{"id":8024,"date":"2020-10-22T18:06:29","date_gmt":"2020-10-22T17:06:29","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=8024"},"modified":"2025-09-05T12:25:33","modified_gmt":"2025-09-05T11:25:33","slug":"are-there-legitimate-ways-to-reduce-tax","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/the-tax-basics\/how-to-reduce-the-tax-you-pay\/are-there-legitimate-ways-to-reduce-tax\/","title":{"rendered":"Are there legitimate ways to reduce tax?"},"content":{"rendered":"\n<p>There are lots of legitimate ways to reduce tax. Another way of describing this is being more tax efficient. It\u2019s a method of reducing the tax you pay through tax reliefs and other schemes.&nbsp;<\/p>\n\n\n\n<p>Be aware, that this is not the same as tax evasion. Tax evasion is illegal &#8211; and you will be pursued and shamed by HMRC if you involve yourself in it. <\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-neutral m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\">The <\/span><b>income tax<\/b><span style=\"font-weight: 400;\"> rates in the 2025\/26 tax year \ud83d\udc47<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>Income<\/strong><\/td>\n<td><strong>Tax rate<\/strong><\/td>\n<td><strong>Tax band<\/strong><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Up to \u00a312,570<\/span><\/td>\n<td><span style=\"font-weight: 400;\">0%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Personal allowance<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a312,571 to \u00a350,270<\/span><\/td>\n<td><span style=\"font-weight: 400;\">20%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Basic rate<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">\u00a350,271 to \u00a3125,140<\/span><\/td>\n<td><span style=\"font-weight: 400;\">40%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Higher rate<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">over \u00a3125,141<\/span><\/td>\n<td><span style=\"font-weight: 400;\">45%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Additional rate<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n\n<h2 class=\"wp-block-heading\">What are legitimate ways to reduce tax?<\/h2>\n\n\n\n<p>First of all, it\u2019s worth getting to know the reliefs that you\u2019re entitled to. There are actually loads that you can make the most of, whether you\u2019re employed or self-employed.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s a list of just a few to look into:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/taxfix.com\/en-uk\/marriage-allowance-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">The Marriage Allowance<\/a><\/li>\n\n\n\n<li>Pay into a pension<\/li>\n\n\n\n<li>Tax-free childcare scheme<\/li>\n\n\n\n<li>Claim back business expenses<\/li>\n\n\n\n<li>Dividend Allowance<\/li>\n\n\n\n<li>Capital Gains Allowance<\/li>\n\n\n\n<li>Tax relief of charitable donations<\/li>\n\n\n\n<li>Buy shares through your company<\/li>\n\n\n\n<li>Look into <a href=\"https:\/\/taxfix.com\/en-uk\/what-is-vct-venture-capital-trust\/\" target=\"_blank\" rel=\"noreferrer noopener\">VCTs<\/a><\/li>\n\n\n\n<li>Tax relief on buy to let mortgages<\/li>\n\n\n\n<li><a href=\"https:\/\/www.cyclescheme.co.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">Cycle to Work scheme<\/a><\/li>\n\n\n\n<li>Get a company car<\/li>\n\n\n\n<li>Sacrifice part of your salary for equivalent benefits (e.g. medical insurance)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">I\u2019m a high earner &#8211; what can I do?<\/h2>\n\n\n\n<p>When you earn over \u00a3100,000, you fall into a tax trap. You end up paying 60% tax because you gradually become ineligible for the tax-free Personal Allowance.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"embed-container\"><iframe loading=\"lazy\" title=\"Tax in 10(ish) seconds - what is your employment status?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/i0hMhE-T9Xs?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<p>But there are actions you can take to avoid this super-high taxation:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Save more into your pension<\/li>\n\n\n\n<li>Ask for a non-cash (rather than cash) bonus<\/li>\n\n\n\n<li>Invest in a startup<\/li>\n<\/ol>\n\n\n\n<p>Read more about how to <a href=\"https:\/\/taxfix.com\/en-uk\/what-is-the-60-percent-tax-trap\/\" target=\"_blank\" rel=\"noreferrer noopener\">avoid the 60% tax<\/a> for high earners.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are lots of legitimate ways to reduce tax. Another way of describing this is being more tax efficient. It\u2019s a method of reducing the tax you pay through tax reliefs and other schemes.&nbsp; Be aware, that this is not the same as tax evasion. Tax evasion is illegal &#8211; and you will be pursued [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[432,427],"tags":[416,357,418],"class_list":["post-8024","post","type-post","status-publish","format-standard","hentry","category-how-to-reduce-the-tax-you-pay","category-the-tax-basics","tag-benefits-reliefs-grants","tag-high-earner","tag-invest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are there legitimate ways to reduce tax? &#8211; Taxfix (formerly TaxScouts)<\/title>\n<meta name=\"description\" content=\"There are lots of legitimate ways to reduce tax. 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