Tax Refund and Rebate FAQs

We've collected the answers to the most common questions we get here. If your question isn't answered, or if you just prefer to talk to a real person right away, you can give us ring, use the Live Chat here on our site, join us on Facebook or send us a message for help.

  • 1. Turn down the heat

    Walk over to your thermostat and turn it down by one degree. If you can, avoid touching it again. Manage that, and you’ve just saved yourself nearly one hundred and twenty seven pounds for the year!

  • 2. Raid the pantry

    How many times have you put an item on your shopping list, and then realised you already have it? That’s partly why the average UK household wastes around seven hundred pounds’ worth of food per year. So go save some food from landfill, right now! Find the seven items closest to their sell-by and work them into this week’s meal plan. Repeat that process once a week and you’ll save yourself nearly five hundred pounds a year.

  • 3. Grab your calendar

    What’s your quietest day of the week? Circle that date and make it your “no spend day.” Pick free activities you can walk to. Make meals from leftovers. Crack out the board games. There’s loads you can do that costs nothing.

  • 4. Call your gym and break up with them

    Could you live without premium, all-access gym membership? Could you replace spin class with a jog? Could you take a Youtube fitness class? There’s loads you can do to keep fit in the great outdoors and your home. The “gym of life” is all around you, and membership is free forever.

    If you can live without a forty pound per month gym membership, that’s four hundred and eighty pounds back in your pocket for the year.

  • 5. Netflix, Disney+, Amazon Prime - choose one

    You don’t need two streaming services. You definitely don’t need three. So keep your favourite and get rid of the others. Remember, iPlayer, All4, and Freeview are all included in your TV licence fee. Youtube’s also free. And if you’re really old school, there’s always live TV…

  • 6. Put one item you don't use on eBay

    You’ve definitely got one ill-considered purchase sitting in the house that still holds some resale value. Like the guitar that gets picked up once every six months. Or the iRobot Roomba that hasn’t been charged since last year. Get it on eBay, get some cash in your pocket, and reclaim some living space.

  • 7. Check your council tax

    Are you in the right council tax band? Martin Lewis estimates more than four hundred thousand households are in the wrong one. The bands were calculated over 30 years ago. And in some cases, the calculations may have been wrong in the first place. So check your council tax band on a recent bill. It should have a letter next to it, like “Band B.” Letters close to the start of the alphabet are the cheaper bands. So if your home is fairly modest, but your council tax band is F or H, something could be wrong. Get on your local council’s website and find out how to challenge your band. Or get them on the phone - cause that call could be worth thousands! There’s another tax code you’ll need to check that often gets messed up - and it’s on your paycheck! 

    In debt with your council tax? Read our guide for support.

  • 8. Check your paycheck

    Let’s have a look at your last paycheck. What’s the tax code? Is it something like…

    1257 W1

    1257 M1 OR

    1257 X?

    If that’s a “yes”, it looks like you’re on an emergency tax code. Usually, this is a short-term measure - for example, on your first paycheck from a new job. They’re used when your employer, their payroll accountant, or HMRC don’t have your up-to-date information. A really common example is when your P45 hasn’t been received or processed yet.

    But if you’ve been on an emergency code for a while, something may be wrong. It might be that your P45 was never received or processed. If it’s something you forgot to do, get that P45 to your employer, pronto!

    If they already have it, it’s time to start busting chops. Get on to your employer first. They may allow you to speak directly to their accountants, or they may not. If you have no luck there, contact HMRC directly.

    Once HMRC has the correct information, any tax you’ve overpaid will get paid back to you through your salary.

  • 9. Find your water meter, check your bill

    Where’s your water meter? Do you even have one? Are you sure? Water bills get charged in one of two ways; either through a water meter reading; or by averaging the amount of water used in your area. If you don’t have a water meter - and not everyone does - you could be paying for some of your neighbours’ water. The utility company will take an average for the area. But they make some assumptions in those averages - specifically, they may assume a larger house has lots of people living in it. Say you live alone in a three-bed house - in that case, you may be paying for 3 people’s worth of water. So check your bill. If it’s got a meter number on it somewhere, you’re golden. If not, call your utility provider - get a meter installed for free and get yourself a fairer deal.

  • 10. Get a tax refund

    Do you spend your own money on work expenses? For example, do you travel between work sites in your own car, or on public transport? Have you spent your own money on uniforms or courses? Many people don’t realise these expenses are tax exempt. It’s also a common misconception that you can only claim these expenses back if you’re self-employed. So if your employer hasn’t reimbursed you for these costs, you could be due a tax refund. It takes just a couple of minutes to find out what you could be owed.

  • 11. Switch energy providers - or don't

    Death, taxes, rising energy bills. You can definitely count on the first two. And the third is quickly becoming just as certain. Switching your energy provider is often touted as a smart way to lock in favourable terms. So has combining your gas and electricity into a single bill from the same provider. But that’s not always the best course of action. There are the usual hurdles to consider - like exit fees. But market conditions could also mean it’s better to stay where you are. Changing energy caps, in particular, have muddied the water. And many customers have ended up with providers they didn’t choose because theirs went out of business. So by all means, fire up the comparison site and see if there’s a better deal on the table. If there is, make sure it’s a good enough deal to offset any exit costs. And do your research. If there are press stories about your potential new supplier struggling financially, consider staying put.

  • 12. Switch your bank account - or don't

    You’re probably familiar with the unofficial “lazy man tax”. That’s when you get slapped with less favourable terms than new customers for products like insurance. In many cases, it’s been cheaper to shop around for new customer deals than stick with your existing providers - and banks have been no exception. In fact, it’s possible to get slapped with a double whammy on your bank accounts. For example, you may have signed up with a bank who offered a high interest rate on savings accounts. But after a year, those terms end, and you roll onto a much lower rate. It might even be zero percent! And by leaving your money where it is, you may also miss out on incentives for switching banks - like a cash bonus, or attractive introductory rate. However, like with energy bills, times have changed - and switching providers may no longer be the best option. In many cases, it might make more sense to stay where you are. Check your bank’s deals first, then see if any others can beat it.

  • 13. Change your credit card

    Are you paying interest on your credit card bill each month? If the answer is yes, it might be time to look at a balance transfer. If you’re paying a high rate - which can be upwards of twenty percent APR - it could be time to transfer that balance. That’s where you move your existing credit card debt to a new card with a lower promotional interest rate. There’s usually a fee or percentage involved in balance transfers. But it can be worth paying if there’s a long-term saving on interest.

    If you don’t carry a balance on your credit card, you could still consider switching. Many card providers offer 0% interest for two years or more. So, in theory, you could put your household expenses on your new 0% interest card. Put the money you’d normally spend on expenses into a high-interest account - and DO NOT TOUCH IT. Then pay your card off right before the end of your promotional term. You’ll be left with a tidy amount of interest in your savings account! Be warned though - this takes skill, attention, and discipline. You don’t want to accidentally spend the money in your savings account - or miss the end of your promotional period. So approach this idea with caution. Finally, could you get a better deal from a rewards card? This is where you get rewards for spending on your card - like cash-back on purchases or air miles. Make sure the benefits outweigh any fees based on your spending habits.

  • 14. Find your nearest discount supermarket

    Getting Ocado delivered to your door? Get on Google Maps. There’s probably an ALDI, LIDL, or other discount supermarket nearby. Make your next shop a cheap one!

  • 15. Check your online subscriptions, services and products for ''auto-renew''

    It’s that dreaded “lazy man tax” again! Digital subscriptions quite often sneak “auto-renew” features into their product. This can happen even when you think you’re paying a one-time fee - it can actually be a covert annual subscription that auto-renews. Adobe Photoshop, take a bow! So log in to any digital product or service you’ve signed up for recently and check you don’t have “auto-renew” turned on. It’s especially important if there are sneaky annual increases built into your terms and conditions. So go hunt down that auto-renew button and turn it off! Just make a note of the date the service will end. You can always switch it back on if you’re enjoying the subscription come renewal time. 

  • The good, old-fashioned penny jar

    It’s a classic for a reason. A simple penny jar is great for giving you a real-time, real-world sense of what you’re saving. Plonk your jar on a shelf or window sill, somewhere you’ll see it every day, and physically put your saved pennies into it. You won’t get too deep into the year before you have to get yourself a bigger jar, which is a great feeling in itself if you’d always felt like you couldn’t save money at all.

    One thing to watch out for is the “cash-out tax” you might find yourself getting kicked with when you take your jar(s) to the bank at the end of the challenge. You could choose to carefully bag up all the loose coins yourself to deposit them, which is a bit of a chore but does keep your savings intact. On the other hand, dumping them into a bank’s coin-sorting machine is a lot simpler – but will typically cost you about 10% off the top for the convenience. With the kind of cash we’re talking about, that’s a big chunk of change to lose.

  • Doing it digitally

    Obviously, the cash method won’t work for everyone. We don’t all deal in coins as much these days, particularly since COVID-19 reared its ugly head. Instead, you can use your online banking app or website to transfer the savings into a separate account. Depending on your bank’s rules and systems, you might have to do this monthly rather than daily. That’s slightly against the spirit of the challenge, of course, but stick to the plan and don’t skip your transfer dates either way.
    Another way to go is to split up your yearly savings total into 12 payments and get them transferred automatically to your savings account. Rounding up, this would mean stashing away £55.67 per month throughout the year.

  • What's the 1p money saving challenge?

    Saving money isn’t always easy. When we talk about things like following the 50/30/20 rule, what we’re really trying to do is build up a healthier relationship with our cash. It’s all about developing simple habits that lead to serious benefits over time – and that’s usually worth a lot more than socking away a lump of cash every now and then.

    For a quick guide to the 50/30/20 rule, take a look at our article, “What You Should Be Saving According to Your Salary”. For right now, though, let’s talk about how even the smallest baby-steps toward better saving habits matter. The 1p money saving challenge is a great example of this, and it’s something you can start as soon as the year ticks over.

    Here’s the whole idea in a nutshell. Every day of the year, starting from the 1st of January, you’re going to save just one penny more than you did the day before. So, on the 1st of January you set aside a single penny. It doesn’t matter if it came out of your pocket or you picked it up off the street. Just put it away somewhere and mark your calendar to show that you did it.

    When the 2nd of January rolls around, you save 2p – that’s on top of the 1p you saved yesterday, so you’ve got 3p saved already. On the 3rd, you save 3p (for a total of 6p stashed away). After that you just keep on going to the end of the year. See? We told you it wasn’t going to be complicated.

    So right now, you’re probably thinking that these amounts really don’t seem like they’d be worth saving. After all, even on the final day of the year you’ll only be putting away a grand total of £3.65, right? The funny thing is, even though the challenge is incredibly easy to complete, that doesn’t mean it’s not worth trying. In fact, following the challenge for an entire year actually nets you a grand total of £667.95 (or £671.61 if it’s a leap year)!

  • What if I didn't start right at the beginning of the year?

    The beauty of the 1p money saving challenge is that it really doesn’t matter when you start. The savings will be mounting up from the first day, and you can keep going well past the end of the year to keep your momentum.

    If you’ve missed the suggested kick-off date of the 1st of January and want to catch up rather than working from scratch, no problem! Just work out what you would have saved if you had started on the 1st and sock that amount away immediately. So, if your actual start date was, say, the 24th of January, you’d just add up all the previous totals to get £3 and start by saving that. Then, the next day, you’d just add 25p to that total and work from there.

  • The 1p saving challenge

    You can read up on this in our article “The 1p Money Saving Challenge”, but it’s basically just a very low-hassle trick to help you save an extra £667.95 per year. You can take the challenge with nothing more than a jar or piggy bank, or do it digitally if that’s easier. Either way, it’s as simple as saving a penny one day, then 2p the next and so on. It doesn’t sound like it’d amount to much, but over a year it’s an impressive way to save.

     

    More money saving challenges

  • Give yourself a 24-hour rule

    Making money decisions in a hurry is often a bad move, but we’re getting pressure piled on us all the time to do just that. “Unmissable” deals with limited-time offers and “FOMO” sales techniques are designed to short-circuit your brain into emptying your pockets. Before you know it, there’s a courier at your door and you’ve already forgotten what you ordered.

    Here’s an easy trick that’ll cost you nothing and could save you plenty: just give it a day and decide tomorrow.

    The 24-hour rule is one of Lloyd’s Bank’s top savings tips for the same reason it’s one of ours: it works. Set yourself a 24 hour no-spend rule on non-essential purchases – particularly online ones. Instead of hitting the “add to cart” button, just bookmark the page and click yourself away somewhere else. The next day, come back to your bookmark and ask yourself if it still looks like it’s worth the money. If it does, at least you put some thought into it. If it doesn’t, you’ve saved some cash.

  • Crunch your credit

    Spending money is the easiest thing in the world and it seems even easier when it isn’t yours to begin with. As good as credit cards seem in the short term, failing to pay back your credit can gradually put you and your money in a very bad place. It’s vital that any purchases made on these cards is paid back pronto to prevent their high interest rates racking up debt. The money you’re using just to pay back the interest is cash that could otherwise be in a savings account. This is why crunching your credit is widely seen as the number one priority.

    If you find yourself with large amounts of credit card debt, fear not, there are ways to unshackle yourself from this money merry-go-round. You can do this with the help of a balance-transfer credit card. It may seem strange to use another form of credit to pay off another but hear us out. By using one of these you can transfer your existing debt into new credit that reduces the impact of the initial interest.

    Each balance-transfer card has different conditions but the majority offer a set promotional period to pay back the money without interest. When it comes to finding a balance-transfer card you must make sure you give yourself enough time to pay it back. Otherwise, you could find yourself in the same position as before. If you make this first step into cleaning out your credit, you’ll be in a much better mindset to kickstart your saving journey.

  • Set up a standing order

    This tip is more about setting good saving discipline than actually finding money. All you need to do is set up a standing order so that money goes into your savings account each month. Be careful not to stretch yourself too thin as this trick works best when you don’t even notice it leaving your account. If you find yourself constantly pulling money back out of your savings, try dropping the amount until it’s at a consistent level.

    Once you’ve hit this point you can continue living your life as usual but, this time, with a steady stream of savings totting up in the background. If you end up catching the saving bug and love this method you can take it one step further. The rise of online banks such as Monzo have grown in popularity over the past decade because of their dedicated saving tools. If you don’t mind switching, some let you segment your income into different pots for different purposes. Whether you’re saving for a holiday or a new car, this is handy for those who might lack discipline with their spending.

  • Streamline your subscriptions

    Spotify, Apple Music, Netflix, Amazon Prime and even Disney+. These streaming platforms have become a media mainstay in recent years with 60% of Brits now signed up to at least one service. In isolation, low costs of £9.99 for an almost endless library of content seems like a good deal when compared to satellite TV packages. However, if you’re subscribed to multiple platforms that serve the same purpose, your monthly costs could start to climb. Knocking just one additional platform from your bills can see you save upwards of £120 a year in some cases.

    For those who literally cannot live without all of their subscriptions, it may be worth looking into sharing an account with a friend or family member. With the exception of Disney+, most of the major platforms offer some sort of discount for a shared subscription. This allows you to keep your own profiles and preferences whilst saving yourself a few quid each month.

  • Swap to SIM-only

    With phone prices skyrocketing in excess of £1,000 it’s no wonder that more people are holding onto their phones for longer. Many top of the range handset contracts can easily cost you £80+ a month. The problem is that these contracts are split into two segments - device and usage. Network providers often use a standard usage tariff which means that you can get the same amount of texts, minutes and data for much cheaper if you were to switch to a SIM-only.

    In general, it’s usually cheaper to buy a product outright. Unless you plan on shooting slow-motion motion video in ultra-HD, the chances are you can get by with an older model at a fraction of the price. If you want to save even more, many manufacturers and sites sell refurbished versions of even the latest models. If you’re a bit sceptical about refurbs, most actually come with a warranty in the unlikely case that something should go wrong.

  • Switch providers

    Switching providers can be one of the quickest and most effective ways to save money each month. Whether you’re shopping around for car insurance, broadband or energy, you can input your details in a matter of minutes and see exactly what you could be paying. More times than not there’s a substantial difference between the most expensive and cheapest deals on the internet. Making this part of your routine every time your contract is up for renewal will ensure that you’re never overpaying for your services.

  • Prep your meals

    In the UK alone, Cheaper Waste found that 6.7 million tonnes of food is wasted every year at a cost of £250-£400 per household. Prepping meals on a weekly basis is a win/win if you can get yourself organised. On one hand, by setting one day a week to prepare your weekly meals, you can reduce the likelihood of ordering take-away on the days that you don’t have the energy to cook. Simply put your prepped meal in the oven and it can be ready quicker than the delivery driver can get to your door. Food prep can also reduce your monthly shopping total as it prevents your food from going out of date, making sure you get your money’s worth from every ingredient that otherwise may end up in the bin!

  • Make the most out of tax credits and allowances

    There are loads of tax reliefs and benefits that you may not know about but could be saving you money. For example with the Marriage Allowance, you can claim if you earn more than your husband, wife or civil partner and they do not pay income tax or pay the basic income tax rate. By transferring a maximum of £1,260 of your personal allowance to your partner, you can reduce their tax by up to £252.

    If you have children, you can benefit from Tax-Free childcare if your child is under the age of 11. You must earn at least the National Living Wage for 16 hours a week on average to be eligible, this must also apply to your partner if you have one. You can receive up to £2,000 a year for each child or £4,000 if they are disabled.

  • Be heating bill savvy

    If you haven’t already seen our 7 Simple Heating Bill Hacks, we break down the easiest ways to reduce your energy bill each month. Some of the easiest methods include turning down your thermostat by 1 degree, prioritising heating in the rooms that you use and making sure you block out any drafts to prevent heat from escaping. With energy bills currently through the roof, just picking one of these tips can help knock a chunk off your heating bill and free up some money to put elsewhere each month.

    Heating bill hacks

  • More money each month

    With all things considered, saving even just a little bit of money can go a long way. Starting off is always the hardest part and breaking the paycheque to paycheque cycle isn’t easy. Even if you just become slightly more aware of your spending, you can start to pick apart your outgoings and prioritise what means the most to you in your life. After all, life is for living and if you can put more money into just that, we see it as a job well done.

  • Stamp duty for additional homes

    If you already own a residential property, you’ll be hit a little harder with your SDLT charge, to the tune of an extra 3% on top. That means second homes, holiday homes and buy-to-let properties will all land you with extra Stamp Duty to pay. If you’re living in Scotland or Wales, that extra charge bumps up to 4% instead.

    The timing can be pretty important here. If your main residence is already sold by the time you buy a new one to replace it, you won’t get lumped with the extra SDLT charge. If you still haven’t sold your main home by the time you complete the purchase of your new one, though, you’ll technically own both properties at the same time. That means the extra 3% (or 4% in Scotland or Wales) will apply. However, there’s a wrinkle in the rules that could still save you money. If you manage to sell your old place within 36 months after buying your new one, you can claim a refund of the 3% charge you had to pay. There are a few other situations that can earn you that same refund, but they’re few and far between.

    Another key question is whether or not you count as a UK resident for tax purposes. This can sometimes get tricky, but a lot depends on how much time you spend in the UK. If you’re abroad for at least 183 days of the 12 months before you buy a property, you won’t count as a UK resident for SDLT. In that case, you’ll generally be charged a 2% surcharge when you buy a residential property in England of Northern Ireland.

  • Never be afraid to ask for help

    There are more resources out there to help with both money and mental problems than most people realise. They don’t all involve waiting on phone helplines or sitting through benefits assessments, either. In fact, some of the most effective resources could already be right on your doorstep.

    The first step you take is always the most important, so reaching out to family or close friends can set you on the right path from the start. From there, once you’ve broken the silence and opened up the conversation, you could start looking a little further – like talking to your GP or a support worker. The most important thing to understand is that you’re not alone in this. For instance, there are peer support networks online where people share their experiences and the solutions they’ve found or tried. If your mental health load is becoming too much to carry, there are experts at the Samaritans (call 116 123) who can offer confidential support with no judgement or strings attached.

    Read our guide on tax debt & mental health

  • Your personal allowance after tax

    Even though the table contains the tax rates for each income, it leaves out two crucial points for those earning over £100k in a year. For every £1 that you earn above this amount, your personal allowance will reduce by £2 until it’s gone. Once you hit the £125,140 mark your allowance will automatically be set to £0 meaning that you’ll have to pay tax on everything you earn.

    In real terms, anyone caught between £100k and £120k can actually be paying a whopping 60% in tax. You may earn £100k a year but with a bonus of £1,000 your total income is taken to £101k. That additional £1,000 will not only be taxed at 40% but will also knock £500 off your tax free personal allowance. This removal of £500 from tax will be charged at another 40%, leaving you with a meagre £400 from your £1000 bonus.

    As you can see, even if you think you’ve got breathing space before hitting this threshold, it’s best to check if you’re inline for any big bonuses or commission before the end of the tax year. Many people don’t notice until they receive their tax slip and it’s too late to act.

  • East Midlands

    East Midlands - Areas where the number of pubs has declined since July 2020
    East Midlands - Areas where the number of pubs has declined since July 2020

     

  • London

    London - Areas where the number of pubs has declined since July 2020
    London - Areas where the number of pubs has declined since July 2020
  • East of England

    East of England - Areas where the number of pubs has declined since July 2020
    East of England - Areas where the number of pubs has declined since July 2020
  • North East

    North East - Areas where the number of pubs has declined since July 2020
    North East - Areas where the number of pubs has declined since July 2020
  • North West

    North West - Areas where the number of pubs has declined since July 2020
    North West - Areas where the number of pubs has declined since July 2020
  • South East

    South East - Areas where the number of pubs has declined since July 2020
    South East - Areas where the number of pubs has declined since July 2020
  • South West

    South West - Areas where the number of pubs has declined since July 2020
    South West - Areas where the number of pubs has declined since July 2020
  • West Midlands

    West Midlands - Areas where the number of pubs has declined since July 2020
    West Midlands - Areas where the number of pubs has declined since July 2020
  • Yorkshire and The Humber

    Yorkshire and The Humber- Areas where the number of pubs has declined since July 2020
    Yorkshire and The Humber- Areas where the number of pubs has declined since July 2020
  • Scotland

    Scotland - Areas where the number of pubs has declined since July 2020
    Scotland - Areas where the number of pubs has declined since July 2020

     

  • Wales

    Wales - Areas where the number of pubs has declined since July 2020
    Wales - Areas where the number of pubs has declined since July 2020
  • Alternatives to paying 60% tax

    Although there is no way of avoiding this 60% tax for £100k-£120k earners, there are ways to manage your income so that you can still make some changes to become more tax efficient. Pensions, workplace benefits, and charitable donations are all great ways to help you reduce your earnings to below £100k and prevent any reduction in personal allowance.

    One route you could take is to use your pension contributions to take you under the £100k barrier. You’d essentially be sending some of the money that would’ve been heavily taxed to your retirement pot. Although you’d be taking home less money each month, you’d still be more wealthy overall because of the break in tax and the hefty pension waiting for you. It’s worth noting that you can only deposit a maximum of £40,000 a year.

    Now if a pay rise is on the cards, you may want to check out what benefits your company offers as a trade off. Things like company cars and private healthcare can often make your life more comfortable without having to jump over the £100k barrier. These are usually given through a “salary sacrifice” scheme so it’s definitely worth asking about if you’re in line for an annual review.

  • ...and the rest

    The exact Self Assessment forms you need to file will vary with your personal and financial situation. We’ve already covered most of the major ones, but here are a few more examples that might apply to you:

    • SA102M: ministers of religion.
    • SA102MP: Parliament.
    • SA102MLA: Northern Ireland Legislative Assembly.
    • SA102MSP: Scottish parliament.
    • SA102WAM: The National Assembly for Wales.
    • SA103L: Lloyd’s underwriters.
    • SA107: Trusts, etc.
    • SA110: tax calculation summary.
  • Annuities

    If you’ve got a purchased life annuity, you’ll usually be taxed on it at the normal rate. If your income is below your tax-free Personal Allowance, you’ll be able to claim that tax back. Alternatively, you could ask for your annuity to be paid out without tax taken off.

