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Scottish Sun
16 hours ago
- Business
- Scottish Sun
How to legally pay less tax on your income as millions hit with stealth taxes
MILLIONS of workers will be hit with higher tax bills in the coming years as frozen thresholds will force them to hand over more of their earnings to the taxman. Around 4.1million extra workers will be dragged into higher tax bands by 2027-28, according to the most recent figures from the Office for Budget Responsibility. 1 Millions of people will be dragged into paying more tax in the coming years Credit: Getty Income tax thresholds are frozen until April 2028, which means that more people could find themselves pushed into higher tax bands through a concept called fiscal drag. The higher rate tax band is frozen at £50,270, which means any earnings over this amount are taxed at 40%. Meanwhile, the additional tax band is currently fixed at £125,140, beyond which any earnings are taxed at 45%. But there are things you can do to prevent a surprise tax bill from landing on your doorstep. Here we explain how you can reduce your tax bill and avoid the tax trap. Apply for tax relief One way to reduce your tax bill is to claim tax relief. You can claim the relief on your job expenses, which means you will take home more of your income and pay less tax. To be eligible you must use your own money for things that you need to buy for your job and you only use for work. You can claim for items including working from home, uniforms, work clothes, tools, vehicles you use for work, travel and overnight costs. You cannot claim tax relief if your employer gives you all the money back or alternative equipment. You will get the relief based on what you have spent and the rate at which you pay tax. For example, if you claim £60 of tax relief and usually pay tax at 20% then you will get £12 back. The exact amount you could get depends on what you are claiming for. For more information and to make a claim visit How do I check my tax code? YOU can check your tax code on your personal tax account online, on any payslips or on the HMRC app. To log in, visit If you have one, you can also check it on a "Tax Code Notice" letter from HMRC. Bear in mind that you might need your Government Gateway ID and password to hand to log in. But if you don't have this you can use your National Insurance number or postcode and two of the following: A valid UK passport A UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) A payslip from the last three months or a P60 from your employer for the last tax year Details of a tax credit claim if you have made one Details from a self assessment tax return (in the last two years) if you made one Information held on your credit record if you have one (such as loans, credit cards or mortgages) Claim marriage allowance If you are married or in a civil partnership then you may also be able to reduce your tax bill by claiming Marriage Allowance. Every worker has something called a Personal Allowance. This is the amount of money you can earn every financial year before you start to pay Income Tax. For the current tax year the Personal Allowance is £12,570. If you earn less than this then you usually do not have to pay Income Tax. Marriage Allowance is a special tax rule that lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner. It is free to apply for and can reduce your tax bill by up to £252 every tax year. To be eligible you need to be married or in a civil partnership. Your income must be below £12,570 and your partner must pay Income Tax at the basic rate, which usually means their income must be between £12,571 and £50,270. Ian Futcher, financial planner at Quilter, said: 'Many eligible couples haven't claimed this, often because they simply don't realise it exists. 'It can be backdated for up to four years if you're eligible.' The fastest way to apply for the allowance is online and you should get an email confirming your application within 24 hours. You can also claim Marriage Allowance by post using the MATCF form. For more information visit Make use of salary sacrifice Salary sacrifice is a great way to top up your income without paying any tax. It lets you exchange some of your wages for a different benefit from your employer, such as a company car, childcare vouchers or pension contributions. Your salary is then reduced by the cost of any benefits you choose. As your salary is lower, you will pay less tax and National Insurance. For example, someone who earns the UK average salary of £37,430 could decide to sacrifice £200 a month into their pension. Over the course of a year they would pay £2,400 into their pension. By using salary sacrifice their wage would fall to £35,030 a year, which would save them around £480 a year in Income Tax. They would also save nearly £200 in National Insurance, which means their total saving would be £672. Salary sacrifice also saves your employer money on National Insurance. Many employers will pass this saving on to you by paying more money into your pension. As a result, your total pension contribution could be more than £2,700. Sarah Coles, head of personal finance