Tax Relief Accountancy

It is the bounden duty of every citizen to pay taxes, as the government utilises the funds collected through it for the development of the country as well as the development of new projects. However, determining the amount of tax to be paid is a difficult task, as it requires lots of calculation. The government has set specifications that determine the amount of tax you have to pay. Citizens have to earn a specific amount each year, known as your "personal allowance" before you need to pay income tax. For example, you do not have to pay tax in the United Kingdom if you earn up to £11,500. The basic rates of tax for individuals who earn from £11,501 to £45,000 have to pay 20% tax on income above £11,500. Therefore, if your total earning in the financial year is £12,000, you have to pay 20% on £500 i.e. £100.

More information on accountancy advice

Tax relief

Most individuals are not aware that they can avail of substantial relief while paying taxes. If you have paid money to charity donations, you can deduct that amount from your gross annual income before calculating your taxable amount. For example, an individual who has earned £12,000 and has paid £500 as charity donations does not have to pay any tax, as his total taxable amount is within the threshold of £11,500.. You can also claim tax relief on maintenance payments, pension contributions, as well as time spent working outside the United Kingdom on a ship. Employees too can avail of tax claims if they spend their own cash for purchasing things required for their job or the amount spent for travelling for trips for their company. Business owners too can claim tax deduction on the amount spent on running their business such as energy bills, maintenance, salary paid to staff, and much more. These are just the tip of the proverbial iceberg. You might end up paying more taxes that you need to unless you had over the calculation job to professional tax consultants.

Procedure you need to follow

You need to prepare your account statement, or a list of your earnings and expenditures, as professional tax consultants require this information to determine the exemptions you can avail of. They then deduct this amount from your gross earnings to arrive at the taxable income. They will also show you steps that you can follow for reducing your taxes further. For example, you can purchase a life insurance claim, as you can deduct this sum from your earnings to arrive at the taxable amount. The specialist will also prepare your balance sheet, file the documents with the income tax department, pay them the taxable amount, collect a receipt for the documents submitted and the amount of tax paid, and hand it over to you.

What different areas tax consultancy covers?

Tax consultancy covers diverse areas such as:

- Tax audits and reviews

- Preparing tax declarations

- Representing clients in administrative and judicial proceedings

- Preparing transfer pricing documentation

- Tax as well as fiscal representation