    To claim back the tax you’re owed, you’ll need a form R40 for every year you’ve overpaid. As always, there’s a hard limit of 4-years to get back what you’re owed.

    If you want your annuity paid tax-free instead, you’ll send form R89 to your provider, or form R86 for joint annuities. Either way, keep in mind that you’ll have to alert the provider if your income ever goes up. If you start bringing in more than your Personal Allowance, you’ll owe some tax on it.

    For pension annuities, you should get a P800 letter from HMRC if you’re owed any tax back. If you don’t get one and think you’re owed money, talk to HMRC.

  • I receive Get You Home Travel (GYH) and/or Home to Duty Travel (HDT) expenses. Can I still claim?

    Most likely, yes. The amounts you receive don’t normally cover everything you’re entitled to.

    It is important to know that we deduct HDT or GYH allowances from any claim we make as both are paid non-taxed.

    Use our Tax Refund Calculator to find out if you are owed anything from HMRC

  • I live in married quarters, can I claim?

    If you live in married quarters, on or off base, and spend your leave periods there, it would normally be classed as your main residence. The claim in this case would be for any costs for travel between your married quarters and any temporary postings of up to 24 months.

    If you already receive a Home to Duty (HDT) allowance for this already, we will review the amounts received against the allowable limits and claim for any shortfall.

    Use our Tax Calculator to see if you are owed a refund from HMRC.

  • I live on base, can I claim?

    If you live on base part of the time but go home to another address for weekends or longer periods of leave, the leave address would be classed as your main residence.

    A tax refund claim in this case would be for travel between your home address and your workplace.

    If you already receive a Get You Home Travel (GYH) allowance for this, we will review the amounts received against the allowable limits and claim for any shortfall.

    Use our Tax Calculator to find out if you are due a refund.

  • Do I need to keep my assignment orders?

    Yes this is very important as we need to have documentary evidence to support your claim.

    Please ensure you keep a copy of each of your Assignment Orders for each base that you have traveled to. You can print these from JPA but please note these are deleted after 60 days.

    See our checklist of the documents you will need to make a claim. We can help you get copies of anything you are missing if needed.

  • Can I claim a tax refund for any travel costs incurred whilst I was training?

    It will depend on the type of training.

    HMRC has strict rules about what is classed as an allowable expense around training. If it was an essential part of your contractual duties of employment then we might be able to claim for the traveling expense.

    You will need to have completed your phase one training to make a claim.

    Even if you not due a refund this year remember that you can claim for the past 4 tax years so use our tax calculator to find out if you are owed anything.

  • Can Reservists and Territorial Army personnel claim?

    To get a tax refund, HMRC says you need to be travelling to temporary workplaces. Reservists and Territorial Army personnel tend to spend most of their service in one place, which wouldn't qualify and is an example of when you wouldn't be able to claim an MOD tax refund.

    That said, your circumstances might be different from most. Get in touch if you want us to look into it for you. It costs you nothing to find out where you stand.

    Use our tax calculator to see if you are due a refund

    Find out if you need to complete a Self Assessment Tax Return or if you can claim Flat Rate Expenses.

  • Will the MOD allow me to claim a tax refund on Home to Duty Mileage?

    Yes. You are legally entitled to reclaim 24p per mile, which is the difference between the HMRC allowed rate of £0.45 per mile* and the MOD £0.21 per mile tax exempt allowance. To claim this, you must be on temporary duty. This is defined by the relevant HMRC legislation, not by MOD policy.

     

    Ask RIFT about your specific circumstances if you are still unclear.

    *HMRC EIM32080 Travel expenses: travel for necessary attendance: temporary workplace: limited duration, the 24 month rule.

    Read the letter from the MOD about supporting tax refund claims.

  • Some people in the Armed Forces have said that we are not allowed to make a claim. Is that true?

    Despite what some people are saying, MOD personnel really can get UK tax refunds. RIFT Refunds always knew this was true and we fought hard to get the proof. You can read the MOD letter to us and feel assured that this is something that can be legitimately claimed for.

    Tax refunds for travel can be claimed, as confirmed in DIN ‘2015DIN01-005’ which has been issued to all service personnel to officially confirm this.

    There has been a lot of confusion around tax refunds that RIFT has worked hard to clear up with both the MOD and HMRC.

    Different interpretations of what is meant by ‘a temporary posting’ have caused this confusion. Some believed that individuals who claimed a tax refund on HDT were doing so in breach of HMRC rules. RIFT can categorically confirm that none of these potential situations can arise and this is confirmed by the MOD.

    Some also thought that making any claim for a tax refund may mean the individual may have to repay rebated money in the future. Others also thought claiming a refund would jeopardise the whole tax exemption of the MOD HDT allowance, disadvantaging many service personnel.

    Others were worried about changes to tax codes. Your tax code should not change due to a refund claim but any problems with your tax code are covered in our aftercare service which means we will get any errors fixed for you at no extra charge. Read more about tax codes and how to check if yours is correct.

  • What does the MOD say about what we can claim for?

    DIN ‘2015DIN01-005’ has been issued to all service personnel to officially confirm that tax refunds for travel are claimable.

    It also states that you can use an agent to make a claim for you. RIFT will act as your agent, providing an end to end service if you don’t have the time or are not comfortable dealing with the technical legislation set out by HMRC.

    This supports the previous formal confirmation we received from the Ministry of Defence.

  • I'm in the Armed Forces and posted overseas. Can I claim a UK tax refund?

    Just like anyone else, you're entitled to a UK tax refund for travel expenses to and from temporary workplaces. If you're making your own way from a UK residence, you could have a pretty big refund on your hands. Watch out, though - if your family has moved abroad with you, then your main residence might be outside the UK. In that case, you can't claim for your travel costs.

    Find out everything you need to know about paying UK tax if you work overseas or get in touch.

  • I live with my partner/parents, can I claim?

    Yes, if this is classed as your main residence.

    The legislation for tax refund claims is based on costs for travel expenses on to temporary postings of under 24 months, even outside the UK, using either your own vehicle or public transport counts.

    If you're in the Armed Forces and making your own way to more than one base, you can claim any overpaid tax on the cost of that travel for the last 4 years, and the RIFT average 4 year rebate is £2,500.

    HMRC takes a big enough bite out of your pay already. Don't let them hold onto cash that's supposed to be in your pocket. Use our tax calculator to find out if you are owed anything back.





  • Can I claim for washing my uniform?

    No, laundry costs are included in your annual personal allowance (i.e. the amount you can earn tax-free each year). This will be recorded in your tax code.

     

  • Can I claim for Mess Dress?

    You may be able to claim if you have the receipt and it is in the last four tax years as it is a work related expense.

    Use our tax calculator to find out if you are due a refund.

  • Do I need receipts for flights?

    Yes, the cost of flying varies considerably so we need evidence of your actual expenses for HMRC. We can only claim for the actual flights you made, not the cost of any flights between two destinations.

    Have a look at our checklist of the documents or paperwork we'll need for your claim.

  • What if I haven’t got all my wage slips?

    You can download all your wage slips from the JPAC website.

  • Can I claim if I have been at my base for more than 24 months?

    Under HMRC legislation a posting that is more than 24 months is deemed permanent and therefore the temporary workplace rules don’t apply. However, we would review every case in isolation as we would need to understand your expectation at the outset of your posting.

    As you can claim for the previous 4 years even if you have been at your current base for over 24 months you may be able to claim for previous postings.

    Use our Tax Calculator to work out if you are due a refund.

  • What information do I need to provide you with?

    We need the following information to assess your MOD tax refund and then hopefully process your claim:

    • List of bases you’ve attended - Copies of assignment orders are helpful here and are available from JPA, but be aware they are deleted after 60 days. Included in this list you should also include any time spent on courses as this can be claimed for as well
    • Monthly payslips – If you haven’t got all of your payslips, you can download them from the JPAC website
    • Other supporting documents – If you can, MOT certificates, P60s and P45s can also help your claim. Don’t worry if you can’t provide these though, we can still reclaim your tax without them

    See our full document checklist and what to do if you are missing anything.

    Other information – We’ll ask you a few simple questions about your financial circumstances e.g. if you have any other sources of income such as rental income, whether you have a student loan or a private pension that may affect your claim, your tax code or mean that you need to submit a self assessment tax return.

    The MOD accommodation rules may also have an impact so we will need to understand your living arrangements. This helps us calculate the value of tax you’ve overpaid.

    Use our Tax Calculator to find out if you are due money back.

  • I'm in the Armed Forces. Does the uniform tax rebate apply to me?

    Armed Forces uniform tax rebates are handled differently from most other professions. Generally speaking, your uniform maintenance costs are handled through your tax code. Basically, your tax-free Personal Allowance gets ratcheted up a few notches to make up for what you're shelling out.

  • Who needs to do a self-assessment tax return?

    Review our checklist below to see if you need to do a tax return. If you answer yes to any of the following, you’re on the hook for self-assessment…

    • Are a partner in a business partnership.
    • Earn money that isn’t taxed through PAYE—like rent, for instance.
    • Get a commission from your job—or even tips!
    • Get income from savings, investments or dividends.
    • Have money coming in from abroad.
    • Are claiming a tax refund and have over £2,500 of expenses to claim for.
    • Are a company director, religious minister or the executor of an estate.
    • Are getting Child Benefit and have an income of over £50,000.
    • Have Capital Gains to report. You can read more about these here.

    If you’re not sure – just ask.

    You can find out more about Self-Assessment, how to do it and the forms you need to fill in here.

    One more thing! If you’re a RIFT Refunds customer, we do your tax return – FOR FREE. It’s all part of the service. 

  • What do you need to do a Self-Assessment Tax Return?

    Your return will be different to anyone else’s, because of your earnings and the kind of work you do. But, in general terms, the kind of information you’ll need to supply should include:

    • Your National Insurance number
    • Your UTR number - this is issued by HMRC
    • Accounts, invoices, receipts or other records of income
    • Records of relevant expenses
    • Contributions to pensions or charities
    • P60 and/or P45 forms

    If you’re a landlord, you may also need things like tenancy agreements, for example.

  • How to do a Self-Assessment Tax Return

    You can find out more about Self-Assessment, how to do it and the forms you need to fill in here.

    You can do your self-assessment online, which makes the process a little easier, but if you’re not an accountant, some of the terminology can still be hard to understand. You’ll also still need to have all of your paperwork, invoices, receipts and expenses in order. Knowing what you can and can’t claim for is key to making sure you pay the right amount of tax.

    Most people fill out the SA100 form and there is guidance if you’re doing it online. A lot of guidance – read the notes carefully! And be warned – it can get even complicated if you have to fill out supplementary sections.

    Some people qualify to complete the SA200 form. This is only four pages and is for those with a turnover of less than £85,000. This can include employed, self-employed and retired people. HMRC will decide if it’s suitable for you.

  • What if you’ve got no time?

    There’s nothing worse than submitting a last-minute tax return and having to sit up into the wee small hours to do it. That’s head banging stuff. 

    Especially if you’re not sure what you’re doing, when it’s not your area of expertise it can be hugely overwhelming. Paying an expert means you can concentrate on the day job and just bring home the bacon!

    Of course, if you’re prepared to take the time, do a good bit of reading and know your paperwork’s in order, you can save an Accountant’s fee.

    We do tax returns and again, if we’re doing your refund, we’ll do your tax return as part of the deal. That’s pretty big stuff!

  • What to do when you want extra peace of mind?

    Getting a specialist to do your tax return and refund means a load off. Any high street accountant will be expert at filling in tax returns. They may also offer you a guarantee that they’ll look after and take care of any queries, though this may be an extra cost.

    As part of our Tax Refunds Service, we can complete your return AND we offer a full year’s aftercare.

    If HMRC query your refund, we’ll take care of it.

  • What if you’re not up to speed on the detail?

    If you’re the kind of person who isn’t great with paperwork, it’s likely you need help. A good personal tax consultant (like the one RIFT customers get) will go through everything you need to provide and advise if you need to complete supplementary sections.

    This is especially important if you don’t know what counts as work expenses, as these are the things that will help to get your tax bill down - and perhaps even qualify you for a refund.

  • What if you’re in a hurry?

    Processing a tax return is almost instantaneous – for the taxman! HMRC calculates how much you owe almost straight away. Claiming a tax refund can take a little longer.

    In any case, if you’re claiming more than £2,500 in expenses, you need to register for self-assessment which then has to be done every year. It just isn’t possible to do it all on one form. 

    Our specialist software is linked to HMRC systems and we also have a direct line that our agents use to get a faster response.

    HMRC have a tool here that you can use to find out when you can expect a reply from them. 

  • What's the benefit of using RIFT for your self-assessment tax return?

    There are a few! Our specialist subject is tax refunds, but that also means we know a thing or two about tax returns. The two go hand in hand!

    If we’re doing your tax refund, you’ll also get:

    • A Personal Tax Assistant
    • All paperwork completed by us
    • Your tax return done if needed
    • Year-round advice
    • Unique tax code checker – we’ll keep you right
    • Paid by cheque or bank transfer – your choice
    • Your refund guaranteed
    • RIFT Agent HMRC Hotline = faster claims
    • RIFT App to track your claim in real time
    • 6 day-a-week telephone support
    • Live chat, email and social support
    • Excellent Customer Service
  • Why aren't tax refunds automatic?

    The Pay As You Earn (PAYE) system generally isn't bad at working out the tax most people owe. However, it's only as good as the information it's working with. When it's contending with expenses like travel to temporary workplaces, the system tends to trip itself up because HMRC won't automatically have the necessary information to get its calculations right.

    Of course, work expenses have a nasty habit of changing year on year. Unless you prove otherwise, HMRC often has no choice but to change your tax code to account for what it thinks you owe. This can lead to severe headaches when your costs change, since your tax code won't be keeping up with your expenses. That's why you’re better off making full yearly refund claims and watching your tax code carefully.

    Check your tax code

     

     

  • Break a few habits

    It’s easy to get set in your ways, particularly with things you rarely even think about. You already know what temperature you like your home to be, so you reach for the thermostat, set it and forget it. The thing is, if you’ve got all your radiators on full, you’re blowing through a lot of energy just to heat the rooms you’re hardly using. Consider turning a few of your radiator valves down – or even just shutting doors so you’re not spending needless money heating empty rooms.

    While you’re at it, think about nudging your main thermostat down by just 1 degree. The chances are you won’t even notice the difference – at least until your energy bills arrive. Running your home 1 degree cooler could be worth an average of £55 a year off your energy budget.

    Here's a few more bad habits to try break:

    • Stop leaving your household appliances on standby all day and night. Boom – you just saved yourself £35 a year with zero effort!
    • Stop running your dishwasher half-empty. Even if you end up only dropping the number of times you use the thing by 1 cycle per week, you just saved another £8 a year off your energy bills.
    • Do the same thing with your washing machine. Always make sure it’s properly loaded before you set it off. Again, you’re saving another £8 per year just by running your washing machine once a week less.
    • There really is no need to keep filling the kettle up to the maximum capacity line every time you boil it. All you’re doing is wasting energy. Only heat the amount of water you need for the job at hand. That alone will probably save you £6 a year. Just imagine what you’ll save by using the same trick when you run your bath.
    • If there’s no one in the room, there’s no need to leave the lights on. Simply remembering to flip the switch when a room’s not in use can mean an extra £11 in saved cash over a year.
  • Bank credit

    Bank credit is similar to consumer credit in a lot of ways. The bank offers the chance to pay back what you owe in stages, with terms depending on your financial position. The bank will look at things like your statements and the value of any assets you own, which are often used as ‘security’ in the agreement.

    As for what you actually get with a bank credit deal, we’re talking about anything from a mortgage or housing loan to a cash credit facility. Letters of credit (where a bank backs your payment to a seller), bank guarantees and discounted bills of exchange (where a bank basically buys a debt at a discounted rate) are also broadly lumped under the bank credit category.

     

  • Dump the disposable batteries (not just in the bin)

    There’s a fair bit of confusion about whether or not rechargeable batteries actually save you money. For one thing, you’re going to use a fair amount of electricity charging them up back, rather than swapping them out for a fresh set of regular batteries. What it comes down to is whether the price of those new conventional cells ends up higher than powering up a set of rechargeables. The bottom line there is, if you pick the right battery brand, you’re better off recharging.

    Rechargeable batteries last a lot longer than conventional ones. Good quality rechargeables can handle 200 or more charges, so you’d potentially have to replace normal ones hundreds of times to match up. Yes, you’re using electricity to top up your flat batteries, costing you some money. However, you stand to save a lot more by not having to buy a new single-use battery every time one goes flat.

    Of course, money isn’t the only thing that disposable batteries waste. A battery is a difficult thing to get rid of safely. Doing it right means taking them to a household waste recycling centre, or a shop that’s set up to collect them. Switching to high-quality rechargeable batteries isn’t just a money saver; it’s also a good way to bring down your carbon footprint and waste output.

  • Do you get a P45 if you've been sacked?

    Yes, no matter why you're leaving your job, you should get a P45.

  • Beginner level

    Let’s start with your simple, beginner-level options for making money from home. They won’t get you rich quick, but they also don’t need any special skills.

    • Errands

    Pick up people’s dry cleaning, mow their lawn. These kinds of odd jobs have been around for ages. But it’s now a digital marketplace - sites like TaskRabbit connect people who need odd jobs doing, with the people who are happy to do them. Some of this will require leaving the house - like picking up dry cleaning. But equally, it could be helping people with digital tasks - like helping write emails or making them a spreadsheet. So go check it out!

    • Paid surveys

    We’re not talking about life-changing money here but some companies will reward you for filling out surveys. It is that simple - give your opinion, get paid! You won’t even need a laptop for this one - you can easily do it on your phone.

    • Pet sitting

    Some people want their pets looked after in their own homes. But others will be happy to drop them at your place. There are a few well-known companies who’ll let you sign up online and then connect you digitally with pet owners - so get Googling!

    • Sell your stuff on eBay

    If you’re just looking for some short-term funds, auction sites are a great place to start. Getting some unused items up for auction will also help you declutter your life, as well as giving you a short-term cash injection.

    Selling on ebay? Watch out for the taxman

  • Being self-employed as a second job

    A lot of people like the idea of being their own boss, but don’t want to risk being self-employed as their only source of income. That’s how a lot of small businesses get their start, as second jobs for people who wok on the books elsewhere. This can be a great idea if you’re cut out for it, but you do need to keep your tax situation under control.

    When you’re self-employed, even as a second job, you’ll need to get cosy with the taxman. That means registering yourself with HMRC as self-employed, getting set up for the Self Assessment system and filing yearly tax returns to report all your earnings, expenses and other key details.

    Self Assessment comes with some specific dates and deadlines to hit, the most important of which is the 31st of January. Every year, this will be your deadline for filing your tax return paperwork, along with paying up what you owe.

    Guide to UK Tax Returns

    The other thing to know before setting yourself up as self-employed is that your National Insurance Contributions (NICs) wont’ magically take care of themselves any more either. You’ll have to pay what you owe for these when you settle up with the taxman each year.

    The basic paperwork for your self-employed job will be a little different from your on-the-books work, too. You won’t have a regular payslip sent to you, for one thing. That means you’ll have to keep a tight set of records covering all the money flowing into and out of your business. Self Assessment tax returns are a huge topic in themselves, so make sure you have a good understanding of what’s involved before diving in.

    So, are you an on-the-books employee with a self-employed side gig or a small business owner who moonlights PAYE for someone else? Generally, it’s probably best to class your “main job” as the one that brings in the most money. Either way, you’ll be paying a year in arrears for your self-employed work. That means, for example, that the profits your self-employed business made in 2021/22 will factor into the eventual tax bill you’ll pay up by the 31st of January 2023. This is something that trips up a lot of people when they’re new to Self Assessment. Instead of the tax trickling out of your pay each month through the PAYE system, your self-employment tax for the entire year will all fall due in a big lump. Tax years run from the 6th of April to the 5th of the following April, though, so you’ll know 9 months ahead what you’ll have to cough up.

    Important financial dates & deadlines

  • Benefits of using the right expert

    One of the most important things a good adviser will do is make sure you’re not paying more tax than you need to. The right kind of specialist will protect your money by helping you make the most of all the tax relief and deductions you’re entitled to. At the same time, they’ll protect you by making sure you’re keeping within the various tax rules.

    Another thing a specialist adviser can offer is the reassurance of getting your tax paperwork handled accurately. Getting caught in the spotlight of an HMRC investigation is bad news, and can lead to fines and penalties – or even a criminal record! A good specialist will help you keep your tax documents spotless, even when dealing with the most complicated areas of the rules like reporting multiple sources of income.

    Beyond that, a specialist tax consultant will make planning out your finances a lot easier and safer. Tax planning is an ongoing process throughout the year, and some of the biggest decisions need to be made well in advance. A tax consultant who understands your situation will help you scout out the financial road ahead for opportunities and obstacles alike.

    Finally, talking to a tax adviser is a great way to save time and boost your peace of mind. Taking care of your taxes can be stressful and time-consuming. Just knowing your money’s in good hands can free you up to focus your attention on the things that really matter to you.

  • What is BNPL?

    Buy Now, Pay Later is a popular way to spread the cost of an everyday purchase. It’s become a popular way to finance small-ish purchases for a short period of time – over a couple of months, for example.

    You can choose to pay with BNPL at the checkout, paying the first instalment and then spreading the others over the next few months, depending on the terms the BNPL company offers.

    BNPL is usually operated by a finance company on behalf of a retailer. Popular BNPL brands include Klarna or ClearPay. PayPal also has a BNPL product.   

    BNPL can be really useful if you’re making an unplanned or emergency purchase that you just don’t have all the funds for. It’s also a good way to spread the cost of a larger planned purchase.

    Where you might get into trouble with BNPL is seeing it as a way to buy things on impulse that you don’t need or you can’t afford. Like that pair of smart trainers that have been calling your name but you already have five pairs stashed under the bed… 

    It pays to take care with BNPL!

  • How much does BNPL cost?

    Use it right and BNPL won’t cost you any more than the cash price of the item you’re buying.

    There are no fees if you pay off the full amount in the time stated, and there’s no interest. But these terms can vary by provider.

    So essentially you pay the cash price but typically over a few months. 

    None of the big BNPL brands charge you any fees for using BNPL in this way.

  • What are the advantages of BNPL?

    BNPL allows you to spread the cost of a purchase and is offered by many high street and online retailers.

    So it’s a cheap and quick way to get FREE credit.

    It’s also easy to set up and use – perhaps too easy! You just have to select this payment method at the checkout.

    Some providers will give you up to 3 months to pay off your BNPL credit.

  • What are the disadvantages of BNPL?

    For many people, the downside of BNPL is the temptation to overspend. BNPL is debt and it needs to be repaid.

    Check yourself at the checkout – if you’re only buying this item on impulse and because you can spread the payments, think again about getting into this kind of debt.

    Also, because each BNPL company has different terms, make sure you know the Ts&Cs that come with your BNPL purchase.  

    For example, ClearPay lets you pay in 4 instalments but has a £6 minimum late payment fee.

    Alternatively, Klarna allows you to choose to pay in 30 days or 3 months and promises no late repayment fees.

  • How can I make BNPL work for me?

    Think about it like this: if you have to borrow to make a purchase, think about that purchase carefully. Because however easy it feels, it is still debt. And debt shouldn’t be taken on lightly.

    For example, while you can now use Klarna to pay for a Deliveroo takeaway, it doesn’t mean that you should!

    If you do decide that you’re happy and confident to buy now and pay later for a purchase, make sure you factor the upcoming payments into your budget. 

  • Will BNPL affect my credit rating?

    According to Experian, when you ask for credit and a lender does a credit check on you, this new credit application will most likely be registered on your credit report. Other lenders can see BNPL searches, but these are excluded from your credit score for 12 to 18 months.

    It’s also been reported that Klarna and LayBuy report users’ payment history to credit reference agencies. And Citizens’ Advice have found data that half of 18-34 year olds are taking out loans to make their BNPL repayments.

    This year, the government are working to regulate the BNPL industry with tougher affordability checks and FCA approval for BNPL companies.

    If you continue to miss BNPL repayments, some providers will refer you to a debt collection agency.

  • Should I use BNPL or my credit card?

