tax relief

H

henrietta

Guest
i am paying tax at 42% , i am looking for advice on how to reduce this

what can i invest in other than pension funds ?
 
The first thing is to make sure that your tax credits and allowances are correct and that you are claiming all allowances available to you. Use Karl Grabe's tax calculator to sanity check your tax and PRSI payments and then make sure that you are claiming relief for payments such as:

Mortgage interest relief (granted at source these days)
Service charges
Qualifying medical expenses
Etc.

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Pensions are very tax efficient but you should invest in them if you need to make preparations for your retirement and not just to avail of the tax relief (actually tax deferral since the pension income will eventually be assessable for income tax).

What other savings & investments do you have? If you have and SSIA then maximising contributions to that is one way to effectively get some tax back.
 
lower than you think

Henrietta, I'm sure you realise that though you may pay 42% income tax on any extra income you earn, you DO NOT pay 42% across all your income.

For example, I am on the 42% rate, like you and many others, but I pay about 18.7% of my wages in tax.

Protocol
 
Off the point but light-hearted ....

I'm not cribbing about tax or questioning the value for money but there was a really interesting point alluded to in the program about the life of a medieval peasant (I think it was Terry Jones, on BBC). He made the point that their lives may not have been as bad as we like to presume - for instance, he had figured out that we have to pay double the tax they did. They had to work 4 weeks a year for the lord for free for his protection and use of the land (i.e. tax). It got me thinking and if you take 18.75% of say, €35,000, I reckon that's 45 working days a year in tax, so technically, that person won't be earning their "own money" until week 10, or 1st March. Scary or what.

Rebecca
 
Re: Off the point but light-hearted ....

I don't think that the medieval peasant could claim welfare benefits or go to hospital when sick or drive down the country for his holidays etc....
 
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