There are a number of different allowances available, such as the trading allowance of up to £1,000 for casual income such as from babysitting or odd jobs in the community; a property allowance of £1,000 to account for any income derived from a person’s home or land, such as letting someone park on their driveway or store items in their garden shed, and the £7,500 rent-a-room scheme if someone lets out a room to a lodger in the home they live in.
Ms Haine said: “There is also tax relief on maintenance payments for the divorced, uniforms you need to buy or repair and maintain for work and charity donations plus a whole host of others, so do your research to cut your tax burden.
“It’s often a case of use it or lose it on tax allowances and reliefs as some can be carried over for a set period and others can’t.”
Britons are advised not to forget interspousal transfers, where a married couple can move savings and investments to whichever spouse is subject to lower tax rates.
Ms Haine explained: “Married couples can transfer assets between one another without triggering a tax event; that’s why they should maximise allowances such as the personal savings allowance, dividend allowance, ISA allowance and capital gains tax allowance to reduce the overall amount of tax exposure for the family.”
Max out ISA allowances to protect savings and investments from tax rule changes
While breaching the personal savings allowance is more of a risk for savers due to current threshold freezes, there are similar challenges for investors.