How to Benefit From Your Uk Tax Return!
Being savvy about your UK tax return procedures as a student can save you loads in cash!
Hence, the time is now, to get better acquainted with HMRC rules and how UK tax rules work in your favour. You could ask the friendly tax consultants at Taxback for a better evaluation of your case, as tax laws and HMRC regulations are pretty complicated, plus within certain conditions, you can claim back UK tax return. While this article strives to educate you on tax rules applicable to students, in the simplest form, do talk to us for a full evaluation of your case when making a claim on your UK tax returns.
1. Pay Tax Only if You Earn Above the Stipulated Amount
Only individuals earning over the ‘personal allowance’ limit are liable to pay tax in the UK! Here’s the deal, you are allowed to earn up to a certain amount, tax free. Earn over the set range and you are liable to pay tax. To be more precise, your personal allowance is the benchmark for HMRC to decide if you pay tax or not; the personal allowance threshold is updated at the end of a tax year (April to April), the 2019/20 personal allowance is set at £ 12,500, for the first financial year; earn above this amount and you owe the taxman.
2. There is a ‘taxable’ and ‘non-taxable’ Income
Taxable income is counted towards your personal allowance, hence you need to keep track of wages, bank account interests earned exceeding £ 1,000 annually, state benefits (job seeker allowances included), bonuses, allowances received from jobs and even online surveys which pay are counted towards your personal allowance; exceed the threshold and you become taxable.
Non-taxable income includes, grants and scholarships, student finance packages, bursaries, interest from ISA savings accounts, state benefits etc. the most important aspect to take note is, you only declare your ‘taxable income’. This is where the services of a tax consultant are beneficial, lets evaluate your earnings and give the taxman only what is required.
3. You Can Reclaim Any Overpaid Tax and Also National Insurance NI
While NI and tax are necessary for the welfare of all UK residents; students often end-up getting overtaxed via the PAYE system. You can ‘claim back UK tax’, do this by regularly checking your payslips and deductions; a tax calculator will help you assess if you have overpaid tax, then follow HMRC rules for reclaiming income as a student.
4. If You’re Self-employed You Could Save on Paying Uk Tax
Freelancing students and those engaged in a personal business, such as being a proof-reader for fellow students’ essays, or even some side-line ‘pet sitting’ services can be counted as self-employed! If this is you, then register yourself online as ‘self-employed’ with HMRC. The benefits, only profits are calculated towards your personal allowance.
5. Turn Your Savings Interests Into ‘tax-free’ Cash
If your earnings are more than your expenses, we advise you bank the rest and enjoy earning an interest. Individuals within the basic tax range (less than £50,000 annually) are given a tax-free personal savings allowance of earning bank interests up to £ 1,000! As most students fall into the basic tax range and it’s almost impossible to exceed earning an interest of £ 1,000 annually, go ahead and make those savings count
6. Earn Tax-free Interests With an Individual Saving Account (ISA)
If your earnings are high, you could benefit from an ISA and the tax-free interest allowance of up to £ 1,000 for low-rate tax payers and a £ 500 allowance for earners of £ 50,000-150,000 annually.
7. Boost Your Student Finance via Tax-rules
When applying for your student finance, do keep in mind the taxable earnings, omitting the non-taxable earnings such as student loans, bursaries etc.; finally, here’s the bonus- student loan repayment limits are based on taxable incomes. Ready for a consultation, let’s talk and see how you can save with UK tax!