Income Tax Planning & Advisory

Maximise your pension contributions

Investing in a pension is one of the most tax efficient ways to save money and provide for your retirement.

You can put 100% of your earnings into a pension, and as a higher rate taxpayer, you’ll be eligible to claim an additional 20% tax relief. This is on top of the basic 20% tax relief claimed by your pension provider, making a total saving of 40%. This applies to workplace and personal pensions, but you must remember to claim additional tax relief via your self-assessment tax form.

For those who are employed, when you increase your pension contributions, your employer will generally increase theirs too. Your pension policy documents will provide further details on this.

Investing in a pension can be a great way to save on tax, but bear in mind that any money you pay into a pension will not be available to access until you reach retirement age. This is currently set at age 55 but will increase to age 57 from 6 April 2028.

A qualified financial adviser will be able to discuss the best course of action based on your circumstances.

Consider investing in an ISA

Unlike traditional savings accounts, a standard ISA allows you to save up to £20,000 tax free each tax year.

There are various types of ISA, depending on your individual needs:

You are able to pay into more than one of each ISA type per year (excluding LISAs and JISAs). The maximum amount invested remains at £20,000.

Use your dividend allowance

If you own shares in a company, it’s likely (if the company does well), that you’ll receive a dividend payment.

While any dividends received are taxable, you will receive a dividend tax allowance each year. The allowance for 2025/26 is £500, meaning you’ll only pay tax on anything you earn from dividends above that amount.

The dividend allowance is the same for everyone, regardless of any other types of income you receive. It cannot be carried over to the following year.

Use your capital gains allowance

If you make a financial gain from selling an additional property or other asset worth more than £3,000 (excluding your vehicle), you’ll need to pay capital gains tax.

Everyone receives a capital gains tax allowance, although this amount has sharply decreased in recent years. For the 2025/26 tax year, you will need to pay capital gains tax on anything you gain from the sale of an asset over £3,000.

The percentage you pay in capital gains tax differs dependent on the tax band you fall into. For higher rate and additional rate taxpayers, capital gains tax is set at 24% on the sale of additional residential property and other chargeable assets.

For basic rate taxpayers, the rate depends on the size of your gain, your taxable income and what asset has been sold.

If you are selling an additional property that was previously your only home, you may be liable for a reduction in the amount of capital gains tax you pay. However, this is a complicated topic and there is no one size fits all solution, so it’s best to speak to a financial adviser who will be able to explain more. Charges may apply.

Consider taking part in salary sacrifice schemes

Salary sacrifice schemes allow employees to purchase a non-cash benefit from their employer, such as extra holiday. In exchange, the employer will reduce the amount of pay the employee receives.

Backed by the Government, salary sacrifice schemes help employers and employees to save on tax because less take home pay means less income to be taxed on.

For example, a taxpayer whose pay puts them just into the next tax bracket could reduce the amount of tax and National Insurance they pay by choosing to sacrifice some of their salary in exchange for a non-cash benefit from their employer.