Image courtesy of Sira Anamwong at FreeDigitalPhotos.net
A lot of people dislike paying tax and also think that it is unfair that big corporations seem to be able to get away without paying tax whereas ordinary people seem to have to pay it. However, there are ways that you can avoid paying tax and all within the law too.
The more that you earn, the more income tax that you will have to pay. This means that one way to avoid paying so much tax is to earn less. This may sound ridiculous, but it can just mean that you reduce your take home pay, but use money before tax to invest in things. If you pay into a pension scheme, for example, then this money will be taken out before you are taxed. There may also be a company share scheme and it may be possible for you to be able to buy shares before being taxed too.
Do not buy Goods that are Taxed
There are certain goods that you buy that are taxed. Some have value added tax (VAT) others have additional tax such as alcohol, cigarettes and fuel. If you buy less of these items then it means that you will be paying less in tax.
Use Tax Free Accounts
It is possible to put your savings into accounts which will give you interest back free of charge. These vary and some do not pay a lot of interest anyway. It is worth remembering that you may be able to earn a certain amount of interest without paying tax on it and so you may not need to protect your money in an account like this. A financial advisor would be able to help you to understand more about this.
Put Money Abroad
There are some people that put their money abroad and therefore manage to avoid paying tax in the country that they live. These schemes may involve paying some tax but not as much as in the country that you live. This may not always be easy as it may be necessary to have a residence in the country before you are allowed to open an account there.
Use an Accountant
An accountant, will be able to let you know where you might be able to reduce your tax bill. This is particularly relevant if you are self-employed as you will be able to offset your profits against quite a lot of different things. Without an accountant you may not realise what things you will be able to claim for. This could be anything you buy for your business, but if you work at home, you may be able to claim for things that you have in your home as well.