at Hargreaves Lansdown, said it is worth checking if your employer offers salary sacrifice. She said: 'It will not boost your take-home pay, but it will cut your tax bill and make your money go further.' Pay into pension If you are lucky enough to earn more than £60,000 a year then you may be able to get more Child Benefit with an under-used trick. Child Benefit is paid by the government to parents or other people who are responsible for bringing up a child. It is currently worth £26.05 for the eldest or only child and £17.25 for every additional child you have. You get this full payment if you earn less than £60,000 a year. But beyond this point you need to start paying the benefit back at a rate of 1% for every extra £200 you earn. The payment disappears entirely once you earn more than £80,000 a year. But you may be able to hang on to more of your Child Benefit with a simple trick, Ian Futcher explains. He said: 'If your earnings are close to the threshold, using pension contributions or salary sacrifice to reduce your taxable income could allow you to keep more of your Child Benefit.' For example, if you earned £61,000 a year then paying £1,000 into your pension would allow you to keep all of your Child Benefit. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Daily Mirror
19-06-2025
- Business
- Daily Mirror
Young workers urged to download HMRC app
The HMRC app gives instant access to crucial information such as National Insurance numbers, tax codes and previous employer details - all essential when applying for seasonal work Young people have been urged to download a free app from HM Revenue and Customs to avoid a summer job meltdown. More than 1.2 million under-25s have already downloaded the HMRC app, which gives instant access to crucial information such as National Insurance numbers, tax codes and previous employer details — all essential when applying for seasonal work. The call comes as thousands of school leavers, college students and university graduates look to earn extra cash after finishing their exams. Between May and August last year, an average of 40,000 additional young people entered employment each month compared to the rest of the year. With work in hospitality, retail, leisure and even fruit picking expected to spike again this summer, officials say the app helps young jobseekers get ahead of the pack. Myrtle Lloyd, HMRC's Chief Customer Officer, said: 'Earning extra cash is important when young people have down time from studying. Downloading the HMRC app is a simple way to ensure they can apply for their job quickly and get on with earning extra cash.' The app provides immediate access to employment history, tax details, and the vital National Insurance number — the most commonly misplaced bit of information by young people starting work. More than 146,000 people contacted the National Insurance helpline in the year to April saying they'd lost or forgotten it. Ms Lloyd said: 'It's quicker and easier for individuals to access their NI number via the HMRC app. They can download it to keep it safely in their phone's digital wallet to use whenever it's needed.' Figures show nearly 90,000 under-25s used the app last year to download their NI number directly. The tax authority is also warning young people to keep their NI number secure and only share it with trusted parties, such as an employer, to reduce the risk of identity fraud. In addition, those starting jobs are being advised to check their payslips regularly to ensure they are being paid in line with National Minimum Wage laws. Anyone who believes they are being short-changed can report concerns to HMRC or the workplace mediator ACAS. The HMRC app has proven popular with young workers, boasting a 4.8-star rating on the Apple App Store and 4.6 on Google Play. Once registered, users can log in securely using facial recognition, a fingerprint, or a six-digit PIN. Those who don't yet have a Government Gateway ID may need to verify their identity using a passport or driving licence. The current National Minimum Wage hourly rates (as of April 1, 2025) are: Age 21 and over (National Living Wage): £12.21 Age 18 to 20: £10.00
Scottish Sun
19-05-2025
- Business
- Scottish Sun
Millions of workers urged to check key code on special payment slips arriving in DAYS – check if you're overpaying
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MILLIONS of workers have been urged to check a key code on a special payment slip revealing if they're overpaying tax. The warning has been issued to employees who should receive their P60s before the end of the month. 