Personal Finance Clinic Tax Planning Tips

Many of you will be able to take advantage of some tax planning tips to help you keep hold of more of your hard-earned cash. Today, I’m discussing pensions, redundancy and ISAs.

Claim tax relief on pensions

Pensions are a fantastic way to save for retirement because personal contributions receive tax relief. In other words, instead of handing over tax to HMRC, it goes into your own pension pot. For example, if you make a £100 pension contribution, this is topped up to £125 to take account of basic rate tax-relief (20%). If you pay tax at a higher rate, you are entitled to more tax relief.

Crucially, many pension schemes only automatically apply tax relief at the basic rate of tax (20%) so if you know you are paying Income Tax at 40% or 45%, you need to make sure the additional 20% or 25% is being credited to you.

Check with your HR Department to make