    Good question! And the answer depends on a couple of factors…

    If your credit card has a low or no rate of interest (an interest free period for example), then using your credit card can be as cost effective – if you repay the amount at the end of the month or within the interest free period.

    But there’s another excellent benefit to using your credit card: Section 75.

    Section 75 means that all purchases over £100 are protected by your credit card. So, you have an extra layer of protection if you have a problem with the product or service: you get your money back!

    Using a ‘third-party payment processor’, in this case, our BNPL providers, means you don’t have a direct link to this credit card cover and so it’s unlikely you can take advantage of the extra consumer protection. 

  • Bonds

    Taking out a bond is like making a loan to a business or government (government bonds are also known as gilts). In return for your investment, you get a steady income in the form of interest payments for the duration of the bond. At the end of the term, you get your initial cash back. In terms of risk, bonds are generally considered pretty safe investments to make. As usual, though, that does tend to mean that the returns are comparatively lower. If you don’t feel like going it alone in a fixed-income bond, you can buy into collective investments like unit trusts.

    It’s worth stressing that investing in bonds is very different from buying shares in a business. All you’re doing is lending the organisation your cash in return for interest payments. You won’t get a stake in the company itself this way. On the other hand, bonds can be a safer bet if business goes badly. If the company were ever made insolvent, for instance, you could still lose your money like a shareholder. However, since you’re counted as a “creditor”, you stand a decent chance of getting at least a big chunk of your investment back.

    You can buy company bonds from the London Stock Exchange’s Retail Bond platform, with a minimum investment of just £1,000. For gilts, you can go straight to the government’s Debt Management Office.

  • How much can I borrow?

    Before you calculate how much a house will cost, you need to know how much you can borrow. We all have a dream house. However, since the financial crash in 2009, new laws set by the UK’s Financial Conduct Authority (or FCA) mean that in most cases, banks will only be able to lend you up to 4.5 times your income. This can vary depending on a number of factors such as your credit score or if you’re buying with another person.

    Most banks will offer a mortgage calculator tool. This allows you to input your income with other financial information to figure out the maximum that you can borrow.

    Mortgage calculators will often use something called a “soft credit search”. These will not impact your credit score which is important if you are looking to borrow money. A better credit score can lead to better rates when taking out a loan - making it cheaper in the long run. It’s best to check that the calculator you are using only involves a soft search. Some may leave a hard search on your report, and if too many of these are used in a short space of time, you may end up affecting your credit score.

    Online calculators are not the only way to find out how much you can borrow for a house. You can also use a mortgage advisor to work out this amount for you. However, some advisors can only offer certain products or providers when comparing deals. In order to see all of the offers available on the market, you’ll need to make sure you go with an Independent Mortgage Advisor. If you’re unsure if an advisor is independent or not, make sure to ask as they are legally required to tell you.

    Whatever method you choose will give you an estimate on how much a bank is willing to lend you. This means you can now work out how much of a deposit you want to put down.

  • Here are a few more bad energy habits that most of us could do breaking:

    • Stop leaving your household appliances on standby all day and night. Boom – you just saved yourself £35 a year with zero effort!
    • Stop running your dishwasher half-empty. Even if you end up only dropping the number of times you use the thing by 1 cycle per week, you just saved another £8 a year off your energy bills.
    • Do the same thing with your washing machine. Always make sure it’s properly loaded before you set it off. Again, you’re saving another £8 per year just by running your washing machine once a week less.
    • There really is no need to keep filling the kettle up to the maximum capacity line every time you boil it. All you’re doing is wasting energy. Only heat the amount of water you need for the job at hand. That alone will probably save you £6 a year. Just imagine what you’ll save by using the same trick when you run your bath.
    • If there’s no one in the room, there’s no need to leave the lights on. Simply remembering to flip the switch when a room’s not in use can mean an extra £11 in saved cash over a year.
  • Budget, Budget, Budget

    The most important first step you can make is to give yourself a clear picture of where you’re money’s going each month. If you’re looking to find ways to save cash, you need to spot the leaks in your wallet first.

    One of the most useful hacks for this is what’s called the “zero-based” or “zero-sum” budget. It’s simpler than it sounds. First, figure out exactly how much money you’ve got coming in, regardless of where it’s coming from. Once that’s done, look at where all that money’s going. Start with the stuff you really can’t control, like rent or mortgage payments, before moving on to your “optional” spending. Finally, don’t forget to take any cash you’re saving into account. A lot of people miss this step, but remember – every penny goes somewhere, even if you save it.

    If it’s sounding like hard work already, remember that there are loads of free apps designed to make it simpler. At this point, the goal is to get organised so you can make better decisions later. 

  • The exciting world of spreadsheets

    Well, okay. Maybe “exciting” isn’t quite the right word, but the humble spreadsheet is still one of the most effective ways to get your budget working for you. If you don’t already have one you’re comfortable with, there are plenty of spreadsheet options on offer. A lot of them even have built-in templates specifically for managing a budget. Microsoft Excel and Google Sheets, for instance, have a range of set-ups to help guide your budget-building in the right direction.

    The main thing to realise up-front is that setting up a spreadsheet to handle your budgeting really isn’t nearly as difficult as it might look. You won’t need to study up and become a qualified computer geek to stay on top of your financial plans. What you will have to do, though, is make a few basic decisions from the outset.

  • What type of budget do you want?

    The first thing you’re going to want to do is choose whether you’re making a weekly budget or a monthly one. Basically, this is going to come down to the way you’re paid. Weekly budgets make more sense if you’ve got weekly wages than if you’re paid at the end of the month, for instance. If that sounds obvious, it probably is – but remember that it might not just be your own finances you’re budgeting around.

     

    That brings us neatly to the next thing you’ll need to consider. Is the budget you’re making only going to include your own income and spending? If there’s another earner in your household, it’s a pretty good idea to include their information in a combined budget. This, naturally enough, could easily effect your decision about budgeting weekly or monthly. If your partner’s paid by the week and you’re paid by the month, for example, it might make sense to make your budget a weekly one.

  • Recording your income

    With those initial decisions squared away, it’s time to start entering the key details. The first things to look at here are your bank statements, whether you get them on paper or digitally. Your statements are some of the most important budgeting tools you’ll ever have, so it pays to keep track of them.

    Most of the information you’ll need can be found here. Note down all the income covered in your statements, wherever it comes from. What you’re really looking for here is the money coming in that you can count on regularly. We’re talking about wages, pensions, rent payments (if you’re making any extra cash by letting out a room or property) and any benefits you’re getting. If you’re self-employed, on a zero-hours contract or have an irregular income for any other reason, this can sometimes be a challenge. In that case, you’ll often find your best bet is to average out your income over 3 to 6 months’ worth of bank statements. Once again, your banking paperwork comes to the rescue!

  • Recording your spending

    Now let’s take a look at the other half of your budget: your regular spending. Start out with the costs that you really can’t do too much to bring down. We’re talking about your rent or mortgage repayments, Council Tax and other essentials like energy and water (although there are a few ways to help with those – see our guide, “6 Easy Ways to Save on Gas and Electric Bills” for more). Once you’ve got those sorted, move on to your other regular expenses, like transport costs (whether that’s petrol, public transport tickets or both), grocery bills and any medical costs you’ve got, like prescriptions or private health insurance payments.

    Next up, give some thought into the spending you’re doing on a less regular basis. This is where you record the cash you spend on one-off emergencies, repair bills and so on. This kind of spending can be difficult to account for – but again, averaging the numbers based on what you’ve splashed out in previous years is a good start. For costs that crop up only once a year or so, feel free to divide them by 12 when you slot them into your monthly budget, to keep things nice and simple.

    How to save money on your energy bills

  • Time to put it into practice

    That’s pretty much your basic budget in a nutshell. The important thing now is to make good use of it. This is going to sound pretty obvious, but the main goal is to keep your spending lower than your income. If you can’t do that, then you’re going to be running up debts over time. When the balance of your budget seems to be tipping that way, it’s time to start looking for ways to either boost your income (like renting out an unused room, for instance) or to cut back on your spending. Look a little closer at those expenses you’ve been recording to see if there’s anything you could prune back enough to balance things out.

    If you can get yourself into a position where you’re spending less than you’ve got coming in, you can start planning out a strategy for saving money. Again, your budget is a great help here. The trick to saving is to make a habit of it. Putting a little aside every month is generally a lot better than dumping in a big chunk of change only once in a while, particularly when you’re trying to plan ahead. The more consistent you are with your saving, the easier it’ll be to see it stack up - even if the monthly amounts aren’t huge. Most importantly, remember to include your savings in your budget spreadsheet. That aim is to record where every penny of your income is coming from and going – whether it’s spent, saved or given away. It’s called a “zero-based” budget, and it’s an incredibly valuable tool.

    Free budget planner

  • Free tool

    To get you started on your budgeting journey, we've produced a free and simple budget spreadsheet that uses the 50/30/20 rule to help you take control of your finances without a lot of hassle.

    1. Enter your total yearly income, credit card balance, annual loans (including mortgage repayments) and any assets you have into the boxes.
    2. Check the ''Each month...'' box to see what you should be spending and saving from your total earnings.

    Get a free budget planner

  • There's no crystal ball, but..

    Building a budget is about making predictions. Just like an employed person with a regular income, you need to understand where your cash is coming from and how reliable it is. For the self-employed, one of the simplest ways is to base your average expected income on what you earned in previous months. You won’t be able to predict every little bump in the road or unexpected bonus this way, but the longer you keep it up, the more accurate your predictions should tend to be.

  • Sort your costs out

    While you might not be able to predict or control every penny you’ll have coming in from month to month, there’s a lot you can do to keep your costs in line. When you make a budget, you’re trying to account for where every penny you’re earning goes – whether it’s spent, saved or given away. That means it’s every bit as important to track your spending as your income.

    Naturally enough, there will be some essential costs you’ve got no way of bringing down. Others, however, might be a bit more flexible. Just to pick one of the more common things self-employed people overspend on, take a look at your broadband package. It’s easy to assume you need a top-tier superfast service, but if all your business needs is email and maybe decent video conferencing, you might be paying too much to get online. Even if you don’t want to slim down your service, you might still find a better deal on a similar package if you’re prepared to scout around a bit.

  • Basic beginner budgets

    So, armed with a clear picture of what you’re spending each month to keep the lights on and a good estimate of your expected income, it’s time to turn that information into an actual budget. The good news is that you’ve already done most of the hard work!

    Having regular bills and irregular income needn’t stand in your way too much here. You’re already used to working with averages, so you’ve probably got a decent idea of your annual income. You’ve checked through your regular bills, so you know what your unavoidable yearly “overheads” like electricity and internet access are costing you. Working out what percentage of your total income is being taken up by these essential expenses will tell you what you need to set aside for them each payday.

    So that’s the job done, right? Well, not exactly. Bills have a nasty habit of sneaking – or rocketing – up over time, so each year you’ll need to readjust your calculations a bit. The whole point of budgeting is to keep your cash flow healthy over the long term, so working from up-to-date figures is a must. If there’s an unavoidable price hike on the horizon, make sure you’re putting aside enough money now to cope with it later.

    Budgeting for beginners

  • Self-Assessment: taking a good look at your business

    The yearly Self Assessment tax returns you have to file when you’re self-employed can easily trip you up if you’re not prepared. Leaving your planning for how to pay up what you owe until after you’ve already filed your return is a dangerous road to walk down. It’s all too easy to get lumped with a tax bill you can’t pay at the end of the tax year, or payments on account that you haven’t got the cash flow to cover.

    Luckily, since you’re already used to estimating your annual income, you should already have a good idea which tax bands you’ll be dealing with. If you know you’ll only be paying at the basic rate of 20%, for instance, you’re in a decent position to prepare by setting aside 20% of your earnings as they come in. That’ll keep your Income Tax covered – but there’s still more to pay!

    We know, it sounds nightmarishly complicated. In practice, though, it’s all calculated automatically when you file your Self Assessment tax returns online. The main point is to keep your National Insurance situation in mind throughout the year, because Income Tax isn’t the only way HMRC dips into your pocket.

    Guide: Self-assessment tax returns

  • Rainy day budgeting

    Cash flow crises can be incredibly dangerous when you’re self-employed, with the money flowing through your business getting choked off by late-paying customers, unreliable suppliers or unexpected costs. Even the best-prepared business will sometimes find it didn’t bring in as much money in a month as it expected. That’s what a rainy day budget is for. A good rule of thumb is to aim for an emergency cash stash that’ll tide you over for at least 3 months of your basic living expenses. It sounds like a bit of a hill to climb, but you don’t have to reach the top all at once. Just keep socking a little away regularly until you hit the summit. You might never need to fall back on your rainy day fund, but you’ll be glad of it any time you’re struck with a short-term financial disaster.

  • Keeping things tidy

    It’s not always essential to have a dedicated business account when you’re self-employed. If you’re a Sole Trader, for instance, you might be keeping your finances simple by just using your personal bank account for your business cash. However, a separate account can be a useful thing to have when you’re keeping a close eye on how your business is doing. It’s not always easy to get a clear picture of your work finances with your personal money cluttering up the numbers. When you make payments for essential work expenses, for instance, they can bring down the profits you’re being taxed on in your Self Assessment paperwork. Keeping those finances separate makes it a lot easier to tell your allowable expenses from your personal spending so you don’t miss out on the tax relief you’re owed.

  • Speaking of not missing out...

    With Self Assessment, it’s incredibly important to understand the connection between the money you’re spending to stay in business and the tax you owe. If you’re not letting the taxman know about all your allowable expenses, you’ll end up pouring much more than your fair share into HMRC’s pockets. Anything from professional clothing and equipment to work travel, meals and accommodation can count toward the tax relief you’re owed – but it all depends on your situation. For example, if you use the same phone for work and personal calls, only the money spent on business use can count against your taxable profits for Self Assessment. It can take a bit of legwork to make sure you’re claiming for every eligible cost, but it’s really worth getting it right. Self-employed people without a lot of business expenses to claim for in a year can actually simplify things a lot by claiming a tax-free trading allowance of £1,000 instead of working out all their allowable costs.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Budgeting for beginners

    Let’s take the biggest step first. If you’re planning on moving out, getting control of your finances is Job One – and that means making a budget. Don’t worry; it’s a lot less scary than it sounds. You’re not going to need to become an expert accountant overnight. All you have to do is paint yourself the clearest, most complete picture you can of the cash you’ve got coming in and going out, then use that information to make a plan.

    One of the best ways to do this is to draw up a “zero-based” budget (sometimes called “zero-sum” budgeting). All this really means is listing out every penny of your regular income, no matter where it comes from, and every penny going out, whether it’s spent, invested, saved or just given away. You can read more about zero-based budgets in our other guide, 4 Fixed Income Saving Strategies – Combine to Win!

    So, with your zero-based budget all mapped out, what can you do with the information? Well, for starters, it’ll make it a lot easier to get into some great saving habits. When you’re putting away your spare cash, little and often’s usually a lot better than dumping in larger amounts at random. With the information from your budget, you should be able to set yourself up a “50/30/20” system. Basically, each month, you set aside 50% of your income for essential expenses, 30% for fun stuff and 20% for savings. The trick to it, of course, is keeping the consistency up. Whatever you’re saving toward, though, building good habits from the outset can make a huge difference to your overall finances.

    Free budget planner

  • Budgeting basics

    You’ve probably heard of budgeting before. But what does it really mean? It’s the act of getting all of your income together and putting it against your outgoings. Once you’ve done this, you can start to see where your money is being spent and can make more informed decisions.

    Without a budget, you’re spending blind. The danger of this comes when you’re spending more than you actually earn and fall into debt.

    Think of your income as water coming from the tap - and your outgoings as leaks. The more you spend on one thing, the more money escapes from your income stream. Identifying where you’re spending can help you plug any holes, helping you reallocate money to where you really need it.

    Free budget planner

  • Getting organised

    Getting organised with your money is the first step in budgeting… and it doesn’t take as long as you might think. Arm yourself with a notepad and pen or a spreadsheet depending on what works best for you - and block off a day to go through your spending.

    In terms of paperwork, the more information you can get (your hands on), the better:

    • Payslips
    • Bank statements
    • Credit card bills
    • Household bills
    • (And) Savings and pension contributions

    As you spend different amounts of money at different times of the year, going back 12 months will give you a better idea of your spending all year round. For instance, you might spend significantly more around Christmas than in January.

    Thankfully, most of this information can be found online, so you won’t have to go digging around for paper copies.

    To make sense of all these numbers, there are loads of free budgeting spreadsheets with inbuilt formulas to do all the calculations for you. Some may be really simple and some have more detailed sections about monthly outgoings. Simply pick one that (best) suits your needs - you can always rename certain sections if there’s no perfect match.

    Before we get into working out the numbers, make sure you hit the subscribe button below. That way, you can stay up to date with the best ways to make your money go further…because you’re always better off with rift! Now that’s done, let’s get to the fun part - working out what you have to play with.

  • The importance of income after tax

    We all wish we could take home our entire salary. Unfortunately, that’s not the case. When working out your budget, it’s important to use your income after all deductions are taken out. That includes tax, national insurance, and pension contributions.

    If you used your pre-tax salary, you’d end up with a number much larger than what actually goes into your bank account. That may look great on your spreadsheet, but it could lead to spending more money than you have.

    The best way to look at your income is to add up all of the amounts on your payslips and divide it by the number of months they’re from. This way you’ll get an average that you can expect to take home each month.

    For those with big differences in their pay, you may want to be a bit more cautious as some months may fall short of this figure. You might be best trying to save additional money from the higher paying months, so that you can make up the rest on the lower-paid months.

  • Essential spending and disposable income after tax

    So we’ve worked out how much is coming in. Now it’s time to calculate what’s going out. This can be split into two categories - essentials and non-essentials. Essentials are everything that you need to live. These include:

    • Mortgage or rent
    • Household Bills
    • Food Shopping
    • Transport
    • Credit cards
    • AND Work-related expenses, like travel

    It’s likely some costs - like household bills and food - will change every month. So, work out an average to get a rough idea of how much you spend on each.

    Once you take away this essential spending from your income, you’ll be left with a figure that’s called your disposable income. As this section is the most likely to fluctuate, it’s definitely worth breaking it down.

    Some examples might include:

    • Gym membership
    • Streaming services
    • Eating out
    • AND Socialising
  • Weighing up your wants and needs

    Now all your money’s accounted for, you’re much better equipped to make judgements on your spending. For instance, if renting is taking up a huge chunk of your income, you could set an ideal amount before looking for new properties. This way you can set a cap to ensure you’re spending an amount you’re happy with.

    As mentioned earlier, some months may be more costly than others. Yes, we’re looking at you Christmas. However, with enough time you can budget for this. If you know you’re likely to spend £300 at the end of the year, you can always put this into your budget. Simply divide £300 by 12 months and put that into your outgoings. By putting £25 away each month, you’re less likely to feel the shock in December than if you had to pay it all in one go. This method works for pretty much anything - from MOTs to holidays.

    If your outgoings are more than your income, you may want to put your spending habits under the microscope so you don’t go into debt. If this is the case and money is a concern for you, it’s best to speak to a financial advisor. Several charities also offer free advice.

    And remember, these are just the basics of budgeting to get you started. It’s important to revisit your spending every month to keep up-to-date with where your money’s going.

  • Building better habits

    When you commit to saving, you’re making a potentially critical investment on your own future, so starting young makes sense. Your early decades are a great time to get to grips with things like pension planning and basic budgeting. The trouble is, this isn’t usually the kind of thing they dig deeply into at school. Most of us are pretty much left to educate ourselves on simple money management. When you’re 21, pensions can seem like such a non-issue that they’re hardly worth learning about – much less paying into. However, having even just a rough idea of how the system works can be a major leg-up when you start working and building up a pension of your own.

    So how do you kick-start some good savings habits? Well, the first thing to do is open up a spreadsheet. Don’t worry – that’s about as scary as this is going to get. We’re not expecting you to become an instant financial expert. Just open your sheet and start recording what you earn each month in it. When you spend money, make a note of that too. Pretty soon, you’ll have the makings of your first real budget plan laid out.
    Remember that the small details matter. Every amount you’ve spent, no matter how small, goes into your spreadsheet.

    Remember to record what it was you spent it on, too. You’ll quickly get a clear picture of where all your cash is going – and that’ll be important when you start to plan your saving.

    Free budget spreadsheet

  • All you really need to do to get started is:

    • Work out exactly how much you’ve reliably got coming in each month, after tax. That includes all your sources of income, along with any tax credits or similar things you might be getting.
    • List out your basic outgoings, whether they’re bills, direct debits or anything else you’re spending regularly.
    • Separate your outgoings into essential and non-essential spending, then cancel or cut back on anything you can do without. That means and streaming subscriptions you’re not using, any gym memberships you’re not getting good value from and so on.
  • Can I claim for anything else?

    Yes! There are lots of everyday work expenses that entitle you to tax relief, but so many people just don't realise they qualify. Small tools from hairdressing scissors to masonry drills can count for a rebate claim, as can any required licences or professional subscriptions. This is a huge and often misunderstood area of tax law.

    One of the biggest tax rebate issues is travel to temporary workplaces, but anything from visas to vaccinations can count. Understanding what you can claim for (and, just as importantly, what you can’t) is the key to maximising your tax refund claims while staying on HMRC’s good side.

  • Can I claim a tax rebate?

    Tax rebates are a really tricky area, which is why so many people decide to get professional help with them. The basic idea is that when you have to spend money to do your work, some of your costs can be used to bring down your tax bill. That said, the regulations are complicated, and you can get into serious trouble if you mess up. Not claiming back everything you’re owed is painful enough. Claiming too much is a whole lot worse once HMRC catches on.

    What's a tax refund?

    There are a lot of reasons why you might be owed some tax back, but the main one is generally work expenses. Travel to temporary workplaces, repair and replacement of any essential gear and a whole range of other everyday costs can build up into a decent tax refund claim.

    When HMRC works out the tax you owe, it assumes you’re working regularly throughout the year. If you’re a student doing casual or short-term work, though, you could end up paying too much tax. Basically, a holiday job could see you only being paid for a couple of months, but charged a whole year’s worth of tax. Worse yet, you’re probably still under your Personal Allowance for the year, so you shouldn’t have been taxed at all!

    Luckily, whatever the reason you’ve paid too much, you can claim a tax rebate to settle up. You can generally check your tax and claim your refund online - but again, a lot of people prefer to get professional help. Claiming refunds properly means keeping track of a lot of paperwork, from the official documents you get from your employer to receipts and invoices for your expenses. You can find the official tax checker here: https://www.gov.uk/check-income-tax and the refund tool here: https://www.gov.uk/claim-tax-refund.

  • Capital Gains Tax

    One of the problems with dealing with HMRC is the amount of jargon they use. Ask the taxman about Capital Gains Tax, for example, and he’ll flood your ears with talk of “disposing of chargeable assets” and other confusing terms. Basically, what we’re talking about here is a tax on the profit you make when you sell, swap or give away something that’s gone up in value since you bought it. It even counts if the “asset” got lost or damaged and you claimed compensation for it.

    The trick to getting your head around Capital Gains Tax is to understand that it’s the profit you make that matters. That’s what you’re paying tax on, not the full amount of money you got for it. So, to put it in real terms, let’s say you bought a work of art for £5,000. You held onto it for a while, then sold it on for £25,000. Your total “chargeable gains” (the amount you’ll actually pay the tax on) come to £20,000, since that’s the overall profit you made on the deal.

    Capital gains tax: Where do I start?

  • What is capital gains tax?

    When you boil it down to the basics, Capital Gains Tax (CGT) isn’t all that complicated. At its simplest, it’s just the tax you owe on your profits when you sell something that’s gone up in value since you bought it.

    Keep in mind that it really is just the profit you make when you dispose of an asset that counts for Capital Gains Tax, rather than its entire value. The amount you originally paid for it makes a huge difference to the tax you owe. The more it cost you, the less profit you made (and have to pay tax on).

  • What does ''dispose'' of mean?

    All clear as crystal so far, right?

