| If you are really well-to-do you could employ | | | | form of variable sums of money paid into your |
| an account to look after your tax affairs, | | | | bank or building society account at intervals |
| but for most of us this is not a realistic | | | | (sometimes as frequently as every month), or |
| proposition. The resultant charge for the | | | | rolling up into a lump sum at the end of the |
| accountant's services could well exceed any | | | | investment period. These investments are tax |
| saving achieved, so we have to deal with the | | | | free to the point that it is not even |
| problem ourselves. This is not too bad if it | | | | necessary to mention them to the taxman; |
| is dealt with in a logical order rather than | | | | money laundering regulations however will |
| the system which is employed by many - last | | | | necessitate you providing proof of identity |
| minute blind panic! | | | | i.e. a passport or similar. |
| | | | |
| It is fairly certain that most of us have | | | | Many tax affairs can be difficult and there |
| been in that position at some time, and it | | | | are some strange sounding clauses in relation |
| certainly does not produce the best results. | | | | to coding, so if you are still in doubt then |
| So you are going to be your own accountant. | | | | telephone your tax office and ask for help - |
| You start with a big advantage - a good | | | | they are always ready to provide explanations |
| knowledge of your financial situation and | | | | to solve the very many problems which can |
| records. Well you do, don't you? Of course | | | | arise. Taxation is a complex subject and few |
| you do, because during the last tax year you | | | | people can get by without assistance. The tax |
| have not destroyed one piece of paper which | | | | authorities recognise this fact, and they |
| could have a bearing on the tax due. | | | | provide a very helpful website at where many |
| | | | queries can be resolved. |
| You will have kept clear records if you are | | | | |
| self employed, but even if you are on PAYE | | | | Other items worthy of attention are working |
| you must retain anything which may be | | | | family credit if your income from employment |
| relevant. This will not be a massive heap of | | | | is low enough to qualify, or child tax credit |
| paper, but must include the obvious | | | | if you are the main person responsible for |
| essentials such as bank statements, building | | | | the child or children on a day to day basis. |
| society books, dividend vouchers and any | | | | Check the information on On the other hand |
| documents from the tax office. | | | | your job centre will advise you whether you |
| | | | are likely to qualify for unemployment |
| One item which you will almost certainly have | | | | benefit as a result of recent loss of work. |
| received from the taxman is your 'notice of | | | | |
| coding'. Put simply, this tells you how much | | | | After age 60 (and increased for the over 65s) |
| you can earn before tax becomes payable. If | | | | you can call 0800 169 0133 to find out if you |
| in doubt about what it means read the leaflet | | | | can get a guaranteed minimum income by |
| which accompanies the notice; it explains the | | | | qualifying for pension credit' |
| significance of your code number in a very | | | | |
| straightforward way. | | | | An important point which applies to any and |
| | | | all attempts to reduce your tax burden is to |
| It is very important to check that the | | | | stay on the right side of the law. Never |
| figures used are correct. The current tax | | | | deliberately falsify the figures which you |
| free earning limit is £5035 per year | | | | submit to the Inland Revenue unless you fancy |
| although there are variations for older | | | | an uncomfortable time in a cell, and make no |
| persons. If you do pay tax, check out your | | | | mistake - the authorities are ready to pounce |
| spouse, not to see if they will pay some for | | | | on anyone suspected of tax evasion. However, |
| you but to ensure that they use all their tax | | | | tax avoidance i.e. the ordering of your |
| free allowance. If they don't, look at the | | | | affairs in such a way as to attract the |
| possibility of moving some of your | | | | absolute minimum tax liability within the |
| investments to them to use the surplus | | | | regulations applying at the time, is not only |
| allowance. | | | | legal but eminently sensible. |
| | | | |
| Alternatively you should consider moving | | | | No one will thank you for paying too much |
| investments into tax free ISAs. You can | | | | tax, and you will not be happy if you find |
| invest in various types of ISA but there is | | | | that you are 'guilty' of such carelessness, |
| an annual limit on the amount which you can | | | | so do not help to put a smile on the face of |
| invest. Your return on these can be in the | | | | the Chancellor of the Exchequer. |