something to charity is a good choice to make. If you give at least 10% of your assets to charity then inheritance tax rate on the remaining assets will be decreased from 40% to 36%.
Be smart and show the transaction as a loan. If you do so, the investment will not be taxable.