Seven tax benefits to save a thousand euros before April, but millions are missing out
LOW earners will pay hundreds in extra taxes as a result of a stealth attack on workers.
Income tax thresholds have been frozen since 2021, pushing more people into higher tax brackets as wages rise.
Households will now have to pay a record amount this year, despite the recent cut in national insurance rates.
For someone earning £23,000, that means an extra £401 a year goes to HMRC, analysis by estate agent Interactive Investor found.
So it's more important than ever to take advantage of the benefits before the tax year ends in April.
Here, Laura Purkess outlines all the tax benefits on offer and how you can claim them.
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Marriage allowance
LOW-EARNING couples who tie the knot can save £252 a year with the marriage benefit.
This allows one partner to share ten percent of their tax-free personal allowance of £12,570 with the other to reduce their tax bill if they have any left over.
Two million couples miss out on this. You can claim this on the government website.
Claims can be made backdated for up to four years, saving a total of £1,260.
Tax-free childcare
CHILD CARE costs a fortune, but you can claim up to £2,000 annually for each child under 11.
This is in addition to the 30 hours of free childcare, if you qualify for both.
The grant is split into payments of £500 every quarter and you can claim double that if you have a disabled child.
To qualify, both parents must work 16 hours or more per week and earn at least the minimum wage. See gov.uk/tax-free-childcare.
Trading fee
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SAVVY sellers can earn up to £1,000 a year flogging goods or services with the trade fee.
This could save basic rate taxpayers up to £200 a year in tax.
Laura Suter, head of personal finance at investment firm AJ Bell, says: “It's great for people doing some extra work such as babysitting, selling goods, walking dogs or even selling jam at their local market.”
Rent out your home or driveway
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EARN up to €1,000 tax-free from your home, for example by renting out your driveway or renting out your house on Airbnb while you're on holiday.
The grant could save you £200 a year from HMRC. If you're not driving, apps like JustPark allow other commuters to use your parking space while you pocket the money.
Tenants need permission from their landlord to rent out their home during their absence.
Also ask your home insurer about this.
Savings allowance
EARN €12,570 to €17,570? You can receive up to €5,000 in interest on your savings tax-free, saving you €1,000.
It is most likely to apply to OAPs who only receive a state pension but have cash in the bank.
If you earn more, you can still earn £1,000 in interest tax-free, saving a basic rate taxpayer £200.
In a normal year, most people on low incomes wouldn't expect to earn even £1,000 in interest.
Higher savings rates recently led to 5.5 million people crossing the threshold in November last year.
Pension benefit
PENSIONS offer great tax benefits while increasing your retirement savings.
Part of the money you would have paid in taxes to the government goes into your pension pot.
This is because it comes out of your paycheck before it is taxed.
For basic rate taxpayers, you'll get £1 back for every 80p you put into your pension.
You can contribute a maximum of €60,000 per year tax-free to your pension.
'I saved €252 on my tax return'
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DOG walker Zita Wells, 54, heard about the marriage benefit on TV's The Martin Lewis Money Show.
Zita runs the Pet Patrol 365 animal shelter in East Sussex.
Her husband retired as a construction worker three years ago and has a very low income, so Zita can claim ten percent of his personal allowance.
“I saved $252 when I filed my taxes this year,” says Zita.
BANKS ARE BRINGING BACK UP TO £200 TRANSFER BONUSES
SWITCHING bonuses return to lure new customers after previous deals dried up in January.
Banks and building societies regularly make temporary offers to attract new customers.
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The offers usually require you to switch your current account, which you can do through the Current Account Switching Service (CASS).
NatWest has this week relaunched its £200 incentive for new customers, after introducing it in September.
To receive the money, you must deposit €1,250 into the checking account and log into the mobile app within 60 days of switching.
The bank won a record number of new customers last year with the offer.
Between July and September it registered almost 100,000 switches via the CASS.
Meanwhile, Lloyds Bank is offering customers £175 to switch to a Club Lloyds account.
The offer is open to new and existing customers between now and March 28.
The account charges a monthly fee of £3 if you pay less than £2,000 per month.
But it comes with extra benefits like a free Disney+ subscription and movie tickets.
Co-op Bank, TSB and First Direct withdrew their switching offers last month.
Meanwhile, HSBC and Nationwide's offers expired last year.
CITY watchdog the Financial Conduct Authority is cracking down on buy now pay later providers.
It has forced six companies to change the terms of their customer contracts after finding them to be “potentially unfair or unclear”.
The latest figure was announced during a debate in the House of Lords.
Sun Money revealed in January that the government has further delayed plans to regulate the BNPL sector.
The products allow people to defer or spread the costs of purchases over a certain period of time without interest.
Because the products are currently unregulated, users are not subject to the same protections as other credit agreements and businesses do not have to follow the same rules.
Research by the FCA has shown that BNPL products are associated with higher use of other credit and signs of financial distress.
Plans were first announced to regulate it in 2021.
Chancellor Jeremy Hunt said last month it was “taking longer than expected” and could not confirm whether regulations would be introduced at the next election.
An FCA spokesperson said: “We are ready to regulate the BNPL sector once a final decision has been made.”