How to Save on Taxes?

Essential Techniques to Save On Taxes

Learn about paying taxes, including checking your tax code, making the most of your tax-free allowance, and dozens of other ways to reduce your tax bill.

In This Article

• Deduct Your Investment Tax Bill
• Save on Property Income Tax
• Tax Savings for Older People
• Charity Tax Savings

Deduct Your Investment Tax Bill

1. Invest with an Enterprise Investment Scheme

To encourage investment in start-up businesses, the government offers additional tax exemptions on certain investments.

If you buy shares in a qualifying company, usually through hedge funding investment sites like CrowdCube or Cedars, you will be able to deduct 30% from your income tax bill for the year. The amount you can spend in any given year is 1 million - potentially up to 300 300,000 in income tax savings.

You can find more information on equity crowdfunding in our guide.

Our guide to equity crowdfunding

2. Make the Most of Venture Capital Trust

Similarly, Venture Capital Trusts (VCTs) also offers a 30% tax deduction, but only on investments of up to 200 200,000. VCTs are a special type of investment trust, meaning that investments are managed by the fund manager rather than by oneself.

To be eligible for relief, you’ll need to buy shares at launch, and hold them for at least five years.

3. Buy Shares Through Your Company

If your employer offers the right to purchase shares at preferential rates through free shares or a government-approved scheme, such as a share incentive plan, company share option plan, or enterprise management initiative scheme, the share price is exempt from income tax. And national insurance

However, it is not completely tax-free. Eventually, you will probably need to pay capital gains tax when you sell your shares.