Brits are all feeling the squeeze on household incomes, the largest since the 1950s, whether that be due to inflation soaring, rising interest rates or fuel costs.
We are all looking for new ways to maximise our income, and advisers told FTAdviser that one way to do that could be finding ways to help clients save money on their tax bills.
Here are some ways to possibly save a client some money at the end of this new tax year:
1. Check the tax code
If the client is a full or part-time employee it’s likely that they are to be paying tax via pay-as-you-earn. This means the income tax a client has to pay is deducted at source and goes directly to HM Revenue & Customs.
Their tax code is essentially a few numbers and a letter, such as 1257L, and it is shown on the client’s payslip. Those digits determine the amount of tax your client is paying, and it’s not uncommon for errors to creep in.
For example, if a client once had a company car with an engine that consumed enough fuel to fill a small jet, but now has switched to an eco-friendly model, their tax code should be adjusted to ensure your client is paying less.
If in doubt about your client’s tax code, speak to them or their employer.
Carolyn Matravers, chartered financial planner at Old Mill (pictured left) said: “Many of us will be familiar with the HMRC tax codings that come through, but any change in circumstance or tax rules, can generate a change.
"Never assume that the change is correct, always check it."
"Good practice would be to send a copy of any tax notice to your accountant or professional adviser for them to sense check it for you and if you are employed, ask your payroll department to explain how the tax on your benefit package is calculated so that you can understand it."
"This helps them to sense check it is correct and will highlight any errors. If you do feel it is wrong then gather together all your supporting paperwork (P60s, payslips and your HMRC tax notice) and call HMRC.
"They will require evidence, but will talk things through and make any changes necessary."
2. Claim allowable expenses
For clients who are self-employed, there are a host of allowable expenses that can help to bring their tax bill down.
These possible expenses can include office running costs, train fares and website fees, and should be taken off the overall profit, meaning the client only pays tax on the amount left over after these costs.
Matravers commented: “It is always a good idea when self-employed to keep a timeline, as well as all receipts on expenses incurred during the course of the business and a top tip would be to write a small narrative by the side of it.