Reducing Taxable income

Basingreenwood2022
Basingreenwood2022 Forumite Posts: 3
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edited 30 June at 9:03AM in Cutting tax
Hello - is there any way to reduce to taxable income on wages as currently I have calculated that I pay about 3,000 on taxes and same for national insurance - is there any way to reduce or offset the 3000 taxes?

Comments

  • SiliconChip
    SiliconChip Forumite Posts: 1,017
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    Earn less money.
    Increase pension contributions.
    You'll probably only get more detailed resonses if you post better information about how much you earn.
  • Basingreenwood2022
    Basingreenwood2022 Forumite Posts: 3
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    Hello Again
    providing more details - I earn about £31,500 year and i am taxed £3,500+ and National Insurance £2,200+ - if i contribute about £1578 to pension this will zero my tax i pay but is there any other way as well to reduce to national insurance tax?  
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Forumite Posts: 11,513
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    edited 30 June at 9:46AM
    Hello Again
    providing more details - I earn about £31,500 year and i am taxed £3,500+ and National Insurance £2,200+ - if i contribute about £1578 to pension this will zero my tax i pay but is there any other way as well to reduce to national insurance tax?  
    On that salary only certain types of pension contribution will actually reduce your taxable income and the income tax you pay.

    Which method will you be using to make the contribution of £1,578?

    Net pay
    Relief at source (RAS)
    Salary sacrifice 

    And why do you think paying £1,578 into a pension by any method would reduce your tax to zero 🤔
  • Basingreenwood2022
    Basingreenwood2022 Forumite Posts: 3
    First Post
    Newbie
    Hello Again
    providing more details - I earn about £31,500 year and i am taxed £3,500+ and National Insurance £2,200+ - if i contribute about £1578 to pension this will zero my tax i pay but is there any other way as well to reduce to national insurance tax?  
    On that salary only certain types of pension contribution will actually reduce your taxable income and the income tax you pay.

    Which method will you be using to make the contribution of £1,578?

    Net pay
    Relief at source (RAS)
    Salary sacrifice 

    And why do you think paying £1,578 into a pension by any method would reduce your tax to zero 🤔
    Current this is only based on the MSE tax calculator - I just want a calculator that will help reduce tax and NI and advise the best way to do so?
  • yorkiechick
    yorkiechick Forumite Posts: 109
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    Unless your taxable earnings are £12,570 or less, you'll pay tax. You could salary sacrifice pension contributions which would reduce tax and NI but you'd obviously have less in your pocket too.
  • r6mile
    r6mile Forumite Posts: 181
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    As you are a basic rate payer, your combined income tax + national insurance marginal rate is 32% of what you earn over £12,570. Even if salary sacrifice to your pension is available to you, putting in an extra £100 in your pension means you will save £32 in NI+Tax but also lose £68 in take-home pay. Up to you whether that is worth it! Ultimately taxes are a part of life ...
  • Strummer22
    Strummer22 Forumite Posts: 494
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    An alternative that has not yet been suggested is to take a job overseas somewhere like the United Arab Emirates where you pay no income tax. 

    All measures to avoid paying tax are quite drastic. If you want to work in the UK, earn more than £12,570, and not pay any earnings above that amount into your pension, then you will have to pay tax and NI.  
  • purdyoaten2
    purdyoaten2 Forumite Posts: 3,796
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    edited 30 June at 10:45AM
    Hello Again
    providing more details - I earn about £31,500 year and i am taxed £3,500+ and National Insurance £2,200+ - if i contribute about £1578 to pension this will zero my tax i pay but is there any other way as well to reduce to national insurance tax?  
    On that salary only certain types of pension contribution will actually reduce your taxable income and the income tax you pay.

    Which method will you be using to make the contribution of £1,578?

    Net pay
    Relief at source (RAS)
    Salary sacrifice 

    And why do you think paying £1,578 into a pension by any method would reduce your tax to zero 🤔
    By applying my super imaginative skills I assume that the op means £1578 per month - which is the amount upon which he pays tax. Presumably we are talking salary sacrifice which would also eliminate NI. Minimum wage regulations will be an issue.
    ADIOS - ES HORA DE IR 🙋♂️

    (Ha sido divertido)
  • Albermarle
    Albermarle Forumite Posts: 18,745
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    Hello Again
    providing more details - I earn about £31,500 year and i am taxed £3,500+ and National Insurance £2,200+ - if i contribute about £1578 to pension this will zero my tax i pay but is there any other way as well to reduce to national insurance tax?  
    There are only two things certain in life . Death and taxes.
  • SiliconChip
    SiliconChip Forumite Posts: 1,017
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    Another alternative is to greatly increase your earning ability so that you're making enough money to be able to pay for professional advice that will give you access to tax avoidance options that most people never have the opportunity to use. Perhaps you could ask Mr Sunak (or possibly Mrs Sunak) for some suggestions.
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