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For example; If you use your own car for business and get paid a mileage rate by your employer it is likely that this is below that allowed by HMRC. You are entitled to claim tax relief on any difference between the two rates.
This additional relief should be included in the calculations for your tax code but is often overlooked. Only business mileage is eligible of course so you’re normal home to work journeys do not count.
There are many other examples of where additional claims for expenses may be valid; such as if you are required to work from home or if you belong to a professional body relevant to your job. All such things could alter your tax code reducing the amount of tax you pay.
As an employee your employer will deduct the tax related to your salary or wages but it is your responsibility to declare all other taxable income; such as income from property, savings and investments, self-employment or foreign income.
If you are a higher rate taxpayer it is important to remember that whilst income from many savings and investment accounts is taxed at source, this is only at lower rates and you are responsible for ensuring that the additional tax is paid. Often such employees will be required to complete an annual self-assessment tax return. It is useful to know that all UK banks and building societies must supply HM Revenue and Customs with details of all interest paid to their account holders.
In addition to declaring all sources of income it is in your interest to claim all available allowances and deductions such as contributions to pension scheme, Gift Aid payments and other allowable expenses. This will reduce the amount of tax you pay.
At TaxClever we can check your tax code and help you ensure you have claim all your allowances. Should you need to complete a tax return we can assist or if you prefer take your records and complete/submit it for you.
Most employees believe that because they come under PAYE (Pay As You Earn) and their tax is calculated and deducted by their employer they don’t have to worry about tax. In many cases this is true but for a surprising number the Tax codes used do not reflect the individual circumstances of the employee. This is usually because HMRC have not been notified of changes; so if you don’t have the correct tax code you could be paying too much tax.