Tax in the UK can be complex, but it also offers a range of incentives and reliefs that can significantly reduce your liability. Yet many individuals and business owners fail to take full advantage of them — often due to lack of awareness or poor planning. Here are key tax breaks you could be missing.
1. Individual Savings Accounts (ISAs)
Each tax year, you can save or invest up to £20,000 in an ISA, with all returns sheltered from income tax and capital gains tax. Despite this, many savers leave money in taxable accounts or underuse their full allowance.
2. Pension Contributions
Contributing to a pension not only builds retirement savings but also attracts tax relief of up to 45%, depending on your income bracket. Business owners can also make employer pension contributions to reduce corporation tax.
3. Capital Gains Tax (CGT) Allowance
In 2025, the annual CGT allowance is just £3,000. Timing sales to utilise this exemption, offsetting gains with losses, or transferring assets to a spouse can help minimise CGT.
4. R&D Tax Credits
UK businesses investing in innovation can claim Research & Development (R&D) tax credits. Many eligible SMEs don’t realise their software development or process improvements qualify.
5. Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)
Investors in qualifying startups can claim income tax relief of up to 30% (EIS) or 50% (SEIS), plus CGT exemptions. These schemes support startup funding while offering generous incentives.
6. Marriage Allowance and Inheritance Tax Planning
Transferring unused personal allowance to a lower-earning spouse, or gifting assets strategically during your lifetime, can create significant tax savings. Yet these options are often overlooked without planning.
By working with a financial advisor or tax specialist, you can ensure you’re not leaving money on the table. The UK tax system rewards foresight — take advantage of it.