Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust. Or you can check out our online calculator to see if you could be due a refund.
What is tax relief?
Tax relief is a way you can save on your tax bill. You either pay less tax because you are taking into account money you have spent on business-related items, such as business expenses if you are self-employed. Or you can claim your tax back (or have it repaid in some way, such as into a personal pension fund).
Some methods of tax relief are applied to you automatically but others you have to claim yourself.
What can you get tax relief on?
There are a number of ways you can get tax relief. You might be entitled to claim tax relief on your private pension contributions and charitable donations. Some people might be entitled to claim it on maintenance payments they make. If you spend time working on a ship outside of the UK there are certain tax reliefs you might be able to claim. Then there is the whole area of business expenses. If you are self-employed (as a sole trader or partner in a business partnership), you can get tax relief on the costs of running your business. If you are an employee, you can still claim tax relief if you spend your own money on certain business expenses, such as travel or equipment you need to do your job.
For tax on private pension contributions, you can get tax relief if you have workplace pension contributions deducted from your wages before tax by your employer or if your pension provider claims tax relief and adds it to your pension pot.
If you spend time working on a ship outside the UK, you might be entitled to claim Seafarers Earnings Deduction – see our handy guide on Seafarers Earnings Deduction for more information about this form of tax relief.
How can you get tax relief on your charitable donations?
If you are an individual and you make donations to charity, the donations are tax free which means you can claim tax relief on any charitable donations you make. To claim your tax relief, you can either use the Gift Aid system or use the Payroll Giving system, where you make your charitable donations directly from your wages or pension via your company’s payroll.
Gift Aid donations
Charities and Community Amateur Sports Clubs (CASCs) are entitled to register with HMRC to take part in the Gift Aid Scheme. This means that once they have registered, if you make a charitable donation to that organisation, they can claim back the tax that you have already paid on your donation so that they get extra funds from your donation.
You will be asked to sign a form by the CASC or charity, which will give them the right to claim back the proportion of tax you have already paid on your donation. The charity or CASC must have an HMRC charity reference number – if you’re not sure that the charity or CASC that you are donating to has one of these HMRC numbers, you can ask to see it. If you are signing Gift Aid forms, be aware that if the charity or CASC claims more tax than you have actually paid, you might be asked to pay the difference by HMRC. Make sure you have paid at least enough tax to cover the Gift Aid that the organisation may claim from your donation, especially if you are a low earner.
If you pay a higher rate of income tax (at 40% or 45%) you can claim back the difference between the tax you have paid on the donation and what the charity got back through Gift Aid. You claim this on your Self Assessment form. If you don’t need to fill in a Self Assessment form, contact HMRC to inform them of your charitable donations – the number for the HMRC Income Tax helpline is 0300 200 3300 (textphone 0300 200 3319). Make sure you have your National Insurance number to hand when you call so they can locate your records.
If you claim Married Couple’s Allowance and you make charitable donations with Gift Aid, your tax-free personal allowance may increase. If you need to fill in a Self Assessment tax return, this allowance will be automatically adjusted if you are eligible. If you’re not required to send a Self Assessment tax return, you can call HMRC to inform them of your charitable donations.
Payroll Giving Schemes
You might make your charitable donations through a Payroll Giving scheme, run by your employer or pension provider. If this is the case, your donations will be made before any Income Tax is deducted from your income, so the tax relief is automatically applied. You will still pay National Insurance on your donations but you won’t be subject to any Income Tax on them. This is all sorted out by your company’s payroll so you shouldn’t need to do anything.
What about tax relief for maintenance payments?
If you make maintenance payments to a former husband, wife or civil partner, you might be able to claim Maintenance Payments Relief. This would reduce the amount of Income Tax you would have to pay.
You can claim this tax relief if all the following apply:
- Either of you (you or your husband, wife or civil partner) were born before 6th April 1935
- You are paying maintenance as ordered by a court order after the relationship has ended
- The payments relate to maintenance of your former wife, husband or civil partner or for any of your children who are under 21. If your ex-spouse or former civil partner has remarried or is in a new civil partnership, you won’t be able to claim this tax relief.
Maintenance Payments Relief is worth 10% of the maintenance you pay per year, up to a maximum of £326 per tax year (this works out as 10% of £3,260).
If you want to claim this tax relief, you need to call HMRC on their Income Tax helpline – the number is 0300 200 3300 (textphone 0300 200 3319).
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax rebate. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.