Income Tax reliefs
There are some tax reliefs which allow you to reduce your tax bill further when you pay for certain things which HMRC consider to be work-related or in connection with your home or children. Tax relief is a complicated area. And it is worth getting advice from your tax office or a specialist. Below are some areas where tax relief applies.
Tax relief for giving to charity
There is tax relief available on two forms of charity giving:
- a payroll giving scheme run by some employers and given to charities of your choice;
- a gift under Gift Aid
It's only worth setting up one of these if you are actually paying tax as there can be problems otherwise. There is generally no inheritance tax or capital gains taxes payable if you are giving gifts to charities. For more details >>
Tax relief on earnings whilst training
Have a look at the LITRG website which explains how trainees are taxed.
Tax relief for child care expenses
If you pay for childcare yourself out of your own pocket, you don't get tax relief. However you can get tax free childcare if your employer provides a nursery or play scheme place so long as the employer has met certain conditions (check this with your employer).
If your employer doesn't provide a scheme but gives cash or other help towards your costs this will be taxable. However if you earn less than £8,500 a year and your employer directly organises and pays for a nursery, play scheme, childminder or nanny to look after your child, then you will not have to pay tax on the fees.
For further details see leaflet IR115 Paying for Childcare available at your local tax office or Enquiry Centre.
You might also want to know more about the interaction between childcare vouchers and tax credits which you can find on the LITRG website.
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