Martin Fagan reveals where investors should go to get tax advice online.
The news, when it came a few months ago, wasn’t unexpected but it was still something of a shock: as a nation, we pay out more in benefits than we raise in income tax. According to the think tank Policy Exchange, in 2009/10 the Treasury is expecting to take in £140.5 billion in gross income tax receipts while social security benefits are projected to be £164.7 billion.
So if you want to keep more of your money, the best way to do so is through tax planning, and the easiest way to accomplish it is online. If you have a question about tax – be it income tax, road tax, council tax, capital gains tax (CGT), stamp duty or inheritance tax (IHT) – and access to the internet, the chances are you’ll find an answer somewhere.
Complex coding
With a government looking to increase income tax to meet its benefits bill, planning to give the government less of your earnings in the first place is a good place to start. If you’re on PAYE then you’re at the mercy of the payroll department of the company you work for and the government, and the only thing you can juggle in your favour is your tax code.
According to recent research undertaken on behalf of the Chartered Institute Of Taxation (CIOT), 47 per cent of UK taxpayers polled said they never checked to see if their PAYE code is correct. Forty-two per cent said they found it ‘very’ or ‘fairly’ difficult to understand whether they are paying the right amount of tax. Worryingly, a National Audit Office report from December 2006 indicated that HM Revenue & Customs (HMRC) estimated that UK taxpayers might have overpaid around £500 million via PAYE. So don’t assume the tax code HMRC has given you is the correct one.
A solid, all-purpose website is www.digita.com/taxcentral . Digita is a supplier of practice software to the accountancy profession, so it uses its website as a shop window to market its products. However, it has a lot of free stuff that is very useful, not least its tax calculators, such as its payslip checker, tax code checker, rebate estimator and student loan calculator, as well as calculators for pension tax relief, annuities, IHT and even company car benefit, to see how much having a company car will affect your salary. If you’re looking for a one-stop shop for online tax guidance, this site is hard to beat.
A bit of DIY
If you’re self-employed and need to fill out a self-assessment form, this can be a daunting prospect, especially if you receive income from investments and/or pensions and are still employed in some capacity. Alas, there’s also a dearth of free information about filling one out (most websites are touting for the chance to sell you accounting services or a book).
The best free site is SmallBusiness.co.uk , a portal for smaller companies. This gives you access to a number of guides such as tips on how to fill out the form and things you can claim as expenses against income. And if you run your...
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