A recent survey released recently highlighted that the number of tax payers paying tax at 40% has almost doubled in the last 10 years. The number will increase next year due to this year’s Budget announcement that personal allowances will be frozen and not increased. The personal allowance is currently £4,615 for a single person under the age of 65 and is the amount that can be earned without paying income tax.
With the amount of people paying higher rate tax on the increase, proper financial planning is vital. People need to ensure all of their tax allowances are used to minimise payment of additional tax.
Because married couples are taxed separately, they need to make sure that money is saved and invested between them, making most use of allowances.
Visit the Tax Free Adviser.com for tips.