Legal Tax Mitigation - advice

[shabak]

Hello: Is there any other legal tax mitigation allowance (beside pension) that you could recommend? Working for example Inside IR35 / Outside IR35 (Outside I know its expenses, electronics, subsistence etc).

[Lance]

- Live in the Cayman Islands.
- If you listen to some of the advice on here you'd just earn less.
- Outside IR35 will have less tax, but it's not just inside or outside. They are different ways of working.

And be careful about the use of the word legal. There are plenty of perfectly legal activities that will look great at face value, but hurt in the long run.

[eek]

Hello: Is there any other legal tax mitigation allowance (beside pension) that you could recommend? Working for example Inside IR35 / Outside IR35 (Outside I know its expenses, electronics, subsistence etc).

The only inside IR35 that I can think of would be salary sacrifice for an electric car - I don't know of any umbrella firms that offer it though.

[mattster]

Put as much as you can into your personal pension, even to the extent of living off savings if you happen to have some that aren't tax advantaged (i.e. not in an ISA).
You can put £40k a year in, and top up 3 years of lower payments as well. Depending on how old you are, you might not even have to wait too long to start getting it out.

[Crossroads]

Let the tax tail wag the investment dog: VCT, EIS, SEIS...

[shabak]

Put as much as you can into your personal pension, even to the extent of living off savings if you happen to have some that aren't tax advantaged (i.e. not in an ISA).
You can put £40k a year in, and top up 3 years of lower payments as well. Depending on how old you are, you might not even have to wait too long to start getting it out.

Thanks! This is actually very good advice! I dont need much money atm and indeed putting 40k in the pension will save me tax that will get wasted by this politicians anyway.

[Lance]

wasted by this politicians anyway.

you mean like education, healthcare, roads and infrastructure that make it possible for you earn this money? That waste?

[Paralytic]

you mean like education, healthcare, roads and infrastructure that make it possible for you earn this money? That waste?

And don't forget about useless PPE and a world-beating track and trace system. And wallpaper.

[northernladuk]

Thanks! This is actually very good advice! I dont need much money atm and indeed putting 40k in the pension will save me tax that will get wasted by this politicians anyway.

Don't worry, they'll change the pension laws at some point and they'll get it someway or other.

[tomtomagain]

Thanks! This is actually very good advice! I dont need much money atm and indeed putting 40k in the pension will save me tax that will get wasted by this politicians anyway.

You need to avoid breaching the lifetime allowance, currently £1m + a bit, because once you do you will pay tax of 55% on anything over that. And you pay tax on your withdrawals as though they were income ( over the personal allowance ).

In short, pension tax is complicated, and certainly not the free ride that some people assume. I see it as tax-deferred rather than tax mitigated.

£1m might seem a very big number, very far away, but a few years of 40k contributions and, hopefully, reasonable growth will start sending you towards that number.

And of course, you have to hope that HMRC don't change the rules during your 30-year working life, which they have already done by slashing the lifetime allowance.