More workers than ever are finding themselves getting close to or exceeding the higher rate tax bracket, recent figures have revealed. But this is particularly true for workers in Scotland, where the threshold has failed to keep up with wages and falls far below the England and Wales threshold - £43,662 to £50,270. In addition,
More workers than ever are finding themselves getting close to or exceeding the higher rate tax bracket, recent figures have revealed.
But this is particularly true for workers in Scotland, where the threshold has failed to keep up with wages and falls far below the England and Wales threshold – £43,662 to £50,270.
In addition, higher rate tax in Scotland is 41 per cent against 40 per cent in the rest of the UK.
In this blog, therefore, we are going to share nine essential tips employees can use to keep themselves out of the higher rate tax bracket and take home more of what they earn.
Flat rate expenses
If you incur work-related expenses in the course of your job, you may be able to claim tax relief. You can claim tax relief on flat rate expenses if you’re employed by someone and:
- you clean your work uniform
- and/or spend your own money on repairing or replacing equipment you need to do your job.
The amount you can claim depends on your job and the industry you work in. You can learn more about the scheme here.
Claim tax relief on workplace pension contributions
Ensure HM Revenue & Customs (HMRC) is aware of any additional workplace pension contributions you make each year.
Make full use of your Annual Allowance
The Annual Allowance – currently £40,000 – is the amount of money you can save in your pension pot in a tax year (6 April to 5 April) before you have to pay tax.
Gifts to charity
Claim relief for Gift Aid payments through your Self Assessment tax return or by asking HMRC to amend your tax code. In both cases ensure you keep records showing the date, the amount, and which charities you’ve donated to.
Working from home?
While millions of people have been told to work from home during the coronavirus pandemic, few are aware that they can claim tax relief for the additional costs incurred.
If your employer does not reimburse costs, you can claim up to £6 per week under the flat rate allowance scheme. Click here to learn more.
Business miles
If you are travelling in your own car for business purposes, and your employer is not reimbursing you, you may be able to claim a deduction from your income.
Do note, you can generally not claim tax relief for travel between your home and your permanent place of work.
Professional fees and subscriptions
Did you know that you can claim tax relief on personally paid professional membership fees or annual subscriptions to approved professional bodies or learned societies if being a member of that body or society is relevant to your job?
Subsistence costs
Employees can claim additional tax relief for subsistence if the expenditure is incurred through business travel or an overnight business trip.
Marriage Allowance
The Marriage Allowance allows you to transfer £1,260 of your Personal Allowance to your basic rate taxpaying spouse or civil partner, reducing their tax bill by up to £252 in the tax year (6 April to 5 April the next year).
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