To ask for ideas on how to pay less tax

[FleetwoodMacNCheese]

I earn £55k. Don't live in London. My take home is less than £40k per annum.

I've got a huge mortgage, long drive to work therefore spend a fortune on fuel. Is there a legal way I can reduce my tax as I really need to start saving for retirement. Could I ask for part of my salary to be paid in dividends as I've heard less tax is/NIC are paid on these?

Any ideas much appreciated.

DeepfriedPizza That really made me laugh.

• daft

How about be thankful you're earning more than most people in this country and quit whining?

Sell your house or offset savings

Great idea. DD, DP and I can just live in the car!

I'm not looking to evade tax, just seeing if there are ways to pay less tax - legally!

Very few things you can do. You don't say what your job is or what sector you are in (private/public/small/large etc). If your employer offers a car scheme via salary sacrifice, that could possibly help reduce car costs if you get a fuel efficient car. Most companies do pension contributions under salary sacrifice so check that out too. Larger listed companies generallyhave all employee tax efficient share schemes which you can elect to join. Smaller companies MIGHT offer similar schemes.
Dividends will only apply if you have your own limited company and (v important) are genuinely in business of your own accord. You can't get paid via a limited company and carry on doing the role of an employee any more.

Suggest you speak to Jimmy Carr.....

Your work should have a pension scheme, ask them for their advice or go to a financial adviser.
I think most will allow you to have a named beneficiary if you die before you take your pension.

If you work for an employer (PAYE), there's not much you can do as your income is taxed at source.

Make sure you are claiming (complete a self-assessment if relevant) for any expenses related to your job. You CANNOT include fuel in this, but can include professional memberships, uniform etc. This isn't likely to make much of a difference.

Really it looks like you need to reduce your outgoings (Sky TV package? Cleaner? Downgrade car? Shop at Aldi instead of Waitrose). It might also be worth checking you are on the best mortgage deal.

You can't (legally) easily reduce tax, but you can absolutely reduce your cost of living... or of course, increase your earnings. Good luck.

Pay into a pension as advised above. If you earn that amount I can't imagine why you don't have a pension already.

would I have to invest money into the company or could the directors give me some shares?

You think the existing shareholders are going to donate part of the company to you for free?!

Does anyone else work for the company or are you the only employee?

I'm afraid the real answer is either - downsize and sort out your large mortgage or suck it up and get on with things.

I'm hoping your job is not in any way related to finance!

Paying more into a pension is the only real way to reduce your tax bill if you're on PAYE.

I'd give it 0/10. C'mon people!

How can one person both be clever enough to earn £55k, yet so stupid as to write an opening post like this one?

You can reduce your tax burden by paying into a pension as you get 20% tax relief on pension payments.

I've got this great way to avoid paying less tax. I'm writing this musical, you see, and I need investors - you could be a director of the theatre company.

It's going to be great, we've got lots of big names signed up - the plot is set in Germany, it's really charming, I'm going to call it "Springtime!".

Please PM me your cheque.

and don't cancel it

TheNaze UK taxes are lower than many comparable countries.

Fleetwood unless you don't use any services funded by tax ever, and can swear you never will you are obviously being far beyond unreasonable to think you're too special to have to pay tax.

Obviously you should set up a pension though asap.

Assuming this is genuine, why would you ask a bunch of internet strangers rather than go to an IFA?

It is incredibly stuuuuuuuuuuuuupid for someone earning that amount not to have a pension.

On a more sensible note: you're asking how to reduce tax but you don't have a pension????!!

Um. Get a pension and pay a lot of money into it. Your work one is probably going to be the best you can get but speak to an IFA about it. And yes your work one will probably pay out to your husband but make sure you've got your paperwork in place properly, someone at the providor will be able to advise.

Their ain't Any OP

You earn a decent salary my dear

Lean in and get paid more ?

would I have to invest money into the company or could the directors give me some shares?

Are you for real? I suggest you educate yourself if you don't even understand how shares work, before trying to play the system.

There's no way to reduce income tax if you're employed and paid through PAYE. There are lots of ways to reduce your expenses though.

I'd consult an accountant, but I don't think there are many options if you are PAYE.

You could always do your shopping on Amazon as far as possible. They supposedly pay very little tax, and pass some of that saving onto customers in the form of lower prices, so I guess that's a form of paying less tax.

Thanks for replies with practical advice.

Smallish very profitable private company hoping to double in size. Thought they could give me some shares to show the love 😀

we live frugally and the huge mortgage isn't because I have a big house in a posh area. Property just happens to be expensive!

You are joking right?

Because everyone loves paying tax and you're more special than the rest of us?
You're the only person who commutes to work?

All employers must now offer a work based pension (salary sacrifice so paid in pre tax)

If you're worried about higher rate tax thresholds/child benefit thresholds then childcare vouchers and charitable gift aid are also salary sacrifice schemes whigh mean you pay less tax to the treasury.... but it doesn't mean you can keep it!!

All about priorities and cutting your cloth I'm afraid

OP, these are all questions better directed to an IFA and/or a tax accountant.

What I will say though is that your employer is by law required to offer you a workplace pension and you are likely already to have been automatically enrolled in one. Might be worth checking that first.