Welcome to the January/February edition of E-Smart Money, our periodic magazine offering help with planning your finances.
This issue we revisit an important topic, that in light of recent political moves is on many people’s minds, tax!
No one enjoys paying tax – whether you’re on minimum wage, or have a seven-figure tax bill, it is unlikely that you enjoy writing that cheque. Obviously living in a modern democracy with the government providing services we all use, taxation is necessary to ensure that vital services that millions rely on remain viable, and efficient. The vast majority of us know and love the NHS, and it is one of the things that many people consider to be a quintessential British value – to be able to call on health services when needed without worrying whether you can afford it.
However, some elements of taxation are if not optional, at least subject to management. In this edition we look at some of the many ways you can optimise your affairs and take advantage of government encouraged ways of reducing the amount of your hard-earned money that you contribute to government coffers. We should never feel embarrassed about tax planning – most tax planning is positively encouraged by government, with most tax planning schemes in place to encourage behaviours that benefit society.
One of the most obvious tax advantages that we can benefit from is pension planning. With very generous tax incentives of offer, everyone should be funding their pension to the best of their ability. However, pensions and their requisite tax incentives exist so that we put some money aside for the ultimate rainy day that most of us will experience, our retirement. Most of us will retire, and we don’t want to be dependent on the state, or the generosity of strangers or family to pay our bills. But planning for the long term is hard, and the offer of generous tax reliefs makes that process easier.
In the interesting times in which we find ourselves, efficient tax planning can offer some relief from ever increasing prices and inconsistent markets, knowing that this type of planning will definitely offer benefits compared to doing nothing.