1 The wrong tax code on your P60 means you could be overpaying tax to HMRC P60s are issued to workers at the end of every tax year with the final deadline for bosses to send them May 31. They are sent out either electronically or in paper form. However, one key detail on the P60 could tell you you're paying the wrong amount of tax - your "final tax code". If it turns out you are on the wrong code, it means you could be overpaying tax and are owed money from HMRC. Bear in mind though, you may also be underpaying tax and have to pay HMRC any shortfall. Sarah Coles, personal finance expert at Hargreaves Lansdown, said: "It isn't always easy to get to grips with your P60, but the thing to look for is the final tax code. "If it's wrong, you could end up over-paying or under-paying your tax – either of which is a pain in the neck." Your tax code could be wrong for any number of reasons, including if you have multiple jobs and your employer doesn't know your personal allowance has been used up from earnings elsewhere. You may also be on the wrong code if you've changed jobs and your employer hasn't received the right documentation from a previous employer. Or, someone in the HR department might simply have made a clerical error meaning you're on the wrong code. How to challenge your council tax band How to check your tax code A tax code is normally a five-digit mixture of letters and numbers. The most common tax code for the current tax year is 1257L. This tax code is used for most people with one job and no untaxed income, unpaid tax or taxable benefits (like a company car). You can check your tax code on your online personal tax account, via payslips, or on the HMRC app. You can also, if you've received one, check your code on a "Tax Code Notice" letter from HMRC. You'll need your Government Gateway ID and password to log in to your online personal tax account. If you don't have this you can use your National Insurance number or postcode and two of the following: a valid UK passport a UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) a payslip from the last three months or a P60 from your employer for the last tax year details of a tax credit claim if you have made one details from a Self Assessment tax return (in the last two years) if you made one information held on your credit record if you have one (such as loans, credit cards or mortgages) You can also use free tax code calculator which can give you a steer as to whether you're on the right one. How to report a wrong tax code If, after checking, you think you're on the wrong tax code, you can contact HMRC to tell them via phone on 0300 200 3300. This is usually the quickest way to get a response. Or, you can send a letter to the following address: Pay as You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom. If you are on the wrong tax code and have been paying too much, HMRC will change it so you pay the correct amount moving forwards. They should also reimburse any tax you've already overpaid. If you've been underpaying tax, you will usually have to pay the money back over 12 months. But, only if you are earning enough over the personal tax allowance (£12,570) to cover the underpayment and owe less than £3,000. HMRC might get in touch with you to tell you you're owed a tax rebate too - they'll do this via a P800 letter or a simple assessment letter in the post. But again, a P800 might tell you if you've not paid enough tax and have to pay it back. A P800 letter will tell you if you can claim online through the Government's website, in which case you'll need your Government Gateway ID and password. If you claim the money online it will be sent to your bank account within five days. You can also claim your refund through the HMRC app. If your P800 letter states you will be paid your tax rebate via cheque in the post, you should receive it within 14 days of the date on your letter. If you're owed tax from more than one year, you'll get a single cheque for the entire amount. There are time limits in place to reclaim any overpaid tax, which is currently four years from the end of the tax year in which you are trying to claim. So, if you're in any doubt you've overpaid tax, you should contact HMRC as early as possible. What your tax code means Your tax code is a combination of letters and numbers. The number will normally dictate the level of your tax-free allowance. So if your allowance is £11,000 the first four digits of your code will be 1100. The letters have different meanings - here is a guide: L - You're entitled to the standard tax-free personal allowance - You're entitled to the standard tax-free personal allowance M - Marriage Allowance: you've received a transfer of 10 per cent of your partner's personal allowance (£1,260) - Marriage Allowance: you've received a transfer of 10 per cent of your partner's personal allowance (£1,260) N - Marriage Allowance: you've transferred 10 per cent of your personal allowance to your partner - Marriage Allowance: you've transferred 10 per cent of your personal allowance to your partner S - Your income or pension is taxed using the rates in Scotland - Your income or pension is taxed using the rates in Scotland T - Your tax code includes other calculations to work out your personal allowance, for example, it's been reduced because your estimated annual income is more than £100,000 - Your tax code includes other calculations to work out your personal allowance, for example, it's been reduced because your estimated annual income is more than £100,000 0T - Your personal allowance (which is currently £12,570) has been used up, or you've started a new job and your employer doesn't have the details they need to give you a tax code - Your personal allowance (which