    Well, not quite. While those are the bare bones of it, there’s a fair bit more to know about Capital Gains Tax. For example, you don’t technically even need to sell your “asset” to end up paying tax on it. Capital Gains Tax can hit you any time you “dispose” of something it applies to. That can mean when you swap it for something else, give it away or even claim compensation for it if it gets lost or stolen. All of these situations can count as disposing of your asset.

  • Items you may pay Capital Gains tax on

    So what exactly is an “asset” for Capital Gains Tax? In general terms, if it’s a physical, movable thing that’s worth at least £6,000, then it probably counts as an asset. That could mean artwork, jewellery, or even book collections and wines. There’s an exception for privately owned cars, but other kinds of vehicles can still count for the tax.

    If you dispose of property that’s not your main home then you’ll probably owe Capital Gains Tax on your profits. In fact, if you were using your main home for business or letting it out, even that can count for the tax. The same goes for any shares (unless they’re in an ISA or Personal Equity Plan) or business assets you dispose of.

    Anything with an expected lifespan of 50 years or under will generally be exempt, but the rules can get fiddly here, so it’s probably best to get professional advice if you’re not sure where you stand.

  • What are your allowances?

    Like a lot of UK taxes, there’s a threshold you have to hit before you start owing anything on your capital gains. For the 2021/22 tax year, for instance, there’s a tax-free allowance of £12,300, or £6,150 for trusts. If your overall profit from disposing of assets ends up below this amount, you won’t pay any Capital Gains Tax on it. However, in the November 2022 Autumn Statement, Chancellor Jeremy Hunt announced that the Annual Exempt Amount for Capital Gains Tax would be cut from the previous £12,300 to a new level of £6,000 in 2023, falling again to £3,000 in April 2024.

  • Gifts to your spouse

    If you’re married or in a civil partnership, then the rules for Capital Gains Tax have a little flexibility in them. In fact, unless you were separated and not living together at all during a tax year, you won’t pay any Capital Gains Tax if you “dispose of” an asset to them. At least, not unless you did it so their business could then sell it on.

    Watch out, though – your spouse or civil partner could easily still get hit with Capital Gains Tax if they later dispose of the asset. If that happens, the rules work in the usual way. They’ll pay tax if they sell the asset, swap it, give it away or claim compensation for it. In this case, the profit they pay tax on will be based on the amount you originally paid for the asset, compared to the value they dispose of it for.

  • Gifts to charity

    There’s another general exemption for Capital Gains Tax on items you give to charities. However, a wrinkle in the rules means that you could still have to pay CGT if you sell the item for less than its market value (but still make a profit compared to what you paid for it). Again, talk to a trusted professional if you’re not 100% sure whether you need to pay Capital Gains Tax or not.

  • What is the rate of Capital Gains Tax?

    When you pay Capital Gains Tax, the rate you’re hit with depends on the highest tax band you fall into. Basic rate taxpayers, for example, pay a percentage based on the size of their gains (their overall profit), their taxable income and whether or not the gains come from residential property. We know, that sounds complicated – and it definitely can be.

    • First, you work out what your total taxable income adds up to, meaning your earnings minus your tax-free Personal Allowance and any other Income Tax relief you qualify for.
    • Next, you calculate your total taxable gains, minus your Capital Gains allowance. Remember that this is separate from your Income Tax Personal Allowance.
    • Add your total taxable gains to your taxable income. If that amount is still in the basic rate tax band for Income Tax, you’ll pay 10% Capital Gains tax on your profits from disposing of assets. However, if any of your gains are from residential property, you’ll pay 18% on those instead.
    • If you’re in the higher rate tax band (before or after you’ve added your taxable gains to your taxable income), then you’ll pay 20% Capital Gains tax instead, or 28% on residential properties.
  • What if I make a loss when I dispose of an asset?

    One bright side to the Capital Gains Tax system is that it cuts both ways. If you make a loss from disposing of assets, you can report it to HMRC to deduct it from your total taxable gains for the year. These are called “allowable losses”. You can actually report losses like this for up to 4 years after the end of the tax year when they occurred. Obviously, if your losses from disposing of assets mean your total taxable gains drop below the tax-free allowance for CGT, you’ll end up paying no tax on them.

    If you want to learn even more about Capital Gains Tax – particularly how it compares and overlaps with Inheritance Tax, check out our other article, “The Difference between Inheritance Tax and Capital Gains Tax”. In the meantime, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Capital gains tax

    Capital Gains Tax applies when you profit from selling or disposing of an asset that increased in value. The tax rate depends on your income level: 18% for basic rate taxpayers and 28% for higher rate taxpayers for properties; 10% and 20% for other assets. Chancellor Jeremy Hunt reduced the Annual Exempt Amount from £12,300 to £6,000 in 2023 and then to £3,000 in April 2024. Couples can combine their allowances to double the tax-free threshold.

  • Here’s how it breaks down in practice:

    • First, you work out what your total taxable income adds up to, meaning your earnings minus your tax-free Personal Allowance and any other Income Tax relief you qualify for.
    • Next, you calculate your total taxable gains, minus your Capital Gains allowance. Remember that this is separate from your Income Tax Personal Allowance.
    • Add your total taxable gains to your taxable income. If that amount is still in the basic rate tax band for Income Tax, you’ll pay 10% Capital Gains tax on your profits from disposing of assets. However, if any of your gains are from residential property, you’ll pay 18% on those instead.
    • If you’re in the higher rate tax band (before or after you’ve added your taxable gains to your taxable income), then you’ll pay 20% Capital Gains tax instead, or 28% on residential properties.
  • Tips to keep your car insurance costs down

    • With more of us working from home, the number of miles we cover a year has reduced. This is one small detail that many motorists forget to tell their insurance provider and doing so could cut the cost of your premium. 

     

    • If you are now working from home and no longer use your car for work purposes, changing your policy from a business policy to a social one will help cut costs. 

     

    • You may think that keeping your car in a garage will reduce your premium as it adds an additional level of security. However, it can actually increase your insurance costs as a high number of bumps and scrapes come from drivers attempting to park in the more confined space. 

     

    • Always, always shop around. It may seem tiresome but the chances are you will find a provider willing to insure you for a lower cost. 

     

    • Always ring directly. Many insurers today specifically state they will not negotiate on renewal offers. A phone call could prove otherwise as they are far more likely to offer a reduced rate over the phone. 
  • ULEZ Misery for Motorists

    For thousands of motorists, the recently expanded ULEZ will have only added a further financial strain to the cost of running their car on a day to day basis. The charge of £12.50 per day applies to any car that isn’t ULEZ exempt up to and including 3.5 tonnes, or 5 tonnes for mini buses. 

    It’s thought that there are some 700,000 cars across London that don’t meet ULEZ emission standards. That’s a potential tax grab of £8.75m per day should they all hit the road and, for the average person using a non-ULEZ compliant car for business purposes, the £12.50 charge amounts to £3,250 over the course of the working year (260 days)

  • How to beat the ULEZ

    There are some ways you can beat the ULEZ charge. For example, classic cars built before 1982 which are tax exempt are also ULEZ exempt. This cut-off date also rolls forward so by 2025 you can purchase a pre-1985 motor and it will be ULEZ exempt. 

    Agricultural and military vehicles are exempt, as are cranes, meaning you could commute in a tank, tractor or crane and not have to pay the ULEZ charge. 

    Failing that, you could join the circus. Anyone driving a specifically constructed or modified ‘showman’s vehicle’ used for a performance, or to haul performance equipment is exempt.

    However, the most realistic way for many motorists to forgo the ULEZ is if they are self-employed. While you still need to pay the tax upfront, you can claim it back through your tax bill if the journey was ‘an exceptional trip solely for business’.

  • Advisory Fuel Rate Increase

    It’s not just the cost of the ULEZ that self-employed motorists can claim back, there are also advisory fuel rates that allow them to be compensated, usually when using a company car.

    The good news is that as of the 1st September, these rates have increased. Petrol cars between 1401cc and 2000cc can now claim £0.16 per mile, an increase of £0.01. Petrol cars over 2000cc have seen a £0.02 increase, allowing them to now claim £0.25p per mile. While diesel drivers over 2000c have also seen a £0.01 uplift, allowing them to claim £0.19 per mile. 

    This means motorists in petrol cars between 1401cc and 2000c can claim an average of £2,650 back per year. Those driving cars with an engine greater than 2000cc can claim an average of £4,140 per year. While drivers with a diesel engine larger than 2000cc can claim £3,146 per year. 

  • How car insurance is calculated

    With car insurance, the amount you’re expected to pay is based on how safe your insurer reckons you vehicle is in your hands. When they make their calculations, they’re looking at how risky it is to insure you. The less safe they feel, the higher your premiums will be. Partly, it’s about how likely they think you are to have an accident – but there’s actually a lot more to it than that. Let’s take a look at some of the main “risks” they’ll be weighing up.

    One of the first things your insurer will look at is your age. It might seem unfair, but younger people are basically always asked to pay more for their car insurance. It’s not just prejudice, though. There’s actually a bit of science behind it. If you’re in the 16-24 age bracket, you’re flat-out more likely to get into a road accident than any other group. It’s such a glaring red flag in the statistics that people are coming up with ways to bring that perceived risk factor down. You see that with things like telematics “black boxes” installed in cars (or on phones, in some cases) to track how safely you drive and adjust your premiums around that.

    Another big risk calculation insurers make is your location. After all, insurance isn’t just about accidents. Your insurance price will include an assessment of the vehicle crime rates where you live and where the vehicle’s stored. It’s kind of a postcode lottery, where lower crime rates will generally mean lower premiums. There are still a few things you can do to knock your risk levels down a notch or two, though. Keeping your car in a locked garage can help put an insurer’s mind at ease, for a start. If that’s not possible, even getting a good immobiliser can make a difference.

    It might seem strange that the kind of work you do can have an impact on your car insurance prices, but it makes sense if you think like an insurer. If your job sounds like it involves a lot of road use, you can often find yourself paying more. In fact, even the same job can sound very different to an insurer if you use different words to describe it. Describing yourself as an “editor” rather than a “journalist”, for instance, has been known to affect insurance rates. To an insurer, an editor sounds like someone who sits safely in an office all day. A journalist, though – that’s someone you can imagine taking risks in dangerous places. In real terms, they might be doing the exact same job – but which do you reckon gets the better offers on their insurance?

    Okay, now let’s look at your vehicle itself. The kind of car you drive can make a pretty big difference to its insurance group – and therefore to the rates you pay. An expensive car, for instance, can mean high-cost repair bills and replacement parts. That’ll pump up your premiums fast. Older cars, perhaps surprisingly, can also fall into this trap, simply because they’re often considered to be less secure against theft or break-ins.

    So that’s the basics of your risk calculation handled – but what kind of cover are you actually buying? Obviously enough, the more kinds of mishaps your insurance covers, the more expensive it’ll wind up being. Comprehensive cover, living up to the name, protects you against more or less anything. Third Party Only, on the other hand, doesn’t really protect you at all. It only protects other people against you. That’s basically the minimum insurance you can legally drive with. In the middle, though, we find Third Party, Fire and Theft cover – which is more or less self-explanatory.

    When your insurer works out your rates, they’re naturally going to want to know about your car use. Basically, the more use you get out of your vehicle, the higher the risks. If you drive for pleasure as well as business, for example, you’ll pay more than someone who only uses their car for work. If your work racks up a lot of mileage or hours on the road, that’ll factor in too.

    Next up is your excess. This is basically the amount you’re expected to kick in before your insurance claim starts paying out. It comes in 2 basic flavours: compulsory and voluntary. The compulsory excess built into your insurance plan is decided directly by your insurer. Whenever you make a claim, you have to pay this much up-front before you get anything from your insurance. With a voluntary excess, you get a say in how much you pay before your claim takes up the slack. The higher you set that, the less you’ll get out of your insurance – but the less you’ll usually pay in your premiums.

    Finally, there’s another, more general category insurers will consider. Things like how clean your driving record is, for instance, can make you seem like a better or worse insurance risk. Also, having other specific drivers can change your costs, depending on who they are. Most of the time, adding extra drivers to your policy will tend to ramp up your “threat profile”, along with your insurance payments. However, if you’re a young driver, adding an older, more road-tested person to your policy can actually bring your prices down.

  • How to save on car insurance

    If you understand the way an insurer thinks, and have a decent strategy going in, there’s quite a lot you can do to bring down your car insurance costs. Probably the most obvious thing is not to blindly take the first offer you see. Price comparison websites are probably the most efficient way to start. Just plug in your details and you should get a pretty good idea what the competition’s offering before you dive in. Watch out, though, comparison sites sometimes work more like “marketplaces” than strict apples-for-apples evaluations. The same insurer won’t necessarily post the same prices on every site, so it’s worth checking more than one.

    How to use price comparison sites

    There’s also a timing issue to keep in mind. You can buy your insurance up to 29 days before the start date, so leave plenty of time to scout the territory in advance. That way, you won’t end up having to make a hasty decision you’ll regret later. It can actually affect your risk level in the insurer’s eyes, too. Generally, if you start sniffing around for quotes about 3 weeks before your actual renewal date, you’re likely to look like a safer bet than someone who only checks at the last minute. Insurers like drovers who think ahead, and they get nervous if it seems like you’re the “just-in-time” type.

    Like any other important purchase or contract, it pays to look closely at the details. Don’t trick yourself out of your cover by not understanding the strings attached or following the conditions. Check for things like whether you need to have a telematics device (those black boxes we talked about earlier) or something similar to get the prices you want. You might find your great price relies on you keeping inside the speed limit or other conditions. If you don’t keep up your end of the bargain you can expect to pay more – or even lose your cover altogether!

    Another thing to think about is how you’ll be paying for your insurance. Paying monthly, for instance, is a lot like taking out a loan. You’re spreading the cost out, but you’ll end up paying more overall because of the interest you’re stacking up. Don’t underestimate this; it’ll add up quickly over time. If you can afford to pay the whole lump off at once, you’ll end up in a better position. If you’ve got a 0% credit card to fall back on, you could consider loading the whole amount onto that. Just be sure you can pay off the entire balance before the end of your interest-free period.

    We mentioned your voluntary excess before, so let’s dig into that a bit. When you raise your voluntary, you’re shouldering some of the insurer’s risk for them. In most cases, they’ll react by offering you a lower premium. Of course, you have to be sure you’ll be able to afford your voluntary excess if the worst happens. It’ll need to be somewhere easy to access, too, to be sure you can pay up and make your insurance claim quickly.

    Insurers tend to reward responsible vehicle owners with discounts on their premiums, called a no-claims bonus. In some cases, keeping your bonus can actually be better than making a claim – at least if we’re only talking about minor cosmetic damage. Paying for smaller repairs yourself can keep your premiums down, which can actually work out cheaper in the long run.

    Another important tip: always make sure you’ve got the cover you actually need. Some insurers will try loading your plan down with add-ons and extra features at “unmissable” prices. Don’t take on the costs of things that really aren’t necessary. Some of those deals might not even be as good as they look. You can often buy “add-ons” separately anyway – and maybe even cheaper.
    If you’re going to list any additional drivers on your insurance policy, pick the right ones and don’t try to cheat the system. Adding experienced drivers is a great way to bring down your costs, but don’t list anyone as the main driver if they’re not. You can end up blowing your entire cover if you aren’t completely honest.

    Speaking of being honest, there may simply come a time when you realise you’ve got the wrong tool for the job. You might love that SUV, but is it really worth all the extra costs you’re running up to insure it? Vehicles with smaller engine sizes tend to fall into cheaper insurance groups, so swapping down to a more reasonably sized car could be a smart move. Make sure you check the specific offers, though. Even cars of the same basic size can carry different insurance costs based on things like their make.

    That’s it for this basic guide to getting the best from your car insurance. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Are You a Carer or a Care Worker?

    Care work is rewarding work, whether you’re doing it for a family member or as your main job. It’s also demanding work!

    A Carer is typically someone who looks after a family member, a neighbour or a friend. You don’t have to be related to the person you look after. 

    The person you look after can require care for any reason. Perhaps they are elderly or have a disability. They may have long term illness, a mental health condition or drug or alcohol dependency.

    If you’re a Carer, you may qualify for an allowance or reliefs may be available.

    A Care Worker is employed by a company, agency or charity. You’ll have regular shifts/hours that you work, full- or part-time. As you get paid for your work, you can’t claim Carer’s Allowance but you may qualify for tax relief on things like travel expenses.

  • I’m a Carer – Can I Claim Carer’s Allowance?

    If you care for someone, even if you’re not related to or live with them, you could qualify for Carer’s Allowance.

    In 2022/23, the rate for Carer’s Allowance is £69.70 per week.

    To be eligible, the person you care for must receive one of the following benefits:

    • Middle or higher rate DLA (Disability Living Allowance)
    • Any rate of Attendance Allowance
    • The daily element of PIP (Personal Independence Payment)
    • Armed Forces Independence Payment

    And you must meet the following criteria:

    • You care for them at least 35 hours a week
    • You’re over 16
    • You’re not at school, college or university full-time
    • You take home less than £132 a week after tax, NI and expenses

    If you tick all the boxes, find out how you could claim Carer’s Allowance here.

    You can only claim once, even if you are looking after more than one person.

  • I’m a Carer – Do I have to pay tax on Carer’s Allowance?

    If Carer’s Allowance is your only income, you won’t have to pay tax on this claim.

    However, the allowance is taxable and must be counted in taxable income. So, if you have income from another job or, for example, a personal pension, and that all adds up to more than the personal allowance (£12,570), then you will owe tax.

    If you’re an employee, your employer will pay your tax through PAYE. If you have other incomes, you’ll have to declare these by filing a Self-Assessment tax return

  • I’m a Carer – Can I get a tax rebate?

    If you’re a Carer claiming Carer’s Allowance, you cannot claim any expenses. This also means you’re not eligible for a tax refund.

    This is different if you’re a Care Worker…

  • I’m a Care Worker – what help can I get?

    If you’re employed as a Care Worker and you have to use your own car to travel to patients’ homes, you may be able to claim the mileage allowance as a tax refund.

    You can do this if your company doesn’t already reimburse you for travel expenses.

    Find out more about Tax Breaks For Healthcare Workers.​

  • I’m a Care Worker – Can I get a tax refund?

    Healthcare workers in both the private sector and working for the NHS can qualify for a tax refund.

    That’s because you most probably spend some of your own money on work-related things like travel for work or washing your uniform.

    A healthcare worker tax refund is for anyone who:

    Ask us if you’re not sure.

  • Here's what to do:

    • Have your income paid into a standard current account. To keep things simple, we’ll think of this account as your “needs” envelope. All your essential payments will be coming out of this account, adding up to the 50% of your total income you’ve budgeted for.
    • Now, set up an automatic bank transfer to regularly pay 20% of your income into a separate savings “envelope” (remember, we’re doing savings before wants now). Depending on how you’re set up, this might be a savings account, an ISA or some other kind of investment.
    • With your needs and savings handled, your remaining 30% can go on the fun stuff. Again, though, you want to keep everything separate so set up another transfer to a “wants” account. Since you’ve already shored up your savings and paid out your essential costs for the month, feel free to go nuts with this with a clear conscience. You’ve earned it!
  • Cash in hand

    Unless you’re actually running a business yourself, you’ll probably tend to assume that all payment methods are the same. The thing is, you might actually find yourself getting a slightly better deal from your labourers by coughing up in cash instead of plastic. It might sound slightly old-fashioned these days, but there’s actually a real benefit to cash payments for many people. When you take a payment by credit or debit card, you end up paying fees for the transactions. Obviously enough, people faced with these fees will tend to pass them on to their customers in the form of a higher quote. If you pay in cash you eliminate those fees, and might see the benefit in a lower quote as a result.

  • Use cashback sites when you shop online

    We’re basically all going to end up shopping online anyway, so why not make it work in your favour? There are websites out there that partner up with top brands in their thousands to put money back in your pocket when you buy.

    How does it work? Well, when you buy something from a seller featured on a cashback site, the seller gives the site a commission – which they share with you. You can then transfer that cash into your bank account, turn it into a gift card or use it in a range of other ways. One site called topcashback.co.uk boasts that an average member earns £345 per year through their scheme.

    New site users often get bonuses like higher percentages, too, boosting your earnings in the early stages. It’s worth keeping in mind that you probably won’t get your payment the moment you buy something. In most cases, there’s a set amount of time to wait before you get your payout – often until after the return period’s over.

  • What happens if my circumstances change?

    Once you've set your Marriage Allowance up, you don't need to apply again unless your situation changes. Obviously, getting divorced means you can no longer make a Marriage Allowance claim, for example. The death of either partner will do the same, naturally enough. You can even cancel it yourself if you need to for any reason.

    Since there are income thresholds involved, a change in either your earnings or your partner’s can also affect your Marriage Allowance claim. For example, if you suddenly start making more than your Personal Allowance, you won’t have any extra to transfer to your spouse or partner. In the same way, if you find yourself bumped into a higher tax bracket, you no longer qualify to receive Marriage Allowance at all. When something changes in your circumstances and you’re not sure if you still qualify for (or benefit from) the Marriage Allowance scheme, talk to RIFT tax refunds to keep yourself on the right track.

    More on Personal Allowances

  • Check the sales

    The usual suspects like B&Q, Wickes and Selco will often put on sales, so it’s a good idea to stock up on supplies when you spot a good deal. If your job ends up requiring large amounts of any given material or item, grabbing them when they’re cheaper can bring down your overall costs quite a lot – even if you weren’t planning on getting the repairs or renovations done immediately.

  • Here's a quick checklist

    • The best thing is to have a record of all your spending in the form of receipts, meal tickets, email confirmations, bank statements or other records. If you haven't been keeping these then start now! If you aren't keeping a record of how you spent it so you can claim it back from HMRC you're throwing money away.
    • If you're heading out to a local shop, receipts are a good way to track your daily spending. The taxman loves receipts, so you should always hold onto them.
    • If you're using cash, getting a mini-statement from the bank machine you got it from can help show the money you've spent. For extra proof, taking a photo of the menu or price list can help support your claim as you may take £20 out of the wall but spend £7.35 on your actual food costs. 
    • If you're travelling to work on public transport, keep receipts for any food you buy onboard.
    • You can keep a food diary where you record what you eat and how much you spent every day.
    • Tell your work mates. If you've been missing out on the refunds you're entitled to, the chances are they have too! Getting them £250 back in their pocket as you wait in the meal line is better than buying them a quick cuppa because they’re short on cash that day. Even better - if they're not yet making a tax refund claim you could send them to use to get started and we'll reward you for everyone who claims with us.
  • What kinds of help can I get with childcare costs?

    Childcare support comes in a few basic flavours. You might be able to get tax relief on your pay, for example, or specific benefit payments to cover your costs. You could also claim completely free childcare places with approved organisations or “Tax-Free Childcare”, where the government tops up the cash you’re saving specifically for childcare costs. If you’re working PAYE, your employer might also have a scheme running to help out. As your circumstances change, the kinds of support to can claim might change, so it’s important to understand the rules.

  • What free childcare can I get?

    By law, you’re generally entitled to some free hours of childcare each year in the UK. What you can get depends on a few things, including where you live.

    In England

    • Your 3 and 4-year old kids can get up to 570 hours of free childcare a year.
    • This works out at about 15 hours a week for 38 weeks.
    • If you’re on certain benefits or other circumstances apply, any 2 year olds you have might also qualify.
    • If you're working you can sometimes claim an additional 15 hours of free childcare, for a total of 30 hours a week. As of the 2019/20 tax year, you (and any partner) need to be earning at least £131.36 a week for at least 3 months to qualify for this, assuming you’re over 25.
    • If you’re self-employed, you can sometimes average your earnings out over 12 months instead, or ignore the rule altogether in your first year in business. Again, if you’ve got a partner who can’t work for a valid reason, you might still be okay to claim the additional 15 hours.
    • If either of you is earning over £100,000 a year, though, you can basically forget about claiming.

    In Scotland

    • You can get 600 hours of early education or childcare a year for your kids aged 3-4.
    • If you’re on certain benefits or other circumstances apply, any 2 year olds you have might also qualify.

    Talk to your local authority or childcare provider about claiming your free childcare.

  • How does child benefit work?

