With the income tax personal tax-free allowance being frozen at £12,570 for the 2023/24 tax year, it is vital to make use of some handy tax saving tips to help minimise the income tax liability due, which I have detailed below as follows;
Use of home as office allowance
If you work from home, you may be able to claim a proportion of your costs for things like heating, electricity, Council Tax, mortgage interest, telephone and internet costs by dividing the costs over the number of rooms you use for your business, or the amount of time you spend working from home. Alternatively, you can avoid using complicated calculations to work out your business expenses by using flat rate ‘simplified expenses’ based on the number of hours you work from home, and these are a tax deducible expense for your business.
Direct Peak customers can take advantage of our handy ‘Use of Home as Office’ calculator, which will give you an accurate figure to claim against your business profits.
Claiming mileage
If you are self-employed, you can claim all the motoring costs related to the business such as fuel, insurance, repairs and servicing. Alternatively, you can use ‘simplified expenses’ to cover all business motoring costs which I have detailed as follows:
| First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year | |
| Cars and vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
Employees of limited companies can also use the ‘simplified expenses’ rates to claim 45p per mile from their employer for any business mileage they do. If the employer pays less than the 45p per mile rate, you will be able to claim income tax relief with HMRC by completing a ‘P87’ form.
Telephone & Internet costs
The costs incurred for business internet usage and calls made using your personal mobile phone can be claimed as an expense. You’re also able to reclaim the VAT element of the business internet and calls.
You may also be able to claim a portion of the expenses relating to the purchase of the mobile phone, provided it is used for business purposes.
Contribute to your pension
You can get tax relief on private pension contributions worth up to 100% of your annual earnings, this will be 20% up to the amount of any income you have paid 40% tax on, and 25% relief on any income you have paid 45% tax on, essentially extending the basic rate tax band by the amount of private pension contribution.
You receive an annual allowance of £60,000 per year which is the maximum amount you can pay into a pension pot before you have to pay tax. If you use all of your annual allowance for the current tax year, you might be able to carry over any annual allowance you did not use from the previous 3 tax years.
Transfer your personal allowance to your partner
The marriage allowance lets you transfer £1,260 of your Personal Allowance your husband, wife or civil partner. This will then reduce their tax by up to £252 in the tax year, provided the lower earner who is transferring their allowance has an income below their personal allowance.
You can backdate your claim to include any tax year since 5 April 2018 that you were eligible for the Marriage Allowance. Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the year’s you’re backdating.
How can I save Personal Tax in 2023 – Donating to a charity
The most common way to donate to a UK registered charity or community amateur sport clubs (CASCs) is through Gift Aid. Gift Aid can only be claimed by UK taxpayers and is effectively the repayment of basic rate tax on the donation. This is not repaid to the donor but is given to the charity as they can claim an additional 25p for every £1 they receive. If you are a higher (40%) or additional rate (45%) taxpayer, you are able to claim the difference between your tax rate and the basic rate of tax (20%) on your total charitable donation.
To do this, you must register for gift aid with a ‘Gift Aid Declaration’, keep a record of your gifts and gift no more than four times your total income and capital gains tax payment for the tax year in question.
Direct Peak are on hand to help our clients save as much personal tax in 2023 and beyond, get in contact with us today to discuss the next steps in your business and how we can help you save as much personal tax as possible!
Looking for tax advice and accountancy services
With the income tax personal tax-free allowance being frozen at £12,570 for the 2023/24 tax year, it is vital to make use of some handy tax saving tips to help minimise the income tax liability due, which I have detailed below as follows;
Use of home as office allowance
If you work from home, you may be able to claim a proportion of your costs for things like heating, electricity, Council Tax, mortgage interest, telephone and internet costs by dividing the costs over the number of rooms you use for your business, or the amount of time you spend working from home. Alternatively, you can avoid using complicated calculations to work out your business expenses by using flat rate ‘simplified expenses’ based on the number of hours you work from home, and these are a tax deducible expense for your business.
Direct Peak customers can take advantage of our handy ‘Use of Home as Office’ calculator, which will give you an accurate figure to claim against your business profits.
Claiming mileage
If you are self-employed, you can claim all the motoring costs related to the business such as fuel, insurance, repairs and servicing. Alternatively, you can use ‘simplified expenses’ to cover all business motoring costs which I have detailed as follows:
| First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year | |
| Cars and vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
Employees of limited companies can also use the ‘simplified expenses’ rates to claim 45p per mile from their employer for any business mileage they do. If the employer pays less than the 45p per mile rate, you will be able to claim income tax relief with HMRC by completing a ‘P87’ form.
Telephone & Internet costs
The costs incurred for business internet usage and calls made using your personal mobile phone can be claimed as an expense. You’re also able to reclaim the VAT element of the business internet and calls.
You may also be able to claim a portion of the expenses relating to the purchase of the mobile phone, provided it is used for business purposes.
Contribute to your pension
You can get tax relief on private pension contributions worth up to 100% of your annual earnings, this will be 20% up to the amount of any income you have paid 40% tax on, and 25% relief on any income you have paid 45% tax on, essentially extending the basic rate tax band by the amount of private pension contribution.
You receive an annual allowance of £60,000 per year which is the maximum amount you can pay into a pension pot before you have to pay tax. If you use all of your annual allowance for the current tax year, you might be able to carry over any annual allowance you did not use from the previous 3 tax years.
Transfer your personal allowance to your partner
The marriage allowance lets you transfer £1,260 of your Personal Allowance your husband, wife or civil partner. This will then reduce their tax by up to £252 in the tax year, provided the lower earner who is transferring their allowance has an income below their personal allowance.
You can backdate your claim to include any tax year since 5 April 2018 that you were eligible for the Marriage Allowance. Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the year’s you’re backdating.
How can I save Personal Tax in 2023 – Donating to a charity
The most common way to donate to a UK registered charity or community amateur sport clubs (CASCs) is through Gift Aid. Gift Aid can only be claimed by UK taxpayers and is effectively the repayment of basic rate tax on the donation. This is not repaid to the donor but is given to the charity as they can claim an additional 25p for every £1 they receive. If you are a higher (40%) or additional rate (45%) taxpayer, you are able to claim the difference between your tax rate and the basic rate of tax (20%) on your total charitable donation.
To do this, you must register for gift aid with a ‘Gift Aid Declaration’, keep a record of your gifts and gift no more than four times your total income and capital gains tax payment for the tax year in question.
Direct Peak are on hand to help our clients save as much personal tax in 2023 and beyond, get in contact with us today to discuss the next steps in your business and how we can help you save as much personal tax as possible!
Dedicated Contact
Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
Tax Efficient
Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.
Quick Turnaround
We aim to turn around the annual accounts and tax returns quickly to give you visibility of your tax bill well in advance of it being due.
