With rising bills and a worsening cost of living crisis, many families may be feeling financial hardship. It is therefore important that people make sure they are as tax savvy as possible to avoid more of their money going to the government. Express.co.uk spoke exclusively with Michael Barrow, financial adviser at Claro Money, about how Britons can make sure their money is working hard for them.
He said: “There are several things to consider when trying to save on taxes.
“If you are employed, it is important to check your tax code on your payslip to ensure that you are paying the correct amount of tax and national insurance.
“It should be noted that National Insurance has just increased, so this month’s payslip may be different from previous ones. You could be paying the wrong amount.
“If you think the amount you are paying is wrong you should contact HMRC.”
The National Insurance (NI) tax rate increased by 1.25% in early April, adding further financial pressure to workers across the UK.
As National Insurance has just increased payslips may look different to previous ones so Britons are advised to check.
People with the wrong tax code could end up paying thousands of dollars more than necessary.
Tax codes are assigned by HMRC to ensure people pay the correct amount of tax, but errors in this system can occur.
Finally, Mr. Barrow proposed a savings vehicle that can be used in different ways.
He mentioned Individual Savings Accounts (ISAs) as something Brits can use, whatever their goals.
He said: “Finally, your cash ISA, Stocks & Shares ISA, Lifetime ISA and retirement allowances are all reset at the start of the tax year.
“That means you can start investing money in them again. The earlier in the year you start, the more time there is for your contributions to earn interest or returns.
With a stock and equity ISA, Britons invest their money, which could potentially yield higher returns than money in the bank.
By using an ISA, Brits are giving their money more time to grow tax-free, meaning they could end up with more in the longer term.
Investing involves risk, so people should seek advice before putting their money anywhere.