is currently £12,570) has been used up, or you've started a new job and your employer doesn't have the details they need to give you a tax code BR - All your income from this job or pension is taxed at the basic rate (usually used if you've got more than one job or pension) - All your income from this job or pension is taxed at the basic rate (usually used if you've got more than one job or pension) D0 - All your income from this job or pension is taxed at the higher rate (usually used if you've got more than one job or pension) - All your income from this job or pension is taxed at the higher rate (usually used if you've got more than one job or pension) D1 - All your income from this job or pension is taxed at the additional rate (usually used if you've got more than one job or pension) - All your income from this job or pension is taxed at the additional rate (usually used if you've got more than one job or pension) NT - You're not paying any tax on this income - You're not paying any tax on this income Tax codes starting with K mean you have income that isn't being taxed another way and it's worth more than your tax-free allowance If your tax code begins with 'W1', 'M1' or 'X' you've been placed on an emergency tax code and may need to update your details. If you change jobs, take on an additional role or have another change in circumstances it is also worth checking your details and making sure you are on the correct code. It could be that HMRC has not received information about your change of circumstances and therefore will not update anything. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
Scottish Sun
03-05-2025
- Business
- Scottish Sun
HMRC issues urgent working from home tax warning for thousands of employees
HMRC has issued a new warning to millions of people who work from home that a five minute check could help them avoid a costly repayment bill. Workers should double check they are eligible for tax relief when working from home before they make a claim to avoid being hit with a bill. Advertisement 1 HMRC has issued a warning to thousands of people who work from home Many remote workers can legitimately claim tax relief for essential household costs such as heating and business-related phone calls when working from home. They can either claim on a flat rate of £6 a week or the exact amount of additional expenses they have incurred. But HMRC has said that strict eligibility rules mean individuals are responsible for repaying any money if they incorrectly claim the relief. This is also the case if they use a company that promises to claim the tax relief on their behalf. Advertisement In a fresh alert on social media HMRC warned: 'Don't get caught out by ads promising quick tax refunds for working from home. 'Always check if you are eligible before making a claim. Avoid agent fees by claiming directly with HMRC.' Who can claim tax relief? You may be able to claim tax relief for additional household costs if you have to work from home for all or part of the week. But it is only available in specific circumstances, such as if an employer requires an employee to work remotely, or if there is no office available. Advertisement Choosing to work from home does not qualify you for tax relief. You are also not eligible if your employer has an office but you cannot use it sometimes because it is full. How to challenge your council tax band Meanwhile, if you claim for the exact additional expenses then they must relate directly to work costs, such as business calls or a proportion of your electricity bill. You cannot claim for general household costs such as rent or broadband. Advertisement You can either claim tax relief on £6 a week or the exact amount you have spent. You will get the relief based on the rate at which you pay tax. How do I check my tax code? YOU can check your tax code on your personal tax account online, on any payslips or on the HMRC app. To log in, visit If you have one, you can also check it on a "Tax Code Notice" letter from HMRC. Bear in mind that you might need your Government Gateway ID and password to hand to log in. But if you don't have this you can use your National Insurance number or postcode and two of the following: A valid UK passport A UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) A payslip from the last three months or a P60 from your employer for the last tax year Details of a tax credit claim if you have made one Details from a self assessment tax return (in the last two years) if you made one Information held on your credit record if you have one (such as loans, credit cards or mortgages) For example, if you pay the 20% basic rate of tax and claim relief on £6 a week, you would get £1.20 a week in tax relief. Andy Wood, international tax adviser at Tax Natives, explains: 'The criteria for claiming this relief changed following the COVID-19 pandemic. Advertisement 'Many people who were eligible during the pandemic may no longer qualify today, so it's important not to assume continued entitlement without checking." He adds that even if they use an agent or tax refund company to submit a claim, they are still personally responsible for