    Child Benefit is generally for people with kids under 16, and comes in at a flat rate of £21.15 (set to rise to £21.80 from April 2022) a week for your first child. Additional children entitle you to another £14.00 (set to rise to £14.45 from April 2022) per week each. Only one person can receive the child benefit allowance for a child and it is paid every 4 weeks.

    If your child stays on at school past the GCSE level, you’re still entitled to Child Benefit until they turn 19. However, you won’t get that automatically unless you reapply for it. Your kids continue to qualify as long as they’re still in full-time “approved education”. This means A-levels (or equivalent), Scottish Highers, NVQs or vocational qualifications up to level 3, traineeships in England or home education (as long as they started it before turning 16). Certain types of “approved training” can also qualify for Child Benefit. Examples include Foundation Apprenticeships in England and Wales, Employability Fund programmes in Scotland and United Youth Pilot courses started before the 1st of June 2017.

    One additional little wrinkle to the Child Benefit system is the High Income Child Benefit Tax Charge. While Child Benefit isn’t means tested, this charge does start to kick in once either you or your partner is earning over £50,000 a year. The charge basically boils down to 1% of your Child Benefit for every £100 you earn over the £50,000 threshold. So, by the time you hit £60,000, you’ve burned through your entire Child Benefit amount and get nothing. The strange thing is that a couple each making £49,999 a year each would still qualify for full Child Benefit. However, another couple with one partner earning £51,000 and the other only £20,000 would get hit with the charge.

    You can start a Child Benefit claim here.

  • What childcare support can I get from Universal Credit?

    If you’re claiming Universal Credit, you could qualify for what they call the “childcare element” of the payment. There are a couple of basic rules on who’s eligible for this.

    Eligibility

    • You (and your partner, if you have one) need to be in work – or at least due to start paid work before your next assessment period ends.
    • If one of you can’t work for some reason (you’re caring for a disabled person or disabled yourself, for example), you might get an exemption from this rule.
    • You might also be exempt for a few other reasons - if you’re signed off work sick, for instance.
    • You also need to be paying the costs for your childcare yourself, and using an approved provider. 

    Amount of support available

    • As of 2019/20, the most you can claim for childcare in your Universal Credit payment is 85% of your costs.
    • The payment tops out at £646.35 for one child or £1,108.04 if you’ve got more, though.
    • To make your claim, just get in touch with the Department for Work and Pensions. You can do this online or by phone, and need to do it by the end of the next assessment period after you paid the childcare costs.

    For more on Universal Credit, look here.

  • How does tax-free childcare work?

    What is it?

    Under the Tax-Free Childcare system, you can get quarterly payments of up to £500 per child you have who’s 11 or under – to a maximum of £2,000 a year each.

    What can I use it for?

    Not just any costs can count for the scheme. Tax-Free Childcare can be used for things like:

    • Childminders, nurseries and nannies.
    • After-school clubs and play schemes.
    • Home care agencies.

    In every case, your provider needs to be signed up to the scheme to qualify.

    How do I apply for tax-free childcare?

    • You need to set up a specialised online account to get things rolling.
    • You need to be making at least the £131.36 per week (average out over 3 months) if you’re over 25.
    • Again, self-employed people with earnings that go up and down can still qualify. They can use an expected average for the current tax year if they need to.
    • For disabled children, the scheme’s available up to the age of 16, with a maximum government contribution of £4,000 per child per year. 

    How much can I get?

    For every £8 you spend on approved childcare costs the government pays £2 into your account – basically wiping out the 20% basic rate of tax on what you’re spending.

    Important things to note

    One thing to watch out for is that you can’t claim Tax-Free Childcare if you’re on Universal Credit. If you still qualify for older forms of childcare support (like Child Tax Credit or Childcare Vouchers), then you won’t be able to get Tax-Free Childcare on top.

    In some cases, you’ll be better off sticking with what you’re already getting, but it’s not always cut-and-dried. If you try to claim Tax-Free Childcare while you’re on tax credits, though, your tax credit claim will end.

    You can apply for Tax-Free Childcare online and to get more information about how to apply.

  • Are there any other forms of childcare I could get?

    If you’re a student, your college might have a Discretionary Learner Support scheme. You need to be at least 19 to qualify for this, and can use the money for things like childcare, accommodation, travel and course materials. What you can get depends mostly on where you’re studying. You can read more about this here.

    If you’re studying full-time in higher education, you might be able to apply for a childcare grant. This is on top of whatever other student finance you have, and because it’s a grant you don’t need to pay it back. Your kids need to be under 15 to qualify, or under 17 if they have special educational needs. Find out more here.

    If you’re under 20 yourself and studying, “care to learn” payments might be another option. If you qualify and are looking after a child, you could claim up to £160 a week per kid (or £175 if you’re in London). The cash is paid directly to your childcare provider for as long as your course lasts, or until your children no longer need childcare. Check here for more information.

  • What about older childcare schemes like childcare vouchers or child tax credit?

    The Childcare Voucher system used to let you take up to £55 a week of your wages in the form vouchers. The benefit of this was that you didn't pay any National Insurance or Income Tax on that portion of your earnings. The actual amount you could take this way was based on what you earned and when you signed up. When the new system came in, people already getting Childcare Vouchers had the option to stick with them. Anyone signing up after or changing to an employer that didn't support vouchers had to switch to the new system, though.

    As for Child Tax Credit, that’s one of the older benefits being replaced with the Universal Credit system. That means most people can no longer sign up for it. There are a few exceptions, though, so it’s always worth checking where you stand and what your best options are.

  • Counting the Cost of Christmas

    To slap some hard numbers on this, the International Monetary Fund (IMF) announced it was expecting UK inflation to average out at 10.5% in 2022. That's a big leap up from the 7.8% estimate it gave out just a few months earlier. Essentially, inflation means the pound in your pocket is dropping in value, and when the rate's high then everyday costs get harder to meet. With Christmas traditionally being a time when we all splash out a lot more, it makes good sense to start spreading those costs out as much as we can.

    Price comparison site Finder.com reckons that the average cost of Christmas is set to hit £1,023 per household this year. Given the typical 2022 family income after tax of £1,926, that means we'll be blowing over half what we're earning during the festive season on our Christmas shopping alone! All told, taking account for inflation, the country as a whole's probably looking at a total Christmas shopping bill of close to £7 billion for December 2022 alone, with many of us already months into our gift-buying by then. So who's spending all this cash, and what are they getting for their money?

    Averaging it all out, a typical British household will splash out something like £2,500 per month. According to statistics from the Bank of England (which likes to keep a close eye on things like this), that figure snowballs up by another £740 in the month of December—close to a third higher. Obviously, averages like that doesn't paint the whole picture. Depending on where you live in the UK, your likely costs could vary up or down a fair bit. In London, for instance, the typical Christmas spend was a whopping £1,746 per person in 2021! At the other end of the scale, people in the North East were spending around £994 each on average that year. That's still a lot of money to lay down, obviously, but it should give you an idea of the ranges we're dealing with.

    As for where all that cash is going—again, the Bank of England's taken a close interest in this. UK spending on books, music and video recording equipment basically doubles in December. Computer and phone sales jump up by over 60%, while the amount we're blowing on drinks (alcoholic or not) and tobacco rises by 38%.

    There's other stuff that goes down at the same time, though. For instance, December tends to see a pretty sharp drop (just over 20%) in things like paint and hardware. Chances are, this comes down to people putting off all those little DIY jobs around the house until after the Christmas decorations come down.

    Read our guide: Save money on home repairs

    Download our Christmas Budget Planner

  • Christmas in the UK: at a glance

    So, what does all of this add up to? Here's a quick run-down of what a typical British Christmas is looking like in financial terms:

    • Average spends vary up and down the country, but household spending tends to rocket up by about 29% in December as families rush into a festive financial frenzy at the shops.
    • Despite the December rush, we're actually kicking off our Christmas shopping sprees earlier each year. 1 in 3 of us has started stocking up by November, for instance. That sounds pretty impressive, until you realise that around 1 in 5 actually started shopping seriously 2 months earlier in September. In fact, almost 1 in 3 British Christmas shoppers has done at least some of their festive spending as early as August—so maybe those early Christmas displays in the shops aren't so silly after all…
    • As a country, the UK slashes around £7 billion on Christmas presents and preparations in the month of December alone. If you take the whole festive period into consideration, though, the actual total's closer to an incredible £24 billion.
  • Budgeting at Christmas

    Okay, so we've got a broad idea of what a standard Christmas is likely to cost us. How do we take control of those costs to make sure we don't spend the New Year neck-deep in debt? We've talked about making budgets in our guides before, and saving up for Christmas really isn't all that different from saving for any other large costs, like a used car or a house deposit. The key is to work out exactly how much cash you reliably have coming in, and to divide it up into your essential costs, your "fun money" and your savings. It's called the 50/30/20 rule, and it's the foundation of a really strong budget. You can get a head-start on your Christmas planning with our free online tool to show you how the system works.

    Free tool: Christmas Budget Planner

    Meanwhile, it'll be well worth your while considering other ways to bring your Christmas spend down a little.

  • Christmas budgeting tips

    1) Plan ahead and manage expectations

    Ideally, you ought to make a list (and check it twice) long before you head out to the shops or click on the Shop Now button. If nothing else, you could save a packet on your parcels if you're doing a lot of your buying at the same site. The more you buy at the same time, the easier it is to hit that magic free delivery target. While you're planning, consider setting a maximum spend with your friends and loved ones. Agree a figure in advance and stick to it. It'll save you from overspending—and avoid any awkwardness around the Christmas tree at the same time.

    2) Lay off the plastic, unless…

    The temptation to dump your whole Christmas on a credit card can be intense, but if you can avoid doing that you'll probably end up a lot better off. However, if you play the game well enough, there can be a plus side to whacking down the plastic once in a while. If you scout around for the best 0% interest deals on your cards, you can spread your Christmas shopping over a few months without racking up a load of plastic debt along the way. It takes a little legwork, but the pay-offs can be good. Just don't forget to clear your balance before the 0% deal expires and the interest starts piling up!

    3) Check out the cashback sites

    If you do most of your Christmas shopping online, then there's an interesting little wrinkle in the online sales landscape to look out for. A cashback site is a web page that will basically toss a little money your way when you pass through them on you way to your seller. You sign yourself up for a free account (and definitely avoid any that ask you for money up-front), then search the site for a seller you want to buy from. When you click through and make your purchases, the cashback site drops some credit into your account. The amounts are generally pretty small, but you're not buying anything you wouldn't have bought anyway and the benefits will stack up over time.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • What is the CIS scheme?

    CIS is a special set of tax rules for self-employed people in the building trade. Normally, when you file your own tax returns through Self Assessment, you get your pay with no tax deducted at source. As a construction subcontractor, however, the rules you follow are a little different. Under CIS, your contractor hacks off 20% of your pay before they fork it over.

    CIS covers most kinds of building work done in the UK. Site preparation, construction and dismantling, repairs and decorations are all included in the scheme, for example. Even businesses based outside the UK get caught up in the CIS system, if they do work in the country. It makes no difference if you're a contractor, a subcontractor or both. You'll still need to deal with CIS from one side or the other.

  • Why does CIS even exist?

    It all boils down to HMRC getting bent out of shape in dealing with tax fraud in the building trade. Basically, they decided there was too much dodgy “cash in hand” nonsense going on in construction and clamped down on it hard. The way they went about it means that your contractor coughs up a chunk of tax to HMRC directly, taking it out of your pay. It's like making an advance payment against the tax you'll owe, designed to make it harder for subbies to wriggle out of paying up. It's not super-popular, obviously, and can leave you badly in the lurch if it goes sideways. Even so, the taxman reckons it's worth the hassle if it chokes off the tax evaders.

  • What's the difference between a contractor and a subcontractor?

    People in construction tend to throw these terms around a bit in general conversation, but the CIS system draws some pretty sharp lines between them:

    • Contractor: generally, a person or business who pays subcontractors for construction work. That's a little vague, though. If you're a homeowner splashing out on a new kitchen or some roof work, for instance, HMRC won't be expecting you to deal with CIS deductions.
    • Subcontractor: a business that takes on work from a contractor.

    A lot of the time, you can end up being both a contractor and a subbie at once. For instance, this can happen if a business is contracted to do some building work, but then pays someone else to do some of it. At that point, you're getting 20% of your pay sent to the taxman by your contractor, and also sending him 20% of your own subcontractors' cash. It can get messy at times, so you're probably best off getting some expert advice if you're not 100% sure where you stand.

  • Getting set up for CIS: who and how?

    If you're a construction contractor, you need to register for CIS. The same goes for subcontractors who work for themselves, have their own Limited Companies or are in a partnership or trust.

    As for how you do it, step one is to jump on the HMRC website and sign up online. You'll need to have an account to sign into and your Unique Taxpayer Reference (UTR) number to hand. The actual forms you'll have to fill in depend on your business set-up (Sole Trader, Limited Company or whatever), but it should all be pretty straightforward. If you're new to the self-employment game and need to get set up, you can do that on the website as well. There's even a CIS helpline you can call if you need someone to walk you through it all.

    More on UTR numbers

  • Are there any exemptions for the CIS scheme?

    Generally speaking, if you don't register for CIS when you're supposed to, you can expect to see a full 30% of your wages vanish into HMRC's pockets before you get them! There's a chance you might be able to apply for what they call “gross payment status”, but the rules are sticky so don't count on it. If you do qualify, then you won't lose any of your pay through CIS deductions, but you'll still have to pay tax normally through Self Assessment and/or or the Corporation Tax system.

  • What are the main problems with CIS?

    Apart from the fact that you're paying tax on money you haven't been given yet, there are a few pitfalls and dangers lurking in the CIS system. For one thing, since you're paying tax from the very first penny you earn, there's a chance you might not be getting the full benefit of your tax-free Personal Allowance. That's one of the reasons why it's so important to get your Self Assessment tax returns right. There's a section in there to list all the CIS deductions you've had taken from your pay.

    Beyond that, there's obviously the very big danger of failing to get registered for CIS on time – or at all. That can easily see you losing 30% of your pay instead of the normal 20%. It's an easier mistake to make than you'd think, too. A lot of people get into trouble each year because they don't properly understand their employment status, and there's some seriously bad advice floating around out there. You might also be getting bad information from somewhere on how much to claim when you sort out your CIS tax return, which can lead to major hassle from HMRC when they catch up to you - which they eventually will.

    If you're on both sides of the fence as a contractor and subcontractor, working with CIS can be a strain on your cash flow. As we mentioned before, you'll be losing 20% of your pay – which is cash you probably need to pay your own subbies. Planning is the key here.

    Finally, you've got to watch out for the double taxation trap. If you don't send in your Self Assessment tax return on time, you can end up getting an estimated tax bill from HMRC. With CIS muddying the waters, it's not hard to find yourself getting a bill from HMRC when you've already paid your deductions. It's not usually too difficult to set things straight by getting the taxman the information he needs, but it's definitely a nasty situation to be in while it lasts.

  • Is it possible to claim a tax rebate online?

    Yes, you can claim your tax rebate online by logging into the gov.uk site with your Government Gateway User ID and password. If you don’t already have one of these, you can set one up, which should only take a few minutes if you’ve got your National Insurance number and a recent payslip, a P60 or a valid UK passport to hand.

    You’ll need to show HMRC some proof of all the work expenses you’re claiming a tax refund for. You’ll also need a few bits of crucial information, like details of the places you’ve worked in the years you’re claiming for. There are a lot of complicated rules about which kinds of expenses can earn you a tax refund, so talk to RIFT  if you’re not 100% sure where you stand.

  • Keep it clean, and think ahead

    When you’re buying property, it’s not just your own money you’re risking. You’ve got to keep in mind that your mortgage lender will need to think of you as a safe bet. A clean credit history’s a great step in the right direction – and paying down your debts before you start saving seriously will actually make the road ahead a lot less rocky.

    Speaking of keeping an eye on the future, don’t forget the extra costs you’ll be facing beyond your basic deposit and mortgage repayments. Solicitor fees, Stamp Duty and moving costs can all lump a lot of extra money onto your overall costs. Be sure to factor these into your budget so you don’t get tripped up later.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • The appliance of common sense

    Most people never realise how much their old household appliances are costing them each year. Energy efficiency’s become a really big issue in recent times, and a typical home can be a minefield of “hidden costs” if you’ve got the wrong gear installed. Let’s take a look at some of the usual suspects, and what you can do to get them up to date. 

    It's a great excuse to modernise your kitchen:

    • Your old dishwasher might not be pulling its weight any more. If you’re still struggling along with a D-rated machine, trading up to a modern A+++ one could see you bagging an extra £47 a year in savings.
    • The same thing goes for your washing machine. Swapping out your D-rated machine for an A+++ one could knock about £34 off your yearly energy bills.
    • Even your freezer could be adding to the energy you’re wasting. Stepping up from a C-rated device to a super-efficient A+++ one could be worth a massive £113 a year in energy savings. You don’t even need to go that far to see the benefit. Just going from C to A++ could still land you an extra £26 a year.
    • Here’s a nice little energy-saving dodge that most people don’t even know about. The head on your shower could be costing you a load of unnecessary money without you ever realising. It takes practically no effort to switch to a more water-efficient model, and the savings are pretty surprising. Overall, you stand to shave £30 off your yearly gas bill this way, along with saving a whopping £45 in water!
  • At the very least, it’s a great excuse to modernise your kitchen:

    • Your old dishwasher might not be pulling its weight any more. If you’re still struggling along with a D-rated machine, trading up to a modern A+++ one could see you bagging an extra £47 a year in savings.
    • The same thing goes for your washing machine. Swapping out your D-rated machine for an A+++ one could knock about £34 off your yearly energy bills.
    • Even your freezer could be adding to the energy you’re wasting. Stepping up from a C-rated device to a super-efficient A+++ one could be worth a massive £113 a year in energy savings. You don’t even need to go that far to see the benefit. Just going from C to A++ could still land you an extra £26 a year.
    • Here’s a nice little energy-saving dodge that most people don’t even know about. The head on your shower could be costing you a load of unnecessary money without you ever realising. It takes practically no effort to switch to a more water-efficient model, and the savings are pretty surprising. Overall, you stand to shave £30 off your yearly gas bill this way, along with saving a whopping £45 in water!
  • What about money I get that isn't ''earned'' - like gifts from family?

    The taxman likes to be kept up to date on any income you’re earning, but he’s not some crazed stalker prying into every aspect of your private life. Gifts from your parents or friends, student loans and grants don’t count as taxable income in HMRC’s eyes. The same goes for bursaries, scholarships and so on.

  • Is property income like rent taxable?

    Yes. If you’re renting out a room while you’re studying, then the taxman will want his bite of it. As always, any Personal Allowance you’re entitled to applies. You’ll probably end up filing Self Assessment tax returns to account for the income. However, depending on what you’re renting out, you might be able to use the Rent a Room scheme. Under Rent a Room, you can earn up to £7,500 tax-free a year from renting out furnished accommodation in your main home. Rent a Room is simpler for most people than working out their expenses in their tax returns. As long as you qualify for it, it can be a decent way to score some extra income.

  • Does pay from apprenticeships get taxed?

    Apprenticeships are a lot like training contracts, in that you’re working primarily to learn a trade or set of skills. However, apprenticeships are paid positions. That means you’ll be taxed through the PAYE system. Depending on how long your apprenticeship lasts, you might find yourself claiming back some PAYE tax from HMRC (if it’s less than a full year, for instance). Also, unless your employer’s paying or reimbursing all your expenses (travel to temporary workplaces, tool/equipment repair, and so on), you might be owed some tax back for those, too.

  • What's emergency tax?

    If your student job’s the first toe you’ve dipped into the taxman’s world, there’s a potentially nasty trap you need to watch out for. If HMRC doesn’t have enough information to issue you a PAYE tax code, your employer might lump you with an emergency one. In practice, it’s not really as bad as it sounds. It just means you’ll only be entitled to your basic Personal Allowance. For most people, that’s all they’d probably get anyway. However, an emergency code is bad news if you ought to be getting any allowances or tax reliefs - like the Blind Person’s Allowance, just to pick an example.

  • What are tax breaks?

    Tax breaks are another term for tax relief. HMRC has various systems in place to help people and businesses bring down the tax they're paying under certain circumstances. For example, when you're reaching into your own pocket for things like travel to temporary workplaces, you can claim back some tax on your mileage expenses. Everything from individuals washing their work uniforms to businesses conducting cutting-edge R&D can qualify for some kind of tax relief. The key to getting the best from these systems is to know exactly what you qualify for, and how to claim it back.

  • Is there anything more I can claim if I work CIS?

    If you're self-employed and paid through the Construction Industry Scheme (CIS), you're probably due a tax refund.

    You can also claim back a range of job-related expenses, including travel, meals, lodging, parking, tolls, tools, protective clothing, public liability insurance, phone bills, postage and stationery.

    We’ll assess all your expenses and include them if they qualify. That way you'll be certain that everything on your claim is a genuinely allowable expense and you won't find HMRC knocking on your door asking for their money back. If you're a RIFT customer, you'll be covered by our RIFT Guarantee as well, so you've got even more peace of mind.

    Sadly there are a number of unscrupulous tax refund advisors taking advantage of CIS workers at the moment. 

    If you want to see how much you could be due back from HMRC use our Tax Calculator and find out in seconds.

  • Does a CIS Tax Refund include my self assessment tax return?

    Yes it does. All self-employed people, including CIS workers, have to complete a tax return every year. The tax year ends on 5th April and you’ve got until 31st January the following year to send your tax return to HMRC.

    Read more about Tax and the Construction Industry Scheme

    At RIFT we complete your tax return for you, and claim your tax refund at the same time. Just tell us where you’ve worked, and when, and we’ll work out the cost of your travel. We’ll add any other job-related expenses you may have and fill in the tax forms for you, all you need to do is sign them.

    We’ll send the forms to HMRC, handle any questions on your behalf and chase them if they don’t pay out in the agreed timescale – it’s all part of our service.

    95% of our CIS customers get a tax refund, and the average value of the refunds is £2000 per year.

    Use our tax calculator to find out how much you could have waiting for you at HMRC.

  • Can I still claim a CIS refund if I applied for a government loan scheme?

    Yes you can! The Self Assessment system is all about settling up fairly with the taxman. Any money you received from The Self Employment Income Support Scheme will be treated as taxable income on your Self-Assessment. Whether or not you get a government loan to see you through the COVID-19 outbreak, you’re still owed the rules covering CIS tax refunds are the same as before. Paying tax under the Construction Industry Scheme can mean you’re not getting the full benefit of your tax-free Personal Allowance so you should always make your claim.

    Covid-19 Support

  • What is Self-Employment Income Support?

    The Self-Employment Income Support Scheme (SEISS) is designed to help self-employed people get through the COVID-19 crisis. The 5th grant changed the playing field slightly for businesses hit by the COVID-19 pandemic. This grant covered the period from the start of May 2021 to the end of September 2021. If you qualified for a previous grant and your business was still suffering because of the pandemic, you should have been able to make a claim.

    For the 5th grant, what you received depended on how badly your turnover had been damaged:

    • If your turnover had dropped by 30% or more, you’d have received 80% of your 3-month average trading profits.
    • If your turnover had s gone down by less than 30%, you’d have received 30% of your 3-month average profits instead.

    Because the grant amount was based on your turnover, you obviously needed some figures to show HMRC. The first thing you needed was your turnover total from either the 2018/19 or 2019/20 tax year. You should have easily been able to find this in your Self Assessment tax returns.

    The other thing you need was your turnover from the 2020/21 tax year to compare. Again, your Self Assessment tax return’s ideal for this. If you haven’t already talked to RIFT about submitting your 2020/21 return, time’s running out. The official Self Assessment deadline isn’t until the 31st of January. However, if you’re going to use your tax return to show your turnover for 2020/21, you’ll have needed to have it squared away before the SEISS claim deadline of the 30th of September 2021.

  • How long does a CIS tax refund take?

    CIS tax rebates generally take about 4-10 weeks for HMRC to process. RIFT’s CIS refund service includes handling your Self Assessment CIS tax return and full aftercare throughout the year, with no hidden fees. With RIFT, you get the very best from your claim, as fast as possible and with no expensive hourly rates to cough up. One simple fee takes care of everything.

