When it comes to taxes in the UK, many individuals focus on the obvious deductions like personal allowances and pension contributions. However, there are several lesser-known tax breaks that could save you a significant amount of money.
Here’s a quick rundown of 10 tax deductions that are often overlooked:
Work-From-Home Expenses: If you’ve worked from home, even partially, you might be eligible for tax relief on additional household costs, such as heating and electricity. The flat-rate relief is £6 per week, or you can claim actual costs with evidence.
Marriage Allowance: Couples can transfer up to 10% of their personal allowance to their spouse, potentially saving up to £252 per year if one partner earns below the personal allowance threshold.
Professional Memberships and Subscriptions: If you pay for memberships to professional bodies or trade unions necessary for your work, these could be deductible. Just make sure the organisation is HMRC-approved.
Charitable Donations: Donations to registered charities can qualify for Gift Aid, allowing the charity to claim 25% extra, while higher-rate taxpayers can claim back the difference on their tax return.
Uniform and Workwear Maintenance: If your job requires a uniform that you wash, repair, or replace at your expense, you may be eligible for a tax deduction. The flat-rate relief depends on your profession.
Childcare Costs via Tax-Free Childcare Scheme: You can claim up to £2,000 per child per year in childcare costs for children under 12 (or 17 if disabled) through the government’s Tax-Free Childcare scheme.
Investment Reliefs: Investments in schemes like the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) offer generous tax breaks, including up to 50% income tax relief.
Capital Losses on Investments: If you’ve made losses on your investments, these can be offset against gains in the same or future tax years, potentially reducing your capital gains tax bill.
Rent-a-Room Relief: Renting out a room in your home can earn you up to £7,500 tax-free under this scheme, provided you meet the conditions.
Relocation Expenses for Work: Employers can pay or reimburse up to £8,000 in relocation expenses tax-free if the move meets specific criteria related to your job.
Final Thoughts: Tax reliefs and deductions are there to help lighten your financial burden, but navigating them can be complex. If you suspect you’re missing out, consult a tax advisor or review HMRC guidelines. Small savings can add up, and claiming all the deductions you’re entitled to could make a noticeable difference to your finances.
