Latest news with #tax
The Sun
3 hours ago
- Business
- The 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 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. .
Yahoo
4 hours ago
- Business
- Yahoo
Canada retaliates against U.S. steel imports after Trump terminates trade talks
President Donald Trump said Friday that he had terminated trade discussions with Canada, citing an incoming Canadian tax on tech companies including those based in the U.S. In a post on Truth Social, Trump referred to Canada as "a very difficult country to trade with" and said that its levy on tech firms — the first payment for which is due Monday — "is a direct and blatant attack on our Country." "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," he said. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period." Last week Canada's finance minister said that he would not delay implementation of the digital services tax — which applies to any tech company making more than $15 million from Canadian internet users — even as U.S. trade talks continue. A lobbying group for some tech giants said the tax, which is retroactive to 2022, would cost U.S. companies as much as $3 billion. Those payments are due beginning June 30. The office of Canadian Prime Minister Mark Carney didn't immediately respond to a request for comment. But late Friday, Canada retaliated against the U.S. by imposing a quota on some steel imports and a 50% surcharge for imports that exceed the quota. Canada's finance minister said the government was acting to protect its industry from "unjust U.S. tariffs." Canada's government said it "remains prepared to take additional steps as needed." Trump's post cuts short what had been a relatively calm period of trade-related announcements — a stretch that had helped markets recover to the all-time highs seen in February. Shortly after Trump's post went live, the S&P 500 and Nasdaq indexes briefly turned negative but rallied later in the afternoon to close at all-time highs. Friday had begun with encouraging comments from Treasury Secretary Scott Bessent, who indicated the president was open to moving the previously announced deadline for trade deals from July 9 to Labor Day — and that country-by-country duties themselves were negotiable. A few hours later, Trump said that initial July 9 deadline was not set in stone, saying the U.S. could either extend or shorten it. Canada is the second-largest U.S. trading partner. Currently, the U.S. has a tariff rate of 25% applied to Canadian imports that don't comply with the U.S.-Mexico-Canada Agreement, the trade deal Trump inked during his first term before he upended it with a flurry of tariff announcements in his second. The 25% tariff on non-compliant Canadian goods excludes energy products, which are subject to a 10% rate. Canada is also heavily impacted by Trump's 50% tax on steel and aluminum imports — the country is the largest foreign supplier of those materials to the U.S. And it has also been impacted by the 25% duties Trump has imposed on foreign-made vehicles and auto parts. This article was originally published on
Daily Mail
13 hours ago
- Business
- Daily Mail
Critics warn Sir Keir's screeching welfare U-turn will now result in a 'two-tier' benefits system and a £3billion tax bombshell to pay for it
Sir Keir Starmer 's benefits climbdown will create a 'two-tier' benefits system with families facing a £3billion tax bombshell to pay for it, critics warned last night. And that will be on top of the £1.25billion bill caused by the Prime Minister's screeching U-turn over winter fuel payments for pensioners. Experts warned the £4.25billion black hole in the public finances caused by the backsliding will probably force Chancellor Rachel Reeves to plug it with more tax rises in her autumn Budget. The Prime Minister was humiliatingly forced to hand Labour 's welfare rebels the concessions in a bid to avoid defeat in a crunch vote on benefits cuts on Tuesday. The compromise deal last night looked like it had peeled off enough of the 126 rebels to pass the vote. However, as many as 50 were still threatening to rebel unless the vote was pulled. The reforms had originally been forecast to save the Government £5billion a year by the end of the Parliament. Charity bosses and Labour MPs still planning to rebel also warned the new proposals would create a 'two-tier' benefits system because existing Personal Independence Payment (PIP) claimants will keep their current level of disability payments. But new claimants after November 2026, when the changes are scheduled to kick in, would be entitled to as much as £4,000 a year less on average, even if they suffered from the same condition which meant they couldn't work. Before the U-turn, both existing and future claimants were facing stricter eligibility conditions for the daily living component of PIP, a working-age benefit for those whose health condition increases their living costs. The concessions on PIP alone protect some 370,000 people currently receiving the allowance who were set to lose out following reassessment. Meanwhile, existing claimants of the universal credit (UC) health element, paid to those with a condition which stops them working, will have their payments protected in real terms. However, new claimants will see it halved and frozen. According to calculations by the Resolution Foundation think tank, the PIP and UC reforms will cost £1.5billion each. Sir Keir yesterday branded his own climbdown 'common sense' and refused to rule out tax increases to pay for it in an interview. During a visit to RAF Valley in Wales, he said how the Government intended to pay for it would be revealed in the autumn Budget, adding: 'The changes still mean we can deliver the reforms that we need and that's very important because the system needs to be a system that is fit for the future. 'All colleagues are signed up to that, but having listened, we've made the adjustments. The funding will be set out in the Budget in the usual way.' Yesterday's climbdown is hugely embarrassing for Sir Keir as it highlights the scale to which he failed to read his MPs' mood over the proposed cuts, with rebels having spoken out for months. Care minister Stephen Kinnock dismissed criticism that the Government was in chaos and that Sir Keir was not 'competent', insisting that the process had been 'positive and constructive' and that the PM was someone who 'gets stuck into fixing problems'. Care minister Stephen Kinnock (pictured) dismissed criticism that the Government was in chaos and that Sir Keir was not 'competent', insisting that the process had been 'positive and constructive' and that the PM was someone who 'gets stuck into fixing problems' But Kemi Badenoch said the debacle left benefits claimants facing 'the worst of all worlds'. Speaking to reporters on a visit to North West Essex, the Tory leader said: 'I think we're seeing a government that is floundering, a government that is no longer in control despite having a huge majority. I don't see how they're going to be able to deliver any of the things they promised if they can't do something as basic as reducing an increase in spending. 'It's a real shame because what they're doing now with this U-turn is creating a two-tier system... this is the worst of all worlds.' Arch rebel Nadia Whittome, the Labour MP for Nottingham East, said: 'These revised proposals are nowhere near good enough, and frankly, are just not well thought through. It would create a two-tier system in both PIP and the Universal Credit health element based on when somebody became disabled.' Sir Mel Stride, the Shadow Chancellor, said: 'Labour promised not to raise taxes on working people, and their Jobs Tax has led to rising unemployment and growth being halved. Now the Government has been unable to rule out that taxes will go up this autumn in order to pay for Keir Starmer's latest U-turns.'
