10 ways to pay less tax as an employee.
Paying taxes is a necessary part of working life, but that doesn’t mean you should be paying more than you need to. Many employees are unaware of the tax reliefs and allowances they’re entitled to, which could make a real difference to their take-home pay. The good news? You don’t need an accountant to start saving on your tax bill—these tips are simple enough to implement on your own!
From reviewing your tax code to making the most of workplace schemes, there are numerous ways to legally reduce your tax bill. In this post, we’ll guide you through 10 ways to pay less tax as an employee. Let’s dive in!
1. Check your tax code:
Not sure what your tax code means, follow this link to check your tax code HERE.
If you think your tax code is incorrect, you can call HMRC on 0300 200 3300 to ask them to review it and change it!
2. Marriage Allowance
If you are married and your partner is earning under £12,570 you may benefit from marriage allowance. For more information and to apply HERE.
3. Working from home allowance
If you ever work from home you will be able to claim the tax back on the working from home allowance of £312 a year (£62.40 back in tax). You can also go back and reclaim it for the last 4 years!
You can find out more and claim this yourself HERE.
4. Uniform Allowance
If you wear a uniform for work then you can reclaim the costs you incur for washing that uniform. You can find more information and make a claim to HMRC HERE.
Like the working from home allowance you can make a claim for the last 4 years!
5. Unpaid Expenses
If you incur any expenses that you are required for your job you are able to claim tax back on these expenses. This includes mileage if your employer doesn’t cover the full HMRC allowed amounts (45p for the first 10K miles and 25p thereafter). You can find more information and claim yourself HERE.
6. Childcare Vouchers
If you have a child that is attended nursery, you can use the Childcare Vouchers scheme to buy vouchers to pay for these fees. If you pay in 80% of the cost HMRC will top this up with the remaining 20%.
You can find out more and how to claim yourself HERE.
7. Cycle to Work Scheme
If your employer operates the Cycle to work scheme, you can have your employer buy you a bike through salary deduction, this means you will pay for the bike before tax and national insurance! Meaning any bicycle purchase will immediately receive a 20% reduction in cost. More information can be found HERE.
8. Company Cars – Electric Cars
If your employer offers a salary sacrifice scheme for cars, you will be able to finance a car on your salary before tax. There may be tax to pay in the form of benefit in kind. But if you opt for an electric car the rates are far more favorable than paying for the vehicle after tax! Check this link for more information HERE.
9. ISAs
If you have surplus money sitting in a bank account get it in an ISA! You can save up to £20K a year in an ISA and the interest you make is not subject to tax!
These can be really flexible because you could open a stocks and shares ISA and make investments. Any increase in value of these investments are tax free! More info can be found HERE.
More info on tax for savings interest for savings outside an ISA can be found HERE.
10. Charitable Donations
When you make donations to a charity with gift aid they are able to reclaim an additional 20% which is the tax you have paid on that income. If you are a higher or additional rate tax payer you can reclaim the additional 20-25% tax that you have paid on that income! Follow this link to find out more and how to reclaim this tax HERE.
Summary
Saving on taxes doesn’t have to be complicated. By checking your tax code, taking advantage of allowances like Marriage Allowance or working-from-home relief, and exploring schemes such as Childcare Vouchers or the Cycle to Work program, you can significantly reduce your tax bill while staying fully compliant with HMRC regulations.
At Beyond Accounting, we are a accountants based in York, we specialise in helping individuals and businesses make the most of their finances. Whether you need guidance on tax planning, managing your accounts, or improving your financial efficiency, we’re here to support you every step of the way. Don’t hesitate to reach out to us—we’d love to help you take control of your finances!
