Hey folks! 💰 Want to save some serious cash on taxes? There’s a nifty little HMRC trick that might let you pocket up to £18,570 tax-free! Normally, most of us get a standard Personal Allowance of £12,570 before the taxman comes knocking. But if you play your cards right, combining this with the Starting Rate for Savings and Personal Savings Allowance could help you snag a bonus.
Here’s the lowdown: If your overall income, including savings, is less than £18,570 a year, you could benefit from this sweet situation. Start off with your basic £12,570 tax-free Personal Allowance. Then, if you’re making less than £12,570 from work or a pension, an additional £5,000 from the Starting Rate for Savings can also become part of your tax-free income. But wait, there’s more! Add another £1,000 tax-free from the ordinary Personal Savings Allowance. 🤑✨
Money guru Martin Lewis explains it simply: “Earn under £18,570 annually from a mix of income and savings, and you could maximise your tax-free benefit.” For those just scraping the £12,570 mark or slightly above, your starting rate for savings might be trimmed down. But there’s still room for manoeuvre!
Let’s look at an example: Cheryl has no income from work but receives £20,000 from savings. Thanks to allowances, she ends up paying only £286 in tax. Basically, if you’ve previously paid too much tax on savings, you might be eligible for a refund via Self Assessment. But hurry, the deadline to sort it all out is coming up fast on 31st January. Tick-tock!
So why not make January a bit more exciting and see if you can boost your tax-free income? Share this juicy tip with anyone who might find it useful and save money together! 🕵️♀️💡 #TaxTips #HMRC #SavingsHack #MoneyMatters