10 Legal Ways to Pay Less Tax in the UK (2025)
Most UK taxpayers overpay. Pension contributions, ISAs, Marriage Allowance and gift aid alone can save £2,000+ a year for a typical higher-rate earner.
These are HMRC-blessed reliefs — not loopholes. Use as many as apply to your situation.
1. Max your pension
Annual allowance £60,000. Each £100 in costs a higher-rate taxpayer £60.
2. Use your ISA allowance
£20,000/yr, no tax on growth or withdrawals.
3. Marriage Allowance
£252/yr if one partner earns under £12,570.
4. Salary sacrifice
Saves 12% NI on top of normal pension tax relief.
5. Gift Aid
Higher-rate donors reclaim 25% of donations via self-assessment.
6. Bed & ISA
Move taxable investments into an ISA wrapper each tax year.
7. Use your CGT allowance
£3,000/yr tax-free capital gains.
8. Spouse asset transfers
No CGT between spouses — use both allowances.
9. EIS/SEIS/VCT
30–50% income tax relief on qualifying investments (high risk).
10. The £100k pension trap
Sacrifice income over £100k into pension to recover personal allowance — 60% effective relief.
Work out your UK income tax and National Insurance for the 2025/26 tax year. Covers personal allowance taper, basic, higher and additional rates.
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