Yahoo
13 hours ago
- Business
- Yahoo
Trump says he's terminating trade talks with Canada over tax on technology firms
WASHINGTON (AP) — President Donald Trump said he's immediately suspending trade talks with Canada over its plans to continue with its tax on technology firms, which he called 'a direct and blatant attack on our country.' Trump, in a post on his social media network on Friday, said that Canada had just informed the U.S. that it was sticking to its plan to impose the tax set to take effect Monday. 'Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,' Trump said in his post. Canada's digital services tax requires Canadian and foreign businesses that engage with online users in Canada. The digital services tax will hit companies like Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2 billion US bill due at the end of the month. Canada and the U.S. have been discussing easing a series of steep tariffs Trump imposed on goods from America's neighbor. The Republican president earlier told reporters that the U.S. was soon preparing to send letters to different countries, informing them of the new tariff rate his administration would impose on them. Trump admin appeals federal judge's decision rejecting ban of foreign Harvard students 2028 Dem frontrunner beating Kamala Harris has 0% Black support, poll finds Chicopee's next budget is 6% hike from this year. Here's where spending has increased Mass. lawmakers get a deal; gun for first on-time (ish) state budget in years 'You have been the worst': Secretary Hegseth blasts former Fox colleague Read the original article on MassLive.
RNZ News
14 hours ago
- Business
- RNZ News
Trump ends trade talks with Canada over tax on US tech firms
By Beiyi Seow , AFP US President Donald Trump meets with Canadian Prime Minister Mark Carney in the Oval Office of the White House in Washington, DC, on 6 May 2025. Photo: AFP / Mandel Ngan President Donald Trump is calling off trade negotiations with Canada in retaliation for taxes impacting US tech firms, adding that Ottawa will learn of their new tariff rate within a week. Trump was referring to Canada's digital services tax, which was enacted last year and forecast to bring in C$5.9 billion (NZ$7.1 billion) over five years. While the measure is not new, US service providers will be "on the hook for a multi-billion dollar payment in Canada" come 30 June, noted the Computer & Communications Industry Association recently. The three percent tax applies to large or multinational companies such as Alphabet, Amazon, and Meta that provide digital services to Canadians, and Washington has previously requested dispute settlement talks over the matter. "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said in a post on his Truth Social platform. He called the country "very difficult" to trade with. Canada may have been spared some of Trump's most sweeping duties, such as a 10 percent levy on nearly all US trading partners, but it faces a separate tariff regime. Trump has also imposed steep levies on imports of steel, aluminum, and autos. Last week, Canadian Prime Minister Mark Carney said Ottawa will adjust its 25 percent counter tariffs on US steel and aluminum - in response to a doubling of US levies on the metals to 50 percent - if a bilateral trade deal was not reached in 30 days. "We will continue to conduct these complex negotiations in the best interest of Canadians," Carney said, adding that he had not spoken to Trump following the US president's announcement. Trump's latest salvo targeting Canada came shortly after Washington and Beijing confirmed finalising a framework to move forward on trade. Beijing said Washington would lift "restrictive measures" while China would "review and approve" items under export controls. A priority for Washington in talks with Beijing had been ensuring the supply of the rare earths essential for products including electric vehicles, hard drives, and national defence equipment. China, which dominates global production of the elements, began requiring export licenses in early April, a move widely viewed as a response to Trump's blistering tariffs. The two sides agreed after talks in Geneva in May to temporarily lower steep tit-for-tat duties on each other's products. China also committed to easing some non-tariff countermeasures but US officials later accused Beijing of violating the pact and slow-walking export license approvals for rare earths. They eventually agreed on a framework to move forward with their Geneva consensus following talks in London this month. A White House official told AFP on Thursday that the Trump administration and China had "agreed to an additional understanding for a framework to implement the Geneva agreement." This clarification came after the US president told an event that Washington had inked a deal relating to trade with China, without providing details. Under the deal, China "will review and approve applications for the export control items that meet the requirements in accordance with the law," China's commerce ministry said. "The US side will correspondingly cancel a series of restrictive measures against China," it added. Dozens of economies, although not China, face a 9 July deadline for steeper duties to kick in - rising from a current 10 percent. It remains to be seen if other countries facing the higher US tariffs will successfully reach agreements to avoid them before the deadline. US Treasury Secretary Scott Bessent said that Washington could wrap up its agenda for trade deals by September, indicating more agreements could be concluded although talks were likely to extend past July. Speaking to Fox Business, Bessent reiterated there are 18 key partners Washington is focused on pacts with. "If we can ink 10 or 12 of the important 18, there are another important 20 relationships, then I think we could have trade wrapped up by Labor Day," Bessent said, referring to the US holiday on 1 September. The White House suggested the July deadline could be extended, or Trump could pick a tariff rate for countries if there was no agreement. Wall Street's major indexes, which bounced early Friday (local time) on hopes for deals, lost some ground after Trump called off Canada talks. - AFP
