With everyone feeling the pinch from higher petrol prices and increased interest rates, now is not the best time for the UK government to increase the basic rate of tax. Since April the basic rate of tax has doubled to 20 pence in the pound. There are however a few ways in which you can reduce your tax bill which most people do not take full advantage of:

Income Tax Allowances

Every citizen in the UK is given a tax free exemption, which this year amounts to 5435 pounds.  This is the total of all income that you can earn before any tax is due. Many married couples do not know about a simple technique that could save them hundreds of pounds in tax a year. Take the following example: Jack and Jill are married. Jack is a doctor and earns 75,000 pounds a year.  Jack and Jill have a savings account in both their names which receives 2000 pounds of interest each year. Because the account is in both their names, tax is owed to the Inland Revenue on jack’s 1000 pound share. If Jill had opened the account in her name, all the interest that was received would have been tax free as Jill does not work, saving over 400 pounds in tax.

Capital Gains Tax Allowances

Similar to Income tax, everyone in the UK has a capital gains tax allowance which for this year is  9,600 pounds. Shares or property that have gone up in value and have been sold at a gain can be transferred between partners, allowing both allowances to be used to total 19200 pounds. Doing this maximizes allowances between married couples. Another factor that could potentially save you money is the government rule allowing  capital losses to be carried forward to future years.

Home Businesses Expenses

If you have a home business you may be missing out on a number of valuable tax savings. Having a home business allows you to reclaim a share of the cost of expenses for the home such as electricity and telephone bills. The easiest and quickest way to claim back any of the expenses that you might be due would be through your Self Assessment Tax claim. More information about this can be obtained from the Inland Revenue website.

Please note that all the information above and contained on this site is for general reading purposes and should not be regarded as tax advice or help. You should not rely on the above data or information to make (or not make) any personal financial decisions. Always remember to get professional advice for your own particular situation.

Things have been hectic and busy here at the Tax Rebate Blog this month, which has not given us as much time as we would have liked to update the blog.

There have been a number of interesting posts in the tax world recently. With the up and coming American election I thought it might be interesting to focus on the best of these:

TaxGirl - Writes about which of the presidential candidates has the best plan for “middle class” America and how depending on where you live in America, middle class can be very different. An excellent post, be sure to give it a 5 minutes read when you get a chance.

The Wandering Tax Pro - Writes about the tax returns of the presidential candidates, Barack Obama and John McCain, providing links on the location for their tax returns for 2006 and 2007. A similar system for the UK would make our Members of Parliament much more accountable after the current expenses debacle.

Every few days we make a random check of our Spam Email to make sure nothing has inadvertently been sucked in. Today something caught our eye which we thought we should warn people about.

The Email that caught out eye was from HM Revenue and Customs and it pretended to be a notification of a tax refund Needless to say that we were quite intrigued! The Email goes on to say that we are due a tax refund of 188.50 and requests that we press, on what appears to be an official HM Revenue link to claim back these over paid taxes.

Needless to say this is a scam, an attempt by some opportunistic identity thief trying to get as much information as they can from you. If you put your mouse over the link, you will see in fact that the link redirect to you to a different site.

Our advice, if you see an Email like this, ignore it or delete it straight away, do not be tempted by the lure of free money and remember ‘if it seems too good to be true….it probably is!’

If you think that you might be due a tax refund, Tax Fix offers a ‘No Rebate, No Fee’ service. We also have a free uk tax rebate calculator so you can check to how to get a tax rebate.

Chevron should have come to TaxFix for their tax refund as a federal court disallowed a tax refund request for $101million on Wednesday 18th June. In previous procedings U.S. District Judge Saundra Armstrong of Oakland had allowed the tax refund to much relief of the oil company, however on appeal this was overturned.

The case dates back to 2001 when Texaco (which was bought out by Chevron) overpaid taxes for the years 1988 and 1990 because a tax deduction was not claimed relating to a $1.25 billion settlement it reached with the U.S. Energy Department in 1988.