    HMRC’s not known for its blistering speed, but there are a few things you can do to keep the wheels turning on your claim:

    • Get the 64-8 form we send you sorted out as soon as possible. We need it to talk to the taxman for you.
    • Use our calendar of key days to steer clear of HMRC's busiest periods.

    RIFT’s expert teams will make sure there's no hold-up at HMRC. That means no endless waits on HMRC helplines and no dangerous mistakes creeping into your claim. We'll even chase up old employers if they're dragging their feet in sending the information we need. Once you’re happy with the amount we’ve calculated for your rebate, we’ll chase up HMRC until it’s paid out in full. Meanwhile, we take expert care of you all year round, and we’re never more than an email or phone call away. As always, everything's covered by our RIFT Guarantee. As long as you've given us complete and accurate information, your rebate is protected.

    START MY CLAIM

  • Do most CIS workers get their full tax rebates?

    When you file your own Self Assessment tax returns, it's easy to miss out on CIS claims or make costly mistakes. Under the CIS scheme, your employer takes tax directly from your pay before you get it. This almost always means you're instantly losing 20% to the taxman. As a result, you’ll probably find you’ve been overcharged by HMRC when you file your Self Assessment tax return.

    It takes specialist understanding to claim tax back for CIS construction workers. Every year, far too many people are still shelling out tax they don't owe. In the worst-case scenario, they don’t get any CIS tax rebate at all. Even if they do, it’s often nowhere near as much as they deserve.

    START MY CLAIM

  • Does my CIS Tax Refund include my Self Assessment Tax Return?

    Yes! All self-employed people, including CIS workers, have to complete a yearly Self Assessment return.  The tax year runs until on 5th April, then you've got until the following 31st of January to complete and file your tax return.

    With RIFT, filing and completing your CIS tax return is all part of our tax rebate service. Armed with a list of your workplaces for the year and a few more details, we'll work out the cost of your travel and what you’re owed for it. Next, we'll add any other essential expenses you’ve had and sort out your paperwork.

    We'll send the forms to HMRC, handle any questions on your behalf and keep chasing the taxman until your rebate’s paid. 95% of our CIS customers get a tax refund, with an average value of over £2,245 per year.

    TAX RETURN QUOTE TAX CALCULATOR

  • What are the penalties for late CIS filing?

    The taxman really doesn’t like waiting. Miss the filing or payment deadline by a single day and you'll get an immediate £100 penalty. At 2 months late, that fine doubles. At 6 and 12 months late, it reaches £300 (or 5% of the CIS deductions on the return, if that's higher). Any longer and you might face an additional penalty of £3,000, or 100% of the CIS deductions on the return.

    Of course, with RIFT on your team, you’ve got nothing to worry about. We’ll keep you in the taxman's good books and make sure you never miss out on your CIS tax claims - even the ones you didn’t know you qualified for!

  • How do I register for CIS?

    You’ll need a few bits of information about yourself to register for the Construction Industry Scheme:

    The CIS scheme covers most of the construction work done in the UK. If you’re self-employed in the building trade, you’ll almost certainly have to register for it. Contractors will need to verify their subcontractors, handle their CIS deductions and file monthly CIS returns.

    If you’re a subcontractor and don’t sign up for CIS, it doesn’t mean you won’t have the deductions taken from your pay. In fact, you’ll probably actually lose even more of your money, since the rate goes up to 30% for people who aren’t CIS-registered. It’s possible that you qualify for “gross payment” status, where you don’t have to pay CIS deductions. Don’t count on that, though, as there are specific rules and conditions to meet.

    One of the problems with CIS is that it's very easy to end up paying too much - and you won't get an automatic refund. To claim your CIS rebate, HMRC demands proof of what you’re owed. This is what RIFT Tax Refunds is all about, so get in touch to see how we can help.

    Remember that CIS covers all UK construction work, even if it's done by foreign firms. There are penalties for filing late, so you have to stay on top of the paperwork. 

    Start my claim

  • What is a CIS card? What kinds of cards are there?

    When you register with the Construction Industry Scheme, you get a card. The kind you’re given depends on your situation:

    • CIS A(P): Most subcontractors get this. It shows that you're eligible to have CIS tax deducted by your employers, and it doesn’t expire.
    • CIS 4(T): A temporary version of the card above. You'll probably only get this if you didn't know your National Insurance number when asked. Once you have your NI number, you'll be upgraded to a permanent card.
    • CIS 5: This is for companies that can't get a CIS 6 certificate, but still qualify for gross payments.
    • CIS 5 (Partner): This is the version of CIS 5 for partners in firms.
    • CIS 6: You can get this card if you're an individual, partner or director who qualifies for gross payment status. You qualify based your turnover, the kind of business you're in and how well you follow HMRC's rules.
  • What work does CIS cover?

    For most general contractors in the UK building trade, the CIS scheme's compulsory. It includes everything from site preparation and repairs to decoration and demolition. There are a few exceptions, though. For instance, if you’re a contractor who only deals with very limited sections of the work (like carpet fitting), you may not have to register.

  • Does CIS apply to business outside the UK?

    CIS covers all construction work done in the UK, even when it's done by foreign firms. The registration system is a little different, but all the basic rules are the same. The UK has some ''double taxation'' agreements in place with various other countries to reduce your total tax when you're paying in both countries. Talk to RIFT if you need help working out what it all means for you.

  • What is the CIS tax deduction rate?

    The standard Construction Industry Scheme tax deduction is 20%. If that sounds like HMRC's taking a huge lump out of your pay, then it only gets worse if you don’t sign up to the scheme. If you haven’t registered, the rate shoots up to 30%! This can also happen if you don't give your employer your Unique Taxpayer Reference number (UTR). Your UTR is used by HMRC to identify you. If your employers don't have it, the taxman might assume you aren't registered for CIS and charge you the higher rate.

  • How do CIS tax deductions work?

    CIS tax deductions are payments your employer takes out of your wages before you get them. Those payments go straight to HMRC instead of you. They're supposed count as advance payments toward your tax and National Insurance, clamping down on tax evasion in the industry. Unfortunately, one of the side-effects of CIS is that a lot of honest people end up being charged too much tax. At RIFT, our friendly teams of CIS experts can quickly tell you if you're due a tax rebate, then make sure you get it.

  • What is a Construction Industry Scheme payment and deduction certificate?

    A Construction Industry Scheme Payment and Deduction statement is a record of the money you've been paid and taxed on if you work under the CIS scheme. You might also just call them wage slips, payslips or something similar.

    If you're self-employed in construction, they're some of the most important documents you'll ever have. When you file your yearly CIS tax return, you'll need these statements to prove what you've earned and paid. You should get a CIS Payment and Deduction statement from your boss whenever you’re paid, within 14 days of the end of the tax month.

  • What do I need my CIS payment and deduction statements for?

    The main thing you'll need your CIS certificates or wage slips for is filing your yearly Self Assessment tax returns. The taxman will expect you to show him a record of all the cash you’ve got coming in. With the CIS taking 20% of your pay before you get it, you’re probably not getting the full benefit of your tax-free Personal Allowance. You’ll be hard-pressed to prove that without your CIS paperwork to back up your claim, though.

    CIS Tax Returns

  • I only work for 1 company and my pay is taxed before I get it so am I PAYE or CIS?

    Employment status is a huge issue in construction, and it can get very complicated with so many layers of contractors, subcontractors, agencies and so on. You might think you’re working under exactly the same conditions as your PAYE workmates, but the taxman could well take a different view.

    The first thing to do is check your payslips. If they say “CIS statement” and show 20% deductions being made, then you’re being taxed through CIS. If that seems wrong, you need to talk to your employer fast.

    The CIS scheme is only for construction, and its rules can catch out even experienced self-employed people from other industries. If you’ve got self-employed mates from outside of construction, be careful taking Self Assessment advice from them. They might not know the territory as well as they think they do. Play it safe and talk to the experts at RIFT instead.

  • Who counts as a CIS contractor or subcontractor?

    In construction, a contractor is a person or business supplying materials or labour for a job. On the other hand, a subcontractor is anyone who does construction work for a contractor. Basically, according to HMRC, you're a contractor if you pay subcontractors for construction work.

    You can also count as a construction contractor if your business doesn't do construction work, but still spends an average of over £1m a year on construction in any 3-year period. Either way, you’ll need to register for CIS and start taking deductions from your subcontractors’ pay.

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  • What must I do as a CIS contractor?

    As a contractor, you need to register for CIS before you even take on your first subcontractor. You're going to have a lot of responsibilities under the scheme, so get used to minding the details. Here's what you need to do:

    • Get registered. You can do this online, but it can take up to 2 weeks to sort out. Make sure you allow for this time before taking on any subcontractors. You can sign up as a Sole Trader, a Limited Company or a Partnership. Remember, you need to do this even if you're based abroad.
    • Verify your subcontractors with HMRC to check that they're in the CIS scheme. Again, you can do this for free on the HMRC site. In addition to the information your subcontractors give you, you'll need to enter some basic details about your own business.
    • When you start paying your subcontractors, you'll make deductions from their pay for CIS. The rates are 20% if they're registered for the scheme, or 30% if not.
    • Make sure you're working out the gross pay correctly. Charges for things like VAT, materials and equipment aren't included.
    • Pay the CIS deductions to HMRC. They'll have set you up a payment scheme when you registered.
    • File your monthly CIS returns. There's an online tool for this, or you can use commercial software. These have to be spot-on, with up to £3,000 penalties for giving the wrong employment status for a subcontractor.

    Start My Claim

  • What sort of tax relief can I get as a subcontractor?

    Subcontractor tax refunds can be tricky. It’s easy to miss out on money you’re owed - or even get put off from claiming altogether. Even pricey accountants can find themselves tangled up in the system if they don't know the construction industry well. RIFT Tax Refunds has been specialising in construction rebates since 1999. There really are no safer hands to be in.

  • How do I qualify for gross payment status?

    Gross payment status means that no CIS deductions get taken out of your pay. There are 3 basic tests to see if you qualify:

    • The turnover test: Do you have a net annual turnover of £30,000+ for 3 continuous years?
    • The business test: Are you in a business that qualifies for gross payments? In general, that means construction work. You also have to do business through a bank account and keep proper records.
    • The compliance test: Do you have a spotless track record of paying all your tax and hitting all your deadlines?
  • Do I pay tax if I'm CIS?

    Yes, you will pay tax “at source” (your tax is taken off your wages before you get them), most likely at the rate of 20% of your income.

    However, this doesn’t mean you are “employed”. You still count self-employed under CIS – even if it doesn’t feel like it. The big difference is that this means you'll still have to do Self Assessment each year. Not filing those tax returns each year brings three very serious problems your way:

    • You're not getting your tax-free Personal Allowance.
    • You're not getting any of the tax relief you're entitled to for your work expenses.
    • HMRC's going to come after you for failure to file!

    If you're getting CIS statements and don't understand why, get in touch with RIFT straight away. We can explain the system, make sure you aren't paying too much tax and keep you out of trouble with HMRC.

  • I'm self-employed, but I'm not getting any CIS statements from my contractor. What should I do?

    There are strict rules for CIS contractors about payment and deduction statements. They need to send you one every time you're paid, with specific deadlines to hit.

    If you haven't been receiving yours, don't panic. It may just be a simple admin mix-up. Get in touch with your contractor and ask for your certificates, so you can keep your Self Assessment records up-to-date.

    Don't just ignore the problem. If it turns out your contractor's not been doing things correctly with HMRC, things could get awkward for you in a hurry, come the end of the tax year. If you still have no luck, come to RIFT for advice and help. We're experts in sorting out tax problems for UK construction, and we'll get straight to work.

  • Do I need to do a tax return if I'm self-employed?

    If you're self-employed in any kind of business, you'll almost certainly be using Self Assessment to pay your tax. In the construction industry, you'll probably also have to deal with the Construction Industry Scheme (CIS). Subcontracting under CIS means your Self Assessment filing has a couple of extra points to consider. If you don't understand the system, it's easy to end up paying a lot of extra tax you don't owe. If you think you are due a tax rebate check out our CIS tax refund pages.

  • I work CIS. Can I pay someone to take on jobs for me?

    Self-employed CIS workers can sometimes pass work on to other people. However, there are strict rules about doing this, and breaking them can lead to serious trouble. HMRC has a real problem with people in CIS work paying cash-in-hand for others to do jobs for them. It doesn't matter if you're passing the work on to friends, colleagues or family. You still have to follow the rules.

  • What are the rules for passing CIS work on?

    The first thing to know is that passing your CIS work on makes you a contractor in HMRC's eyes. That means you have to register yourself to avoid serious trouble from the taxman. You can't just slip someone a fistful of banknotes on the sly and sort things out later. You need get yourself registered before you take on your first subcontractor.

    After that, you need to be sure your subcontractors are signed up for CIS. When you pay your subcontractors, you have to take CIS deductions from their pay and send them to the taxman. You'll also need to file returns every month and keep detailed CIS records. If you slip up, or ignore the regulations altogether, you're looking at some painful penalties.

  • Can I claim the money I'm paying subcontractors as a business expense?

    As long as you're following the rules, then the cash you're paying the people you give the work to counts as an expense. That means it will bring down the amount of profit you're paying tax on. If RIFT is handling your tax returns, of course, we'll handle all of this for you as part of the service. 

  • What happens if HMRC launch an enquiry into my CIS returns?

    If you've been passing some of your CIS work on, then you need to have good records to show the taxman. HMRC will expect to see detailed evidence of the wages you've paid out, for instance. In addition, they'll also want to see the details of the people doing the work for you. Names, addresses and their Unique Taxpayer Reference numbers will all be needed. Again, RIFT will handle all the sticky HMRC business for you to keep you within the regulations and out of trouble.

    RIFT was first founded to help construction workers tackle the taxman. We've grown a lot since then, but we always remember where we started. We're still the leading experts on taking care of the UK's construction industry. We're on great terms with HMRC, and know the business inside and out. Whatever tax problems or questions you've got, talk to RIFT.

  • The Self-Employment Income Support Scheme

    The Self-Employment Income Support Scheme (SEISS) is designed to help self-employed people get through the COVID-19 crisis. With the 4th round of SEISS grants, the rules on who qualifies were loosened up slightly. You should be okay to claim if:

    • You filed a Self Assessment tax return for 2019-20 by the 2nd of March 2021.
    • Over half of your earnings come from self-employment.
    • You’ve been making under £50,000 a year on average over the last 3 years.
    • Your business has suffered significantly as a result of COVID-19.

    The 4th SEISS grant pays out 80% of your average profits over 3 months, capped at £7,500, worked out using your last 3 years of profits. If you became self-employed more recently than that, only your time in self-employment will be used to make the calculations.

    A final SEISS grant is coming later in the 2021, to be claimed from around the end of July. Only people who’ve seen a 30% drop in their average turnover will get the full 80% pay-out (capped at £7,500) this time. If your turnover’s dropped by less, you’ll get a 30% grant level instead, capped at £2,850.

    If you’re eligible for a SEISS grant, you should be contacted by HMRC with instructions and a personal claim date. See our FAQ here for more about the scheme.

  • Consumer credit

    With consumer credit, we’re talking about the kind of thing you’re most likely to run into on the average high street. This is where the customer is allowed to delay the cost until a later date for any goods, services or even money they’re given now. There’s typically some kind of charge for this.

    Consumer credit deals are the kind of thing you tend to see with ‘hire purchase’ agreements, vehicle finance, credit insurance or personal loans. The consumer can be offered the deal based on how ‘credit-worthy’ they are – basically just meaning how likely the business thinks they are to be able to afford the repayments. The rules are usually pretty much standardised for those who qualify. A fairly typical example of a consumer credit deal is an ‘equated monthly instalment’ agreement, where you pay back a set monthly amount to cover the overall cost (plus interest). Another common example is an overdraft facility on a bank account.

  • Getting the conversation started

    All of this can leave people who are dealing with mental health and money issues isolated and suffering alone. They feel guilty buying the things they can actually afford, and depressed about the things they can’t. At the same time, those feelings can stop them from asking for help, support or even advice.

    That last point’s one of the most important. It can be incredibly hard to start conversations about money and mental health, whether you’re suffering yourself or seeing the signs in someone else. The critical thing to understand is that it’s not a failure to ask for help or accept the support that’s offered. Everyone has a right to have their essential needs met – and there are resources out there dedicated to making sure that right is respected.

    The longer you leave it before speaking up, the more of a habit it becomes to try and “tough it out”. Just like financial trouble, not every mental health problem comes at you in a big rush. Sometimes, it’s the slow build-up of pressure that weighs you down most over time, particularly if it’s not just yourself you’re looking after.

  • Conveyancing fees

    Buying a house comes with a hefty stack of paperwork attached, and dealing with that paperwork costs money. What we call ‘conveyancing’ covers a lot of these fees, which you’ll run into at pretty much every stage of the purchase process. All told, your conveyancing costs (including solicitor’s legal fees, exchanging contracts, etc.) will tend to average out at around £1,040 if you’re a buyer and £1,000 if you’re a seller. Those numbers are based on a typical freehold property price of £277,000.

  • Cosmetic Car Mods

    Looking to add some visual flair to your vehicle? Here are a few good options:

    • Tinted windows (£150+)

      These mods are always popular. They look cool and can help filter out harmful UV rays from the sun. Depending on the kind of tint you use, they can even help make the glass more resistant to shattering. Just keep in mind that there are laws covering how tinted your windscreen and windows can be (see later).

    • LED strip lighting (£10+)

      Fancy adding a sci-fi vibe to your vehicle? LED lighting’s a really simple and effective way to add some instant visual appeal to the interior of your car. Modern LEDs are super-bright and cheap to run. Watch out, though – there’s a big difference between a few decorative LEDs and those big external neon tubes. You can sometimes get away with adding a neon under-glow to a vehicle in the UK, but there are restrictions on everything from placement to colour.

    • Stem valve caps (£10+)

      A simple, no-fuss cosmetic mod that you can pick up for a few quid and fit yourself. No, it’s not the flashiest alteration on the list, but there’s an extra upside to stem valve caps. They actually make the tyres more resistant to deflating. They look cool and your car gets safer on the road, so why not?
  • Utilities

    The exploding cost of energy’s sent a shockwave through basically all of our family finances. On average, UK households are burning through an incredible £2,500 per year on gas and electricity – essential utilities we really can’t go without.

    The November 2022 Autumn Statement announced that the Energy Price Guarantee would be kept in place for another year after April 2023, but would be a little less generous going forward. The cap originally aimed to limit average energy bills across the UK to £2,500 per year. However, after April 2023, typical household bills will be capped at £3,000 instead, which is going to be a painful blow to many families.

    When you’re managing your energy use, it’s important to realise that a few small changes you can reliably stick to are usually worth more in the long run than a single big one that you can’t. For example, even clicking your main thermostat down by a single degree can save you anything from £55 to £90+ over the course of a year, depending on the size of your home. The odds are, you won’t even feel the difference in temperature day by day, but you’ll be taking some real heat off your wallet.

    There are lots of small changes you can make around you home to bring down your energy bills, and most of them are so simple you’ll barely even notice them. However, they’ll all combine into some serious savings over time. Check out our guides below for more on how to keep your energy spending under control.

    6 ways to save on gas & electric bills

    7 heating bill hacks

  • Food

    Food bills are another everyday cost where small changes can add up to big savings over time. On average in the UK, households are splashing out £3,312 on groceries alone each year. That doesn’t even include the food we buy from takeaways or eat in restaurants, either. Add those in and the figure leaps up to over £5,000!

    Bringing down your yearly food costs doesn’t actually have to mean buying less food – although if you find yourself throwing away a lot of out-of-date food waste each week you could probably do yourself a favour by not buying things your family won’t get round to eating. The real trick to trimming the fat off your supermarket bills, though, is to make full use of the range of retailers and discount schemes on offer. Aldi, for instance, prides itself on keeping its prices super-competitive by staying efficient and stocking a lot of own-brand goods. In fact, about 90% of what Aldi sells is “private brand”, cutting down on their costs and passing some of what they’re saving on to their customers.

    Another thing to look into is whether your favourite supermarket has a loyalty card scheme running. Tesco’s Clubcard can be great for bagging a few bargains, for instance. Just be sure that those “unmissable” deals aren’t convincing you to buy things you don’t actually need. Even small discounts can be valuable if they’re on things you have to buy regularly.

    Now we come to those little extras we all love. We’ve already seen how a typical British family munches through an average of over £1,700 of takeaways and restaurant meals per year. There’s absolutely nothing wrong with treating yourself and your loved ones once in a while, but if the cost’s becoming a problem, you can still get the full experience by cooking “fakeaway” classics using free recipes from the web. It’s easier than you’d think, and can even be more fun if you get the whole family involved.

  • Travel

    About half of UK households have been deliberately cutting back in their non-essential travel recently, and it’s easy to see why. Travel costs can pump your yearly expenses up by a lot, particularly if you’re driving or using public transport for your work. As fuel and ticket prices continue to rise, every mile matters even more.

    If you’re not using your own wheels for your essential journeys, always check out the kinds of discounts your journey qualifies for. It’s true, the choice can be a bit baffling if you’re not used to sorting through your options. There are 9 different types of railcard alone to pick from, depending on the travel you’re doing. Once you’ve got it figured out, though, you could be looking at a discount of at least a third on your overall costs.

    If you’re a London traveller and use public transport a lot, make sure you grab yourself an Oyster card. The great thing about these is they set a hard cap on how much you’ll have to spend on any given day. You can use them on the London Underground, the buses and most of the national rail services in London. About the only thing to watch out for is whether you’re actually saving money compared to your other transport options. Even with the various discounts you can get, you might still end up paying more than if you’d used your own transport. Obviously, your best option will depend on where your travel takes you. Petrol alone is costing the average UK driver over £1,400 a year, so make sure you cost out your various options before making a decision. A little legwork up-front could pay off in a big way over time.

  • Debt and defaults

    As the cost of living goes up, it’s no big surprise to find so many of us struggling to stay out of debt. If you haven’t been managing your household budget carefully enough, just one unexpected cost or financial setback can leave you needing an emergency cash boost that could end up making things even worse. Over 1 in 4 people surveyed in the UK say they’re now having to lean more heavily into loans or expensive credit card deals to cover their day-to-day costs than they did a year back.

    When you’re stacking up debts, every other money decision you make gets more difficult. Even if you’re able to save a little cash regularly, the interest on your debts will almost always pile up faster and higher than it will on what you’ve put away. This makes you poorer over time in real terms, even if you’re making a real effort to save. That’s why, wherever possible, it’s a smarter move to pay down what you owe before you try to stock up any savings. At the very least, you want to be able to cover the minimum payment amounts on your debts each month so they don’t get out of control. Not only will this help keep your overall finances more healthy, but it’ll also protect your credit score if you need to borrow in the future. Over 2 million people are currently finding themselves falling behind on at least one crucial payment each month. We’re talking about the really important bills here, like rent, mortgage repayments or high-interest credit card balances. These are the kinds of things that can damage your credit score as well as your bank balance, so it’s incredibly important to stay on top of them.

    One thing that really does work is learning how to set up, and stick to, a household budget. Basically, all you have to do is work out exactly how much cash you have reliably coming in each month, and then divide it up to cover your costs.

    Those costs get sorted out into categories, with a set percentage of your income going into each, like this:

    • 50% of your income goes toward essential costs like loan repayments, rent or your mortgage.
    • 30% goes toward the “fun stuff” you could probably live without, but shouldn’t have to.
    • 20% is left over to save.

    For pretty obvious reasons, this is called a “50/30/20” budget, and it’s a system we’ve talked about before in some of our other guides. If you’re new to setting up budgets, it’s a great place to start. We’ve even got a free tool  you can use.

    Free budget planner

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Energy Bills Support Scheme

    All households with a domestic electricity connection in England, Scotland and Wales qualify for a discount on their energy bills. It’s a £400 non-repayable discount to help out over the winter.
    The payment is automatic. So, if you get an email or message that looks official asking for your bank details – don’t reply! It’s a scam.

