If you have been wondering whether or not you can save on tax by taking advantage of tax-saving schemes, the answer is ‘yes’. The amount you can save could be huge, especially if you take into account the amount that you would otherwise have to pay tax on. However, there are a few things you need to consider before you start using these schemes. This article takes a look at some basic tips which should help you make a decision on whether or not tax saving schemes are right for you.
When it comes to tax saving schemes, two of the most common are employer sponsored and limited company. Employer sponsored schemes are designed to give employees higher and immediate tax breaks. These benefits are typically based on the employee’s classification as an employee, their age, length of employment and more. For employees who are retired military, there are also immediate tax saving schemes available. Some examples are Life Insurance Premium Relief and retirement allowance relief.
Limited company tax saving schemes work in the same way as employer sponsored schemes, but the benefits are limited to the owners or members of the company and cannot be passed on to other employees. There is usually a tax charge connected to this type of scheme. You should therefore make sure that you understand all the rules surrounding tax saving schemes before you start using them.