This post is all about how to save your corporation tax, income tax and Inheritance tax in UK. People in UK earning above the taxable limits are eligible to pay taxes and this is where investments come into picture which help in reducing the total amount of tax that a person has to pay. Firstly, every person paying tax should have knowledge about the Income Tax Act that shows the investments and expenses that enables a person to limit their taxable income and help paying less tax. If you are running a business the you have to pay corporation tax and if you have service then VAT is also added to your tax list.
In United Kingdom (UK) one will come across many taxes such as VAT, Income tax, National Insurance, Motoring taxes, Inheritance tax, Corporation tax, Capital gains tax, Stamp duty, Air Passenger Duty, Insurance Premium tax, PAYE, Council Tax and other taxes. Read more on how to save these taxes.
How To Save Tax in UK?
Following are some of the ways that can be considered while saving tax especially for the people who are beginners in the field and will be paying tax for the first time:
1. A beginner while making tax savings should always rely on or opt for products that offer fixed returns. In doing this, the investor can actually manage his investments and can save taxes eventually. One of the very much relied products is the fixed deposits offered by the banks having a lock in period of 5 years which offers good returns and saves on tax too. This way of saving tax is the most guaranteed of all.
2. Don’t rely too much on the ELSS type of mutual funds that are provided with only 3 years of locking period and provide tax savings on investments through equity. It should also be noted that the tax saving schemes using equity funds provide high as well as low returns. Hence either the total investments can double up in the said period or can reduce to less than half.
3. One of the very wise ways for a beginner to save tax is to having educational loan or housing loans. If at all the person is not having any loans to pay off, then investments can be done using postal schemes or even insurance products for saving tax.
4. If at all an investor exhausts the investment limit then under section 80C he/she can invest in the tax saving infrastructure bonds as well and save some more tax.
It is very important to save tax but choosing from the various options available in the market is fairly difficult. Every company today is offering attractive tax saving packages that might appear to be very attractive virtually but at the end of the day might not give beneficial returns. In these circumstances, when uncertainty is more, care should be taken while planning for tax savings. So take proper planning and acquire knowledge on some wise ways to save tax.
These are some of the tips and tricks to save corporation tax, inheritance tax and income tax in UK. If you got other ways, then please add them in the comments section so that it will help others too in saving their taxes.