None of us enjoys taxes, and each time we get sent a bill, or see them printed on our wage slip this hurts quite a bit. However while no one enjoys tax, for some of us it is even worse than it is for others. For those in debt, specifically taxes are the last thing we need and this can sting particularly badly each time we have to part with the money that we badly need.
There are countless places our taxes come out, but thankfully there are some ways you can reduce your costs and pay less taxes thereby saving more money to use for other things. Here we will look at how to pay less taxes and where precisely we are losing the most money.
Council Tax: Council tax is tax you pay for having or living in your property. The concept is that you are living in a property in a certain area and that means that you will be enjoying the amenities and benefits in that area such as roads pavements clean streets and public toilets. Thus you’re paying for that.
This is also based on your property however, and it is thought that those with bigger and nicer properties should pay more towards the council tax because presumably they have more. To pay less taxes in this domain then, you just need to move to a smaller property. Alternatively, look into a house share – this way you pay the same tax but split between several of you. Also be sure to ask around when buying your home what band it is in for tax and you may find you can get something you like as much but pay less tax on it if it doesn’t quite meet the same criteria for that band.
VAT: Value Added Tax is the tax that is added onto a transaction that you have to pay on top of the cost of the item itself. To make this cheaper you can find ways to avoid the VAT on your larger items – such as by buying from ‘duty free’ shops in airports. Also make sure that you always work out your tax or ask what it is before you buy something – it’s very easy to forget otherwise that that’s going to be added on.
Car: Car tax is an expense that you pay simply for owning a car before you add your car insurance or petrol. To pay less tax on your car the simple solution is to buy a car that costs less because this will be reflected in the tax. Alternatively, if you buy a very old car then sometimes you will find that it doesn’t have any tax on top of it at all. Likewise you can pay less tax by buying a hybrid car or an electric car – this is intended to be an incentive to help people go green.
Income Tax: Your income tax is tax on your income as the name suggests. Unfortunately there is little you can do about income tax if you aren’t happy with it, though you might want to consider moving country or state where you can find it’s much cheaper. You should also look into becoming self employed or starting your own business. Not only does this have many lifestyle benefits, but it also means that you can claim back a lot of your business expenses and pay less tax as a result.