How to Avoid Higher Tax Bands?

Inflation, rising wages, multiple income streams, and unclaimed allowable expenses are just a few of the factors pushing more individuals into higher tax bands.

Since April, UK businesses have also been paying more tax and National Insurance (NI) Contributions due to the reduction of thresholds for employees (NI secondary threshold).

Is there anything we can still do to avoid higher tax bands?

Absolutely — effective tax planning and bookkeeping can make a significant difference.

One effective strategy is to increase your pension contributions.

Pension contributions are exempt from income tax, which reduces your taxable income and can potentially move you into a lower tax band.

In addition, the UK government provides 25% tax relief on personal pension contributions — for every £1 you pay in, HMRC adds another 25p. If you’re a higher-rate taxpayer, you may be entitled to claim additional tax relief through your self-assessment tax return.

Check if you know all tax-efficient strategies