    And you’ll still get the discount if:

    • you change your payment method
    • you change your tariff
    • you switch electricity supplier
    • you move to a new address
    • your supplier goes bust
    • you’re in arrears on your electricity bill payments

    You don't need to do anything. Your discount will be applied to your household electricity bills, starting in October 2022, for 6 months. So you’ll get £66 off in October and November, and £67 off in December, January, February and March.

    The discount is applied monthly, even if you pay quarterly or use a payment card. Direct debit customers will get a reduced direct debit OR a refund if the direct debit has already been collected.

    If you pay by standard credit or payment card, your discount will be credited to your account the first week of the month.

    Smart prepayment meter customers will get a credit to their meter the first week of each month.

    Traditional prepayment meter customers may get an automatic credit when they top up, or vouchers by email, SMS text or post.

    Your supplier should be in touch with more information before the scheme starts.

    Useful to know...

    Anyone struggling with energy bills should know that suppliers MUST offer payment plans that people can afford. Contact your supplier to find out more. Also, if you have a prepayment meter and are unable to top up, you can ask for emergency credit.

  • £200 household support scheme

    The Household Support Scheme has been extended and will run until March 2023.

    This big pot of money has been distributed to councils across the UK who decide how much each eligible person can get. Eligible people are residents who are most in need of financial help to cover the rising cost of things like food and energy.

    £200 is the reported amount however the actual calculation may vary depending on your circumstances.

    Find your local council website here by entering your postcode. Then search your council’s website for ‘Household Support Fund’. This will tell you how funds are allocated and help you decide if you are eligible.

    Citizens Advice provides free help to people in need. The organisation can help you find grants or benefits, or advise on rent, debt and budgeting.

  • £650 payment for low-income households

    More than 8 million households across the UK are receiving a payment of £650 in two instalments.
    If you get Universal Credit, Tax Credits, Pension Credit or legacy benefits, you are eligible for the payment. And you should receive it automatically.

    The Department for Work and Pensions (DWP) will pay the money straight into your bank account. The first payment went out in July and the second in the autumn.

    If you haven’t received a payment and think you qualify, you can find out more here. Or call HMRC on 0345 300 3900.

  • £300 for pensioners

    Around 8 million pensioner households will also get an additional £300 – paid out with their Winter Fuel Payment (WFP) in November or December. You don’t need to do anything. If you’re over state pension age of 66 in the qualifying week (19th-25th September 2022) and in receipt of the WFP, you should receive the payment automatically.

    If an older person relies on you to help manage their personal finances, you can reassure them the payment is coming. Also make sure to tell them not to respond to any official-looking emails or text messages asking for their bank details.

    The government has said that no one will be asked for their bank details and its important to remember that scammers will use any opportunity to strike. Vulnerable older people are particularly at risk so it’s vital to stay vigilant.

  • Claim tax relief

    Do you work from home?

    If you work from home for all or part of the week, you may be able to claim tax relief on additional household costs. You can only claim tax relief if your job requires you to live far away from your office or your employer does not have an office. You can’t claim tax relief if you have chosen to work from home.

    WFH tax relief

    Do you pay for uniform, work clothing or tools?

    You may be able to claim tax relief on the cost of repairing or replacing small tools you need for your job, or repairing or replacing specialist clothing (a uniform or safety boots, for example).

    Uniform tax relief

    Do you drive your own vehicle for work?

    If you use a car, van, motorcycle or bicycle for work, you might be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your own vehicle.
    How much you can claim depends on whether you’re using your own vehicle or your employer’s.
    You can’t claim for travel to and from work – unless it is a temporary place of work.

    Work mileage tax relief

    Do you pay professional fees and subscriptions?

    If you must pay membership fees to be able to do your job, or pay annual subscriptions to approved professional bodies or societies, you can claim tax relief on these. You can’t claim tax relief on fees or subscriptions your employer has paid or to organisations that are not HMRC approved.

    Professional fees & subscriptions tax relief

    Do you pay travel and overnight expenses?

    If you have to travel for work (not to work) you might be able to claim tax relief on things like food or overnight expenses, hotel accommodation or public transport, congestion charges and tolls, parking fees, business phone calls and printing costs.

    Travel & expenses tax relief

    Have you bought other equipment?

    You can claim tax relief on the full cost of substantial equipment you need to do your job. A computer or laptop, for example. These things qualify for a type of allowance called an annual investment allowance.

    Equipment tax relief

  • Which costs count toward healthcare claims?

    The first thing to understand about healthcare tax refunds is that not every mile you travel or pound you spend will count toward your claim. A daily commute to a permanent workplace, for example, won’t earn you any tax relief. To qualify for a refund, your work travel needs to be to and from what HMRC calls “temporary workplaces”. In practice, this generally means anywhere you work for less than 24 months. So, for example, a nursing job that requires you to travel out to patients’ homes could end up making you eligible for a pretty decent tax refund. Meanwhile, travel expenses can also include some subsistence costs while you're on the move. Things like accommodation and food can all contribute toward your claim.

    There are also a few tricky points to consider. If you're travelling to a number of hospitals or clinics within the same general area, with your mileage and travel times not changing much, HMRC might consider the entire region your “permanent workplace”. It's always best to get professional advice in situations like these.

    Rotational contracts, where you're working full-time at a series of hospitals over a period of years usually won't qualify. However, if your training takes place under, for example, a single 5-year contract, then things changes. In that case, each hospital you work at will count as temporary because it's a single employment with multiple temporary workplaces. The regulations are easy to trip over here, so it's often a good idea to get professional help.

    If you're already getting some of your costs reimbursed by your employer, you may still be owed tax back. HMRC has set rates for Approved Mileage Allowance Payments (AMAP), and if you're not getting the full amount you can claim back the difference. The NHS has its own rates as well, if you're employed by them.

    Beyond travel, there are several more ways a job in healthcare can cost you money. If you’re paying out of your own pocket for repair, replacement or even laundry of your work uniform, for instance, you could make a claim for those costs. The same goes for union dues and professional body fees to organisations like the Nursing and Midwifery Council.

    The key points to remember are that the costs you’re claiming tax relief for need to be essential to your work, and you need to be paying them yourself. In addition, to get back everything you’re owed you’ll need to show proof of what you’re spending. That means records and receipts – although the simplified Flat Rate Expenses system can offer an easier way if you don’t mind sticking to HMRC’s figures.

    If you find yourself buying things like laptops or office equipment for work use, you might have a claim under HMRC’s capital allowances system. This is generally for items that you’ll be using for a couple of years or more – and again, you’ll need to be footing the bill yourself for them to qualify for tax relief.

  • North East

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    North East | NE | £1,563,741,000 | £102,823,000 | 7.0% 

    Durham | NE | £331,812,000 | £33,270,000 | 11.1% 

    Northumberland | NE | £234,062,000 | £14,607,000 | 6.7% 

    Newcastle upon Tyne | NE | £147,544,000 | £9,051,000 | 6.5% 

    Sunderland | NE | £131,683,000 | £8,754,000 | 7.1% 

    North Tyneside | NE | £123,451,000 | £5,878,000 | 5.0% 

    Stockton-on-Tees | NE | £122,418,000 | £6,867,000 | 5.9% 

    Gateshead | NE | £112,816,000 | £3,977,000 | 3.7% 

    Redcar & Cleveland | NE | £82,730,000 | £3,098,000 | 3.9% 

    South Tyneside | NE | £77,294,000 | £4,405,000 | 6.0% 

    Middlesbrough | NE | £75,880,000 | £5,102,000 | 7.2% 

    Darlington | NE | £69,986,000 | £4,199,000 | 6.4% 

    Hartlepool | NE | £54,065,000 | £3,615,000 | 7.2% 

  • North West

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    North West | NW | £4,425,938,000 | £241,981,000 | 5.8% 

    Cheshire East | NW | £311,868,000 | £12,117,000 | 4.0% 

    Cheshire West and Chester | NW | £259,808,000 | £12,325,000 | 5.0% 

    Liverpool | NW | £241,128,000 | £20,359,000 | 9.2% 

    Manchester | NW | £235,228,000 | £18,078,000 | 8.3% 

    Stockport | NW | £208,598,000 | £9,410,000 | 4.7% 

    Wirral | NW | £195,815,000 | £7,764,000 | 4.1% 

    Sefton | NW | £181,909,000 | £8,306,000 | 4.8% 

    Wigan | NW | £164,600,000 | £13,419,000 | 8.9% 

    Salford | NW | £153,869,000 | £12,525,000 | 8.9% 

    Bolton | NW | £152,991,000 | £9,010,000 | 6.3% 

    Trafford | NW | £139,577,000 | £7,344,000 | 5.6% 

    Warrington | NW | £137,182,000 | £6,472,000 | 5.0% 

    Tameside | NW | £125,931,000 | £6,393,000 | 5.3% 

    Oldham | NW | £121,575,000 | £6,351,000 | 5.5% 

    Rochdale | NW | £118,760,000 | £5,743,000 | 5.1% 

    Bury | NW | £117,378,000 | £5,465,000 | 4.9% 

    St Helens | NW | £104,424,000 | £4,630,000 | 4.6% 

    South Lakeland | NW | £95,173,000 | £2,978,000 | 3.2% 

    Preston | NW | £87,557,000 | £6,923,000 | 8.6% 

    Lancaster | NW | £86,973,000 | £5,202,000 | 6.4% 

    Wyre | NW | £81,051,000 | £4,116,000 | 5.3% 

    Chorley | NW | £78,342,000 | £4,211,000 | 5.7% 

    Blackpool | NW | £78,115,000 | £6,145,000 | 8.5% 

    West Lancashire | NW | £76,724,000 | £5,700,000 | 8.0% 

    South Ribble | NW | £76,615,000 | £4,346,000 | 6.0% 

    Knowsley | NW | £75,220,000 | £5,013,000 | 7.1% 

    Blackburn with Darwen | NW | £74,232,000 | £4,830,000 | 7.0% 

    Carlisle | NW | £71,951,000 | £2,649,000 | 3.8% 

    Halton | NW | £69,642,000 | £2,147,000 | 3.2% 

    Fylde | NW | £66,260,000 | £3,981,000 | 6.4% 

    Allerdale | NW | £64,957,000 | £2,353,000 | 3.8% 

    Pendle | NW | £55,429,000 | £2,412,000 | 4.5% 

    Ribble Valley | NW | £50,350,000 | £2,519,000 | 5.3% 

    Burnley | NW | £49,929,000 | £2,448,000 | 5.2% 

    Hyndburn | NW | £44,674,000 | £1,710,000 | 4.0% 

    Rossendale | NW | £44,165,000 | £2,183,000 | 5.2% 

    Copeland | NW | £43,584,000 | £1,644,000 | 3.9% 

    Eden | NW | £43,468,000 | £1,448,000 | 3.4% 

    Barrow-in-Furness | NW | £40,886,000 | £1,312,000 | 3.3% 

  • Yorkshire and The Humber

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    Yorkshire and the Humber | YH | £3,180,396,000 | £152,338,000 | 5.0% 

    Leeds | YH | £433,854,000 | £22,147,000 | 5.4% 

    Sheffield | YH | £297,955,000 | £15,511,000 | 5.5% 

    Bradford | YH | £264,461,000 | £10,931,000 | 4.3% 

    East Riding of Yorkshire | YH | £248,126,000 | £15,039,000 | 6.5% 

    Kirklees | YH | £238,666,000 | £9,405,000 | 4.1% 

    Wakefield | YH | £194,845,000 | £11,345,000 | 6.2% 

    Doncaster | YH | £153,988,000 | £8,379,000 | 5.8% 

    Rotherham | YH | £147,804,000 | £5,696,000 | 4.0% 

    Harrogate | YH | £137,958,000 | £7,221,000 | 5.5% 

    Barnsley | YH | £132,483,000 | £7,902,000 | 6.3% 

    York | YH | £127,834,000 | £5,909,000 | 4.8% 

    Calderdale | YH | £122,350,000 | £3,411,000 | 2.9% 

    Kingston upon Hull | YH | £119,815,000 | £4,394,000 | 3.8% 

    North Lincolnshire | YH | £99,722,000 | £3,419,000 | 3.6% 

    North East Lincolnshire | YH | £93,334,000 | £3,089,000 | 3.4% 

    Scarborough | YH | £84,679,000 | £4,479,000 | 5.6% 

    Hambleton | YH | £76,646,000 | £3,874,000 | 5.3% 

    Selby | YH | £68,511,000 | £2,853,000 | 4.3% 

    Craven | YH | £49,080,000 | £3,305,000 | 7.2% 

    Ryedale | YH | £47,042,000 | £2,356,000 | 5.3% 

    Richmondshire | YH | £41,243,000 | £1,673,000 | 4.2% 

  • West Midlands

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    West Midlands | WM | £3,410,079,000 | £159,844,000 | 4.9% 

    Birmingham | WM | £449,767,000 | £16,990,000 | 3.9% 

    Shropshire | WM | £233,000,000 | £11,623,000 | 5.3% 

    Coventry | WM | £181,836,000 | £10,228,000 | 6.0% 

    Dudley | WM | £165,453,000 | £9,760,000 | 6.3% 

    Walsall | WM | £154,444,000 | £6,270,000 | 4.2% 

    Herefordshire | WM | £149,003,000 | £5,446,000 | 3.8% 

    Solihull | WM | £140,819,000 | £7,395,000 | 5.5% 

    Sandwell | WM | £139,707,000 | £12,795,000 | 10.1% 

    Wolverhampton | WM | £135,070,000 | £8,522,000 | 6.7% 

    Stratford-on-Avon | WM | £122,289,000 | £7,062,000 | 6.1% 

    Stoke-on-Trent | WM | £119,263,000 | £5,878,000 | 5.2% 

    Warwick | WM | £117,282,000 | £5,966,000 | 5.4% 

    Telford & Wrekin | WM | £103,417,000 | £4,434,000 | 4.5% 

    Wychavon | WM | £98,673,000 | £2,514,000 | 2.6% 

    Stafford | WM | £93,386,000 | £3,183,000 | 3.5% 

    Nuneaton & Bedworth | WM | £82,965,000 | £3,786,000 | 4.8% 

    Rugby | WM | £81,847,000 | £3,961,000 | 5.1% 

    East Staffordshire | WM | £78,565,000 | £4,659,000 | 6.3% 

    Lichfield | WM | £78,378,000 | £3,388,000 | 4.5% 

    South Staffordshire | WM | £76,557,000 | £3,540,000 | 4.8% 

    Bromsgrove | WM | £75,495,000 | £3,401,000 | 4.7% 

    Newcastle-under-Lyme | WM | £73,540,000 | £2,989,000 | 4.2% 

    Wyre Forest | WM | £68,296,000 | £2,990,000 | 4.6% 

    Staffordshire Moorlands | WM | £66,014,000 | £1,729,000 | 2.7% 

    Malvern Hills | WM | £62,389,000 | £1,666,000 | 2.7% 

    Worcester | WM | £61,302,000 | £1,113,000 | 1.8% 

    Cannock Chase | WM | £58,656,000 | £2,282,000 | 4.0% 

    Redditch | WM | £52,587,000 | £2,188,000 | 4.3% 

    North Warwickshire | WM | £45,586,000 | £2,200,000 | 5.1% 

    Tamworth | WM | £44,493,000 | £1,886,000 | 4.4% 

  • East Midlands

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    East Midlands | EM | £3,049,500,000 | £150,425,000 | 5.2% 

    West Northamptonshire | EM | £289,141,000 | £14,760,000 | 5.4% 

    North Northamptonshire | EM | £226,861,000 | £10,005,000 | 4.6% 

    Leicester | EM | £159,025,000 | £8,441,000 | 5.6% 

    Nottingham | EM | £156,955,000 | £6,503,000 | 4.3% 

    Derby | EM | £133,076,000 | £5,462,000 | 4.3% 

    Charnwood | EM | £117,407,000 | £4,340,000 | 3.8% 

    Rushcliffe | EM | £99,637,000 | £5,602,000 | 6.0% 

    South Kesteven | EM | £93,292,000 | £8,544,000 | 10.1% 

    Newark & Sherwood | EM | £91,616,000 | £4,006,000 | 4.6% 

    East Lindsey | EM | £89,018,000 | £5,209,000 | 6.2% 

    Gedling | EM | £82,395,000 | £4,018,000 | 5.1% 

    Amber Valley | EM | £82,316,000 | £3,653,000 | 4.6% 

    Bassetlaw | EM | £81,768,000 | £5,139,000 | 6.7% 

    Hinckley & Bosworth | EM | £78,061,000 | £3,255,000 | 4.4% 

    Harborough | EM | £77,561,000 | £4,043,000 | 5.5% 

    Broxtowe | EM | £75,749,000 | £4,172,000 | 5.8% 

    North Kesteven | EM | £75,626,000 | £4,305,000 | 6.0% 

    Ashfield | EM | £74,379,000 | £3,551,000 | 5.0% 

    North West Leicestershire | EM | £73,219,000 | £3,793,000 | 5.5% 

    South Derbyshire | EM | £72,999,000 | £3,487,000 | 5.0% 

    Blaby | EM | £70,546,000 | £2,520,000 | 3.7% 

    North East Derbyshire | EM | £67,039,000 | £3,577,000 | 5.6% 

    Erewash | EM | £66,407,000 | £3,331,000 | 5.3% 

    Mansfield | EM | £65,354,000 | £2,769,000 | 4.4% 

    West Lindsey | EM | £63,739,000 | £4,148,000 | 7.0% 

    High Peak | EM | £63,031,000 | £1,994,000 | 3.3% 

    Derbyshire Dales | EM | £60,997,000 | £1,772,000 | 3.0% 

    Chesterfield | EM | £58,230,000 | £3,120,000 | 5.7% 

    South Holland | EM | £57,050,000 | £3,361,000 | 6.3% 

    Lincoln | EM | £49,046,000 | £2,993,000 | 6.5% 

    Bolsover | EM | £47,531,000 | £2,271,000 | 5.0% 

    Melton | EM | £39,559,000 | £1,379,000 | 3.6% 

    Boston | EM | £38,700,000 | £1,739,000 | 4.7% 

    Rutland | EM | £36,086,000 | £1,779,000 | 5.2% 

    Oadby & Wigston | EM | £36,084,000 | £1,384,000 | 4.0% 

  • South West

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    South West | SW | £4,170,619,000 | £204,197,000 | 5.1% 

    Cornwall | SW | £428,164,000 | £23,547,000 | 5.8% 

    Wiltshire | SW | £401,770,000 | £17,246,000 | 4.5% 

    Dorset | SW | £347,595,000 | £14,396,000 | 4.3% 

    Bournemouth, Christchurch & Poole | SW | £288,013,000 | £20,677,000 | 7.7% 

    Bristol | SW | £282,731,000 | £17,962,000 | 6.8% 

    South Gloucestershire | SW | £206,164,000 | £12,051,000 | 6.2% 

    North Somerset | SW | £157,456,000 | £7,016,000 | 4.7% 

    Swindon | SW | £150,055,000 | £7,231,000 | 5.1% 

    Plymouth | SW | £149,024,000 | £5,416,000 | 3.8% 

    East Devon | SW | £131,472,000 | £5,684,000 | 4.5% 

    Bath & North East Somerset | SW | £130,664,000 | £4,488,000 | 3.6% 

    South Somerset | SW | £124,764,000 | £7,644,000 | 6.5% 

    Somerset West & Taunton | SW | £113,682,000 | £5,014,000 | 4.6% 

    Teignbridge | SW | £108,453,000 | £4,637,000 | 4.5% 

    Stroud | SW | £95,358,000 | £3,191,000 | 3.5% 

    Torbay | SW | £94,708,000 | £3,307,000 | 3.6% 

    Mendip | SW | £87,093,000 | £3,562,000 | 4.3% 

    South Hams | SW | £86,517,000 | £3,518,000 | 4.2% 

    Sedgemoor | SW | £86,095,000 | £5,107,000 | 6.3% 

    Cheltenham | SW | £85,410,000 | £2,596,000 | 3.1% 

    Cotswold | SW | £83,351,000 | £5,529,000 | 7.1% 

    Exeter | SW | £78,786,000 | £2,882,000 | 3.8% 

    North Devon | SW | £77,785,000 | £3,832,000 | 5.2% 

    Gloucester | SW | £73,896,000 | £2,565,000 | 3.6% 

    Tewkesbury | SW | £70,059,000 | £3,843,000 | 5.8% 

    Mid Devon | SW | £66,171,000 | £3,210,000 | 5.1% 

    Forest of Dean | SW | £62,009,000 | £3,181,000 | 5.4% 

    Torridge | SW | £53,044,000 | £2,188,000 | 4.3% 

    West Devon | SW | £48,269,000 | £2,559,000 | 5.6% 

    Isles of Scilly | SW | £2,061,000 | £118,000 | 6.1% 

  • South East

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    South East | SE | £7,100,340,000 | £385,495,000 | 5.7% 

    Buckinghamshire UA | SE | £476,884,000 | £34,979,000 | 7.9% 

    Brighton and Hove | SE | £191,558,000 | £7,849,000 | 4.3% 

    Milton Keynes | SE | £181,164,000 | £11,932,000 | 7.1% 

    Medway | SE | £167,634,000 | £8,183,000 | 5.1% 

    Wokingham | SE | £155,860,000 | £6,423,000 | 4.3% 

    Wealden | SE | £150,633,000 | £6,611,000 | 4.6% 

    New Forest | SE | £144,290,000 | £5,034,000 | 3.6% 

    Elmbridge | SE | £142,689,000 | £7,513,000 | 5.6% 

    Maidstone | SE | £138,907,000 | £7,964,000 | 6.1% 

    Reigate & Banstead | SE | £136,732,000 | £10,904,000 | 8.7% 

    West Berkshire | SE | £132,930,000 | £6,933,000 | 5.5% 

    South Oxfordshire | SE | £132,912,000 | £7,935,000 | 6.3% 

    Mid Sussex | SE | £130,908,000 | £6,659,000 | 5.4% 

    Horsham | SE | £129,545,000 | £4,923,000 | 4.0% 

    Guildford | SE | £128,587,000 | £9,818,000 | 8.3% 

    Arun | SE | £128,561,000 | £5,224,000 | 4.2% 

    Basingstoke & Deane | SE | £127,920,000 | £5,399,000 | 4.4% 

    Southampton | SE | £127,865,000 | £4,403,000 | 3.6% 

    Waverley | SE | £126,199,000 | £6,490,000 | 5.4% 

    Cherwell | SE | £125,460,000 | £8,497,000 | 7.3% 

    Reading | SE | £122,437,000 | £6,201,000 | 5.3% 

    Vale of White Horse | SE | £122,351,000 | £8,263,000 | 7.2% 

    Isle of Wight | SE | £114,625,000 | £5,055,000 | 4.6% 

    Chichester | SE | £111,057,000 | £4,674,000 | 4.4% 

    Portsmouth | SE | £109,249,000 | £7,726,000 | 7.6% 

    Sevenoaks | SE | £109,170,000 | £3,767,000 | 3.6% 

    Tonbridge & Malling | SE | £108,816,000 | £5,252,000 | 5.1% 

    Windsor & Maidenhead | SE | £106,251,000 | £5,342,000 | 5.3% 

    Canterbury | SE | £105,237,000 | £5,470,000 | 5.5% 

    Oxford | SE | £102,162,000 | £6,259,000 | 6.5% 

    East Hampshire | SE | £101,202,000 | £4,307,000 | 4.4% 

    Winchester | SE | £101,104,000 | £5,424,000 | 5.7% 

    West Oxfordshire | SE | £98,635,000 | £8,696,000 | 9.7% 

    Test Valley | SE | £98,567,000 | £4,457,000 | 4.7% 

    Eastleigh | SE | £97,134,000 | £7,362,000 | 8.2% 

    Ashford | SE | £96,516,000 | £4,804,000 | 5.2% 

    Swale | SE | £96,492,000 | £5,175,000 | 5.7% 

    Tunbridge Wells | SE | £96,046,000 | £4,612,000 | 5.0% 

    Thanet | SE | £92,966,000 | £4,857,000 | 5.5% 

    Woking | SE | £91,418,000 | £5,005,000 | 5.8% 

    Mole Valley | SE | £88,615,000 | £4,889,000 | 5.8% 

    Bracknell Forest | SE | £88,369,000 | £5,761,000 | 7.0% 

    Spelthorne | SE | £87,143,000 | £5,529,000 | 6.8% 

    Lewes | SE | £86,287,000 | £3,493,000 | 4.2% 

    Surrey Heath | SE | £85,950,000 | £4,736,000 | 5.8% 

    Rother | SE | £85,682,000 | £3,576,000 | 4.4% 

    Hart | SE | £84,585,000 | £3,910,000 | 4.8% 

    Folkestone & Hythe | SE | £84,221,000 | £4,130,000 | 5.2% 

    Tandridge | SE | £84,190,000 | £8,289,000 | 10.9% 

    Fareham | SE | £82,141,000 | £7,644,000 | 10.3% 

    Dover | SE | £81,849,000 | £4,231,000 | 5.5% 

    Slough | SE | £80,975,000 | £5,156,000 | 6.8% 

    Havant | SE | £80,730,000 | £4,034,000 | 5.3% 

    Dartford | SE | £80,468,000 | £4,074,000 | 5.3% 

    Worthing | SE | £79,648,000 | £3,104,000 | 4.1% 

    Eastbourne | SE | £76,494,000 | £3,931,000 | 5.4% 

    Runnymede | SE | £73,259,000 | £3,897,000 | 5.6% 

    Epsom and Ewell | SE | £71,865,000 | £3,462,000 | 5.1% 

    Crawley | SE | £71,474,000 | £3,364,000 | 4.9% 

    Gravesham | SE | £69,594,000 | £3,840,000 | 5.8% 

    Rushmoor | SE | £62,308,000 | £2,530,000 | 4.2% 

    Hastings | SE | £58,962,000 | £3,563,000 | 6.4% 

    Gosport | SE | £51,160,000 | £187,000 | 0.4% 

    Adur | SE | £45,698,000 | £1,784,000 | 4.1% 

  • East of England

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    East of England | E | £4,406,439,000 | £221,953,000 | 5.3%  