the information they provide. Andy explains: 'Any overpayments identified by HMRC would need to be repaid by the individual, not the agent.' How can I check if I am eligible and claim? You can check if you are eligible for tax relief online using the tool on the HMRC website. Advertisement You should do this before you submit a claim to avoid any issues. When you claim, you must send in evidence that you have to work from home if you are claiming £6 a week for the 2022/23 tax year. If you are claiming the exact amount you have spent then you will need to send evidence such as a copy of your receipt or bills. If you complete a Self Assessment tax return then you must claim the relief through your tax return instead. Advertisement You can claim tax relief for the current tax year and the previous four if you have not yet done so. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
The Sun
03-05-2025
- Business
- The Sun
HMRC issues urgent working from home tax warning for thousands of employees
HMRC has issued a new warning to millions of people who work from home that a five minute check could help them avoid a costly repayment bill. Workers should double check they are eligible for tax relief when working from home before they make a claim to avoid being hit with a bill. 1 Many remote workers can legitimately claim tax relief for essential household costs such as heating and business-related phone calls when working from home. They can either claim on a flat rate of £6 a week or the exact amount of additional expenses they have incurred. But HMRC has said that strict eligibility rules mean individuals are responsible for repaying any money if they incorrectly claim the relief. This is also the case if they use a company that promises to claim the tax relief on their behalf. In a fresh alert on social media HMRC warned: 'Don't get caught out by ads promising quick tax refunds for working from home. 'Always check if you are eligible before making a claim. Avoid agent fees by claiming directly with HMRC.' Who can claim tax relief? You may be able to claim tax relief for additional household costs if you have to work from home for all or part of the week. But it is only available in specific circumstances, such as if an employer requires an employee to work remotely, or if there is no office available. Choosing to work from home does not qualify you for tax relief. You are also not eligible if your employer has an office but you cannot use it sometimes because it is full. How to challenge your council tax band Meanwhile, if you claim for the exact additional expenses then they must relate directly to work costs, such as business calls or a proportion of your electricity bill. You cannot claim for general household costs such as rent or broadband. You can either claim tax relief on £6 a week or the exact amount you have spent. You will get the relief based on the rate at which you pay tax. How do I check my tax code? YOU can check your tax code on your personal tax account online, on any payslips or on the HMRC app. To log in, visit If you have one, you can also check it on a "Tax Code Notice" letter from HMRC. Bear in mind that you might need your Government Gateway ID and password to hand to log in. But if you don't have this you can use your National Insurance number or postcode and two of the following: A valid UK passport A UK photocard driving licence issued by the DVLA (or DVA in Northern Ireland) A payslip from the last three months or a P60 from your employer for the last tax year Details of a tax credit claim if you have made one Details from a self assessment tax return (in the last two years) if you made one Information held on your credit record if you have one (such as loans, credit cards or mortgages) For example, if you pay the 20% basic rate of tax and claim relief on £6 a week, you would get £1.20 a week in tax relief. Andy Wood, international tax adviser at Tax Natives, explains: 'The criteria for claiming this relief changed following the COVID-19 pandemic. 'Many people who were eligible during the pandemic may no longer qualify today, so it's important not to assume continued entitlement without checking." He adds that even if they use an agent or tax refund company to submit a claim, they are still personally responsible for the information they provide. Andy explains: 'Any overpayments identified by HMRC would need to be repaid by the individual, not the agent.' How can I check if I am eligible and claim? You can check if you are eligible for tax relief online using the tool on the HMRC website. You should do this before you submit a claim to avoid any issues. When you claim, you must send in evidence that you have to work from home if you are claiming £6 a week for the 2022/23 tax year. If you are claiming the exact amount you have spent then you will need to send evidence such as a copy of your receipt or bills. If you complete a Self Assessment tax return then you must claim the relief through your tax return instead. You can claim tax relief for the current tax year and the previous four if you have not yet done so. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@
