Financial Planning

10 ways to save on tax in 2021-22

10 ways to save on tax in 2021-22

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult an independent financial adviser.

We should all pay our fair share to society. Yet none of us should pay more than necessary on tax, especially when we support a family. In this article, our financial planning team at Cedar House wanted to offer 10 tips for saving on tax in 2021-22. 

If you’d like to find out more or discuss your own financial plan with us, please contact our team for more information or to access personalised financial advice:

020 8366 4400 or


#1 Tax code

It is surprising how common it is for workers to have the wrong tax code – overpaying on tax for months, or even years. This can happen for those on emergency tax, for instance, which means that your income is taxed above the tax-free personal allowance (£12,570). Here is a useful guide for checking your tax code.


#2 Pension contribution entitlement

For Basic Rate taxpayers, the PAYE and auto-enrolment system should automatically apply 20% tax relief to your pension contributions. In effect, this means it “costs” you £80 to put £100 into your workplace pension. However, Higher Rate and Additional Rate taxpayers must claim the extra 20/25% tax relief by writing a letter to HMRC. Make sure you don’t miss this!


#3 Charitable giving

Giving is a noble act in itself. However, the UK government also tries to incentivise giving via the Gift Aid scheme, which allows you to claim 25p for every £1 you give away. You simply need to make a declaration by filling in a form when making a donation to a registered charity. Moreover, Higher Rate and Additional Rate taxpayers can use their tax return to claim back the difference between their rate and the Basic Rate on their donation.


#4 Allowances for couples

For married couples and civil partners, there may be an opportunity to save on tax if one of you is a Nil Rate taxpayer whilst the other earns. One example is the Marriage Allowance, where the former can move 10% of their income tax personal allowance to the latter (i.e. £1,250). This could represent a tax saving of up to £250 per tax year (provided no one is on the Higher Rate).


#5 Capital gains disposal

Each financial year, you are allowed to sell assets worth up to £12,300 in profits without drawing capital gains tax (CGT). Therefore, by spreading the disposal of your assets over multiple tax years, it is theoretically possible to mitigate or even eliminate a CGT bill – assuming you can wait, of course, and assuming the profits from the asset fall within this allowance.


#6 Employee benefits

Take time to familiarise yourself with all of the benefits offered by your workplace which could translate into savings. For instance, if you work from home, there may be tax relief available to you for certain equipment and household costs. Benefits will be offered via salary sacrifice, which can have positive and negative implications for your financial plan. For instance, it could represent a short-term tax saving, yet also limit the amount you can borrow for a mortgage.


#7 Child benefit tax charge

If you receive child benefit and you – or your spouse/civil partner – earn over £50,000 per year (in adjusted net income), then an income tax charge appies. If both people in the relationship earn over this amount each year, then the higher earner receives the charge. For each £100 over this threshold, a 1% charge is applied. Essentially, this reduces the net benefit of the child benefit payment to 0 once the income nears £60,000. To mitigate this, therefore, the higher earner can consider charitable gifts and pension contributions. 


#8 Individual savings accounts

An ISA is a great tax-efficient vehicle for savings and investments – particularly if you are going over your allowances. In 2021-22, you can put up to £20,000 into an ISA(s) per tax year and the dividends, capital gains and interest you generate will be free from tax.


#9 Tax-efficient investments

Certain assets have attractive tax schemes attached to them which can present ways to save a lot of money come April 5th. The Enterprise Investment Scheme (EIS), for instance, lets you claim back 30% on investments worth up to £1,000,000 per tax year – representing a potential total tax saving of £300,000. Make sure you consider these types of investments carefully with your financial adviser, however, as they can come with a higher level of capital risk.


#10 Self-employed perks

Those who work for themselves can access a range of unique tax benefits with some effective planning. For instance, make sure you make full use of your tax-deductible expenses. After all, if you are needlessly recording more profit than you have actually made, then you stand to face a higher tax bill than is really necessary. Make sure you accurately take note of fuel costs, phone charges and home office running costs for your next tax return.



Interested in discussing your financial plan with an experienced financial adviser? Get in touch today to discuss your financial plan with a member of our team here at Cedar House via a free, no-commitment consultation:

020 8366 4400 or


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