With governments spending many billions, and creating historically high deficits. It is no wonder that they are coming down hard on companies who they see as an easy short term target. Similar Tax Rebates problems are occurring in the European union. The result could be that firms move their headquarters to move favorable locations.
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As students have enough to worry about, we are making a regular series of blog posts to help with common student tax issues.

 Student Tax Advice: Buying a House

The biggest expenses (After alcohol!!) when a child leaves their parents house at the tender age of 18 to goto university is the cost of accommodation, which often amounts to thousands of pounds.  With houses prices recently taking a large decline,  coupled with increased costs of tuition, is resulting in many parents buying a property for their child.

No Student Tax Exemption

If a parent buys the house for their child, a number of possible tax implications arise. If the child rents out any spare rooms to friends or other students, they could unwittingly be earning income which they are being taxed on. Often estate agents deduct rent at source when they are managing a property. As students tend to have no other sources of income a tax refund could be due.

Tax Rebate Calculator

One way to check to see if you are due a tax refund is to go to your local tax office to calculate the refund due. This can be a time consuming process. Another option would be to input any rental income received into a tax rebate calculator  and to see the results.

Students are becoming increasingly forced into debt, student tax is a burden that should not have to be faced.

While searching the blogosphere we found an interesting website about personal finance . The article outlines seven basic tips which should help anyone in these economic turbulent times.

If you have any interesting articles that you would like to share with our readers, just drop us an Email and we more then likely review it.

Following the ongoing debate over non-doms and CGT, the government has been told that it potentially faces a mass exodus of businesses moving to lower tax regimes. Unhappy firms have been waiting eagerly to move, last month Shire announced a move to Ireland, benefiting from the countries corporation tax which is only 12.5% compared to the UK’s 28%! Other companies that have decided to move or are considering include: United Business, advertising giant WPP, fund group Aberdeen Asset Management and Brit Insurance, with the latter saying the reason being was high corporation tax and the Treasury’s recent proposals for taking foreign profits.

Do you think increasing tax acts as an incentive to leave a country, or do you think people and businesses are too reluctant to move? A number of economists actually believe that reducing the tax rate will increase tax revenue. What are your thoughts?

What with the tax year ending/starting, I thought I would share some links from a few personal finance blogs from around the Internet, enjoy!

• The Simple Dollar lists six things he thinks after filing his taxes.

• Blueprint for Financial Prosperity lists 50 fun facts about taxes.

• Boston Gal’s Open Wallet has some tax saving offers for us all.

The four biggest tax havens in the world are on course to clash with the European Union. The EU’s 27 strong high command of finance and economics minsters are meeting in Brussels to formulate a plan to safe guard billions of Euros which are diverted to Switzerland, Monaco, Lichtenstein and Andora.

Many people, including ourselves are quite skeptical of the outcome of this new push. It appears that the European Union is in need of more finances and is using these countries as scape goats to get some easy money.

It has recently been reported that HMRC has paid an informer to provide bank details of UK nationals accounts in Lichtenstein. Is this the thin end of the wedge, and more to the point will this evidence hold up in court?

Do you think the EU is correct to clamp down on these tax havens?

John chow writes an excellent post on his blog about the advantages of being able to use his blog’s income to deduct expenses such as his love for fine dining.

Here is an extract from the post:

“Because the blog is treated like a business, you can deduct from the blog income many business related expenses that are required to run the blog. Stuff like web hosting, design work, programming, cost of domain renewal are all deductible. There are many other deductions one can take to bring his income down. There are no set rules. The tax man’s only rule is the expense must be reasonable and used for the purpose of getting business.

The keyword here is reasonable. It’s an undefined term. What maybe reasonable to me maybe completely unreasonable to Uncle Sam. My rule when dealing with deductions is to claim everything because the worst thing that can happen is the deduction is disallowed. If they disallow it, then fine. However, if they accept it, then I’ve saved yourself some money. Here are some of the more creative deductions one can use when trying to reduce blog income taxes.”

John goes on to say that it is possible to coincide vacations with trade fairs and shows to get a break that is deductible from your income tax. One of the great things about owning your own businesses, is the tax benefits and flexibility you get.