Income tax calculator – five quick ways to lower your bill in 2022

2) Donate to charity

Donating to charity is tax-exempt, whether made using gift aid or directly from a worker’s salary or pension – known as ” pay donation.

If you make a charitable donation of £80 under gift aid, this is treated as £100 under the tax rules, of which £20 has been withheld by HM Revenue & Customs. The charity can then claim that extra £20 to reach £100. So a basic rate taxpayer effectively gets a 20% tax break on a £100 donation.

A higher rate taxpayer can get an additional £20 tax relief with £25 for an additional rate taxpayer. This request is made in the tax return for those who are on self-assessment.

3) Marriage tax allowance

Marriage Allowance allows spouses or civil partners to pass on up to £1,260 of their tax-free personal allowance – currently £12,570 – to their other half, reducing their partner’s tax bill by up to £252 a year. year.

To benefit from it, the partner who transmits his allowance must be a non-taxpayer, while the beneficiary must be a taxpayer at the basic rate. It can be particularly useful for families in which one of the partners takes time off from work to take care of the children.

Couples can receive a rebate for any unclaimed allowance, dating back up to five years.

4) Check your tax code

Millions of people pay too much tax every year, partly because of incorrect tax codes sent by HMRC. Do not assume that the tax code provided to you by the tax authorities is correct.

HMRC does not wait until a return has been lodged by the January 31 deadline before sending new codes in February, meaning it often does not have the most up-to-date information. He’s even been known to make huge mistakes, like sending employees in Wales Scottish workers’ tax codes.

5) Challenge HMRC on rebates

As above, HMRC doesn’t always get it right and incorrect tax codes, among other issues, can cause workers to pay more tax than they actually owe. If this is the case, it is important that you ask HMRC to return your hard earned money.

You can claim a tax refund for free on the HMRC website. Beware of intermediary agents who offer to claim the money on your behalf and take hundreds or even thousands of pounds in commission in the process.

This guide is kept up to date with the latest advice

Esther L. Steinbach