    Central Bedfordshire | E | £235,282,000 | £10,088,000 | 4.5%  

    East Suffolk | E | £174,713,000 | £7,162,000 | 4.3%  

    South Cambridgeshire | E | £136,111,000 | £8,203,000 | 6.4%  

    Chelmsford | E | £133,395,000 | £6,401,000 | 5.0%  

    Huntingdonshire | E | £132,334,000 | £7,376,000 | 5.9%  

    St Albans | E | £127,897,000 | £5,667,000 | 4.6%  

    Colchester | E | £126,569,000 | £6,921,000 | 5.8%  

    East Hertfordshire | E | £126,568,000 | £5,496,000 | 4.5%  

    Bedford | E | £126,351,000 | £5,638,000 | 4.7%  

    Basildon | E | £121,713,000 | £5,918,000 | 5.1%  

    Dacorum | E | £117,558,000 | £6,124,000 | 5.5%  

    Luton | E | £116,099,000 | £7,903,000 | 7.3%  

    West Suffolk | E | £113,610,000 | £5,000,000 | 4.6%  

    Southend-on-Sea | E | £112,359,000 | £5,819,000 | 5.5%  

    Peterborough | E | £112,107,000 | £5,744,000 | 5.4%  

    Braintree | E | £109,799,000 | £7,597,000 | 7.4%  

    South Norfolk | E | £106,868,000 | £5,396,000 | 5.3%  

    Kings Lynn & West Norfolk | E | £105,794,000 | £4,057,000 | 4.0%  

    Epping Forest | E | £105,619,000 | £4,105,000 | 4.0%  

    Tendring | E | £99,943,000 | £9,861,000 | 10.9%  

    North Hertfordshire | E | £99,724,000 | £3,047,000 | 3.2%  

    Broadland | E | £96,156,000 | £4,163,000 | 4.5%  

    Breckland | E | £91,393,000 | £4,250,000 | 4.9%  

    Cambridge | E | £91,271,000 | £6,671,000 | 7.9%  

    Thurrock | E | £90,862,000 | £3,494,000 | 4.0%  

    Welwyn Hatfield | E | £87,182,000 | £5,165,000 | 6.3%  

    Hertsmere | E | £84,534,000 | £4,584,000 | 5.7%  

    North Norfolk | E | £83,959,000 | £3,187,000 | 3.9%  

    Norwich | E | £79,540,000 | £4,318,000 | 5.7%  

    Ipswich | E | £79,530,000 | £2,680,000 | 3.5%  

    Three Rivers | E | £78,493,000 | £3,851,000 | 5.2%  

    Mid Suffolk | E | £76,287,000 | £4,181,000 | 5.8%  

    Uttlesford | E | £76,098,000 | £3,416,000 | 4.7%  

    Watford | E | £69,692,000 | £4,441,000 | 6.8%  

    Broxbourne | E | £69,326,000 | £4,557,000 | 7.0%  

    Babergh | E | £67,865,000 | £3,164,000 | 4.9%  

    Rochford | E | £65,451,000 | £3,462,000 | 5.6%  

    Fenland | E | £65,262,000 | £3,570,000 | 5.8%  

    Brentwood | E | £65,168,000 | 

     

  • London

    Local authority | Region - Total receipts of council taxes collected during the financial year - 2022 to 2023 (Q1 to Q4) - (£ full number) | Annual Change (n) | Annual Change (%) 

    London, L, £5,228,073,000, £331,831,000, 6.8% 

    Croydon, L, £261,802,000, £18,275,000, 7.5% 

    Barnet, L, £258,729,000, £11,949,000, 4.8% 

    Bromley, L, £239,776,000, £9,198,000, 4.0% 

    Ealing, L, £212,901,000, £15,261,000, 7.7% 

    Lambeth, L, £183,587,000, £8,133,000, 4.6% 

    Harrow, L, £182,374,000, £8,764,000, 5.0% 

    Richmond upon Thames, L, £181,760,000, £7,522,000, 4.3% 

    Brent, L, £179,325,000, £14,290,000, 8.7% 

    Enfield, L, £178,712,000, £6,947,000, 4.0% 

    Havering, L, £176,401,000, £7,883,000, 4.7% 

    Hillingdon, L, £168,494,000, £9,966,000, 6.3% 

    Southwark, L, £167,884,000, £12,737,000, 8.2% 

    Redbridge, L, £167,539,000, £7,448,000, 4.7% 

    Lewisham, L, £165,099,000, £11,266,000, 7.3% 

    Tower Hamlets, L, £164,392,000, £13,224,000, 8.7% 

    Camden, L, £163,071,000, £5,575,000, 3.5% 

    Hounslow, L, £159,611,000, £11,366,000, 7.7% 

    Bexley, L, £158,110,000, £8,388,000, 5.6% 

    Waltham Forest, L, £153,787,000, £7,848,000, 5.4% 

    Haringey, L, £152,351,000, £9,789,000, 6.9% 

    Greenwich, L, £148,957,000, £9,512,000, 6.8% 

    Sutton, L, £143,943,000, £6,126,000, 4.4% 

    Islington, L, £139,115,000, £8,126,000, 6.2% 

    Merton, L, £137,978,000, £7,183,000, 5.5% 

    Kensington & Chelsea, L, £137,047,000, £5,451,000, 4.1% 

    Kingston upon Thames, L, £136,872,000, £6,369,000, 4.9% 

    Hackney, L, £131,532,000, £45,146,000, 52.3% 

    Newham, L, £126,949,000, £10,589,000, 9.1% 

    Wandsworth, L, £125,377,000, £8,629,000, 7.4% 

    Westminster, L, £121,347,000, £10,050,000, 9.0% 

    Hammersmith & Fulham, L, £100,548,000, £2,810,000, 2.9% 

    Barking & Dagenham, L, £93,065,000, £5,608,000, 6.4% 

    City of London, L, £9,638,000, £403,000, 4.4% 

  • For example:

    • People living alone you can get a 25% discount. When this is worked out, the rules actually completely ignore anyone living with you who’s under 18, along with any 18-19 year olds who are still in education on the 30th of April. The same goes for anyone you’re still entitled to claim Child Benefit for.
    • People in training, who are temporarily away or who suffer from severe mental impairment can sometimes also be ignored when working out how many adults live in a property. That’s why it’s so important to make sure the council has a clear picture of your circumstances. If they don’t have all the information they need to calculate your Council Tax bill, you could easily end up overpaying.
    • Even if you’re living with someone who isn’t ignored because of the “living alone” rules, if they’re on a low income or getting benefits you might qualify for a “second adult rebate”.
    • Holiday homes, second homes and properties that aren’t being used can all sometimes qualify for Council Tax reductions. Check your local council’s website to see what their rules are.
    • If your property has an extra kitchen, bathroom or other features put in to meet the needs of a disabled person, you might get a reduction to your Council Tax rate. You’ll usually be expected to provide some evidence to the council to claim this, obviously.
  • Why council tax debt needs to be cleared quickly

    The big thing to realise about Council Tax is that it’s a really high-priority debt to clear – arguably more than even things like credit card balances or unsecured loans. The fact is that your local council has a lot of ways to make your life difficult if you don’t pay up. Here’s an example: if you wind up in arrears on your Council Tax payments, meaning you’ve fallen behind, you could find yourself with a “liability order” from a magistrates court. This nasty little piece of paperwork can dump a load of extra court costs on top of what you already owe, and pave the way for even more enforcement action. We’re talking about visits from bailiffs, automatic deductions from your earnings or benefits, bankruptcy or even a prison sentence if you let things go that far.

  • What to do if you find yourself in arrears

    Okay, let’s say you’ve missed a few Council Tax payments and can’t see an easy way to pay up. Don’t fool yourself into thinking that the authorities won’t notice, and don’t wait for them to get in touch with you before you decide to do something about it. Hop on the phone to the council office and talk them through the difficulties you’re having. You’ll almost certainly still end up having to pay what you owe in full, but there’s a good chance they’ll be able to offer you easier ways to do it. If you ignore the problem, you’re probably going to find yourself facing court costs, bailiff bills and potentially lots more trouble on top.

    Read our guide: Debt & mental health

  • Getting a council tax payment plan set up

    If you talk to your council, you’ll probably find them more than willing to help. After all, they’re not trying to ruin you. All they want is what you owe by law. Instead of coughing up the whole amount at once, though, the odds are you’ll be able to spread your payments out over a longer period, paying off your debt in small chunks each month. No, it still probably won’t be much fun, but it’ll eventually make the whole problem disappear and it’s a lot better than the alternatives.

  • Are you sure you're paying the right amount of Council tax?

    Council Tax charges are set in “bands” from A-H, with the band you’re put in based on how much your property was worth back on the 1st of April 1991 (for England and Scotland) or the 1st of April 2003 (for Wales).

    It’s quite possible that you’ve been put into the wrong Council Tax band, and if you think you have you can actually challenge the council’s decision. This kind of thing can happen if, for instance, your property’s been changed, demolished or is being used for different purposes than before. If you think that applies to you, you can challenge the decision via the Valuation Office Agency (or the Scottish Assessors website in Scotland).

  • Why you might qualify for a Council tax discount

    Another reason your council Tax bills might be too high is if you’re due a discount that you aren’t getting.

    • People living alone you can get a 25% discount. When this is worked out, the rules actually completely ignore anyone living with you who’s under 18, along with any 18-19 year olds who are still in education on the 30th of April. The same goes for anyone you’re still entitled to claim Child Benefit for.
    • People in training, who are temporarily away or who suffer from severe mental impairment can sometimes also be ignored when working out how many adults live in a property. That’s why it’s so important to make sure the council has a clear picture of your circumstances. If they don’t have all the information they need to calculate your Council Tax bill, you could easily end up overpaying.
    • Even if you’re living with someone who isn’t ignored because of the “living alone” rules, if they’re on a low income or getting benefits you might qualify for a “second adult rebate”.
    • Holiday homes, second homes and properties that aren’t being used can all sometimes qualify for Council Tax reductions. Check your local council’s website to see what their rules are.
    • If your property has an extra kitchen, bathroom or other features put in to meet the needs of a disabled person, you might get a reduction to your Council Tax rate. You’ll usually be expected to provide some evidence to the council to claim this, obviously.

    To put it in perspective, let’s say you’re a student who’s just moved into rented accommodation. The rules say you don’t need to pay Council Tax – but that doesn’t mean the local council won’t ask for it. You’ll almost certainly have to apply for your Council Tax exemption directly. It might sound like a hassle, but at a saving of up to £120 per month, it’s absolutely worth it!

  • Can I get a council tax reduction?

    Another thing that can bring down the Council Tax you’re being charged is if you qualify for a Council Tax Reduction (also known as Council Tax Support). Again, though, the council will need a lot of information about your circumstances to make their overall calculations. You could qualify for a reduction if:

    • You’re the person who’s actually paying the Council Tax bill.
    • Your income is low, whether it’s from work or benefits.
    • Your partner (if any) and you have no more than £16,000 in savings and capital.
    • You’re on Universal Credit.

    The reduction you actually get will depend on a range of conditions, from your age to your savings and benefits. You get less if you’re still at working age, for example.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • You could qualify for a Council Tax Reduction if:

    • You’re the person who’s actually paying the Council Tax bill.
    • Your income is low, whether it’s from work or benefits.
    • Your partner (if any) and you have no more than £16,000 in savings and capital.
    • You’re on Universal Credit.
  • What counts for capital gains tax?

    Capital Gains Tax applies to tangible, movable items worth over £6,000, like artworks, jewellery, and machinery. Some exceptions: private cars, short-life assets under 50 years, and certain business-used assets. Determining applicability can be tricky, so seeking professional advice for clarity is advisable.

  • How to check your tax adviser’s credentials

    It’s not always easy to know how far to trust the advice you get in any walk of life. Luckily, with tax advisers you can check their credentials fairly easily. A good adviser will have properly regulated qualifications from a professional body to show you, so you’ll know their skills and knowledge are both up to standard and up to date. A fully accredited tax adviser has to have Professional Indemnity Insurance, too. 

    Here’s a quick list of professional bodies who can point you in the right direction when you’re looking for a tax adviser:

    • The Institute of Chartered Accountants in England and Wales (ICAEW).
    • The Institute of Chartered Accountants of Scotland (ICAS).
    • The Chartered Accountants Ireland (CAI).
    • The Association of Chartered Certified Accountants (ACCA).
    • The Chartered Institute of Taxation (CIOT).
    • The Association of Accounting Technicians (AAT).
    • The Association of Taxation Technicians (ATT).

    If your adviser says they’re a member of one or more of the bodies on this list, don’t feel awkward about getting in touch with the organisation to check up. Their customer service department should quickly be able to settle any doubts you have, one way or the other.

  • Credit builder

    Of course, all these different kinds of loan aren’t much use if you don’t have a strong credit history to fall back on. That’s where credit builder loans come in. These agreements are built to put much-needed financing within the reach of people who couldn’t otherwise access them. The system works by the lender paying the amount to be borrowed into a savings account. The borrower then makes monthly repayments at a fixed rate for anything between 6 months and 2 years. Once the loan’s repaid, the borrower gets the cash back, possibly with some interest on top.

    Why is this useful? Well, a credit builder loan is less about getting some up-front cash than it is about building up your overall credit rating. If you’ve only got a limited credit history, signing up to this kind of deal is a decent way to boost your score and make other lenders take you seriously, by establishing a track record of sticking to a repayment schedule. Of course, to make this work you need to be sure your lender’s reporting the deal to the organisations that track your credit score.

  • So remember these three things:

    1. You'll need enough in your bank account to cover the minimum payment each month
    2. If you only pay off the minimum each month, your balance won't be paid off by the time interest kicks in
    3. Making extra payments will keep your balance under control
  • What information goes into a credit score?

    Let's take a moment here to talk about what kind of information goes into your credit score. Obviously, a lot of the basic details are going to be personal to you. These could include the work you do, where you live and your yearly income, for instance. Beyond that, though, your credit score could also reflect things like any gaps in your previous payment history, any credit arrangements you already have and any problems you've had in the past with fraud, debt or even bankruptcy. Don't assume that a run of bad luck will necessarily haunt your credit score forever, though. Most of the information that goes into putting your score together will only go cover the last 6 years.

  • How to boost your credit score

    Many of these tips are things you'd already expect, but there are one or two odd ones mixed in that most people wouldn't usually think of.

    • Get on the electoral roll

    This is one of the stranger tips, but if you're looking to borrow money from a serious lender, you're going to have a much rougher ride of it if you're not registered to vote in the UK. Since you're supposed to be on the "full" version of the register anyway by law, it's a smart move to make sure you're all signed up. If you're worried about your personal information being sold, you can still opt out of being listed on the "open" register, but credit reference agencies will be using the full version  so you'll still show up when they look.

    • Keep up with your existing credit payments

    Your credit rating might be based on your past history, but it's really all about predicting your future actions. If your record's littered with late or skipped payments, you're going to look like an iffy prospect. Also, even if you never miss a deadline, you can still look riskier to a lender if all you ever do is pay back the absolute minimum amount. If you're worried you might have trouble making an upcoming payment, get in touch with your lender to see if you can arrange an easier schedule.

    • Remember it's not all about you

    Even if your own financial hands are perfectly clean, it's easy to muddy the waters of your credit score if you've got strong ties to a bad payer. If you've got financial links to another person, keep in mind that their credit history can affect yours. Sharing a joint loan, mortgage or other financial product with someone who's got a weak credit score might not be a great way to secure credit of your own.

    • Try to keep your credit searches down

    This is another thing that might not seem particularly important, but can still have an effect on your overall attractiveness to a lender. In general, you want to keep the number of searches being made on your credit history to a minimum. These "hard searches" leave fingerprints all over your file, and a lot of searches in a short time can look dodgy. For instance, if you get a rejection from one lender and immediately apply elsewhere, the new lender will probably work out you just got rejected by someone else. To avoid this, it's a good idea to use a free eligibility calculator that won't show its searches in your file. That way, you'll know the chances of your credit application succeeding before you make it.

    • Get your facts straight

    Another fairly obvious one. Lenders like to see consistency when they search your credit history, so make it as easy as possible for them to approve your application by ensuring your details match. For example, seeing the same address on all your credit applications, even older ones, will give your lender a lot more confidence in you. While you're at it, check regularly that there are no mistakes or outdated details in your credit files. Keeping those records spotless is the key to proving you're a safe pair of hands for a lender's money.

    • Rebuild your credit

    One last weird one to finish the list. If you've got a low credit score or not much of a previous payment history, you can boost them by signing up for a credit card with low acceptance standards. You'll probably find yourself stuck on a painful interest rate (maybe 35% or so—lenders like higher rewards when they take higher risks), but if you use the card on a "little but regularly" basis and always pay it all off each month before the interest kicks in, you can build up your credit score without getting hit with heavy repayments. If you've already got a credit card, even following the same basic principle with that can help ramp up your score—and avoid another hard search on your file at the same time.

  • Credit score myths: busted

    • There's a secret blacklist and once you're on it you'll never get off!

    Nope! Your details aren't being kept on a hidden list and you won't get blanket-banned for having a poor credit history. Most of your information expires after 6 years anyway.

    • Wiping out your credit card balance is the secret to a good score

    Oddly enough, no. Having a good credit score is more about making your repayments reliably than never borrowing at all. Lenders are in the business of collecting interest, so a strong history of paying up on time is what's crucial to them.

    • Council Tax debts kill your rating

    No chance! Councils are very tight-lipped about payment information, so falling behind in your Council Tax bills won't put a dent in your overall credit score. If you're struggling with Council Tax Debts, though, check out our guide on handling those.

    Read our guide: Council tax debt help

    • You only have one credit score

    As it turns out, the 3 credit reference agencies (Equifax, TransUnion and Experian) each have separate ranking systems and scales, so you'll almost certainly have different scores on each. All that really matters to lenders is the information those scores are based on. They never get to see your credit score anyway, only the records of your actual history and financial behaviour. In practice, what this means is that your score's a good overall indicator of your reliability, but it's your credit history that makes the real difference.

    • Credit scores don't mean anything!

    Yes they do—they're just not the last word in the matter. While your credit score itself is really just for your own reference, it's based on a lot of details about you that lenders will want to know. Having no credit history, for instance, doesn't give your potential lender any information to base their decisions on. Having a strong history of borrowing responsibly and hitting repayment schedules reliably, on the other hand, makes you look like a much safer gamble to them.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Exchange rates

    This can get pretty complicated, very quickly, so we’ll keep it simple: The exchange rate is how much it costs to buy another currency.

    For example, at the time of writing (Aug ‘22), you can buy one Euro for 84p - so 100 Euro will cost you £84. Give or take a few pennies! 

    If you’re buying pounds with Euros, £1 will cost you 1.19 Euro.

    And a US Dollar will cost you 83p.

    When they say the pound ‘is strong’, that means it costs more. Exchange rates go up or down depending on market conditions. If you’re taking cash on holiday, it’s advised to monitor the exchange rate and shop around. You’ll find a few comparison tools online like Compare Holiday Money.

    Read our guide: Understanding comparison sites

    Hotels and airports tend to be the most expensive places to exchange currency.  And if you’re waiting until you get there to withdraw cash from the cashpoint, always do it in the local currency. Just don't forget to check if your bank charges ATM or foreign transaction fees.

  • Using cards abroad

    However easy and convenient it is to use your bank debit card at home, they can be the worst way to spend on holiday. Most charge a foreign transaction fee. To give you an example, most standard debit and credit cards will charge a foreign transaction fee of around 2.75% to 2.99% every time you spend on the card. This means for every £100 you spend you could be charged £2.75 to £2.99.

    Plus - and this is important -When you’re paying for anything by card, they’ll likely ask you if you want to pay in sterling or the local currency. If you choose pounds, the retailer does the currency conversion and rates can be poor. If you choose the local currency, your card does the conversion and will give you a better – if not the best - rate.

    Again, it depends on your card type. Our advice? Do your research and choose the best overseas credit, debit or prepaid travel money card for you.

  • Roaming charges

    Back in 2017, mobile networks were stopped from charging customers extra to use their phones in other EU countries. Since Brexit, we here in the UK have lost this protection against roaming charges.

    You can read all about it here, but the most important takeaway before you go-away is to check your mobile phone provider’s charges. 

    Almost all the big companies have reintroduced EU roaming charges and many are introducing fair usage policies. For example, Giffgaff will allow members to use up to 5GB when roaming in the EU at no extra cost. They say that’s fair and reasonable as more than 90% of members use less than that when roaming abroad. 

    There are a couple of practical things you can do to avoid excess charges or a shocking bill when you get back from holiday: 

    • Hook up to the free WiFi wherever you go.
    • Download films and music before you leave home.
    • Only upload holiday pics and vids when you get back.
    • And check your settings! You can switch off data roaming if you’re worried it might run up a big bill.

    Think about it this way: you’re getting away from it ALL! A holiday is a great opportunity to have a break from your socials. 

  • Selling left over currency

    If you’ve got travel money left over, converting this to pounds sterling is called ‘buying back’.

    Currency buy-back services will buy your Euros, dollars or other cash at the current buy-back rate – that is how many pounds you can get for it.

    If you’re offered a Euro buy-back rate of 0.8, for example, you’ll get 80p for every Euro you sell. 

    You can choose which service to use – look for one that is offering you the best exchange rate and watch out for any additional fees.  

    It’s good to know that if you bought your travel money at the Post Office and still have your receipt, they will buy back leftover notes without charging you commission.

  • Cut out your coffee

    This might be a bitter piece of advice for dedicated coffee drinkers, but those name-brand indulgences are flushing good money straight down the toilet. £3 per day quickly adds up to £15 per working week, then £765 per year. That’s more than enough to pay down a nagging debt or handle most kinds of emergency expenses.

    If you really can’t live without coffee in your life, making it at home is a good way to bring the costs down. Even just switching to a less expensive brand will help in the long term. Cheaper places like Greggs and McDonalds might feel like a step down, but a lot of what you’re paying for with more expensive coffee just boils down to the brand name and presentation anyway.

    If even that seems like a step too far, whatever big-name coffee brand you’re loyal to might actually have systems to help you out. Check out any incentive schemes they offer. Sometimes just bringing in your own mug can get you some kind of bonus or discount.

  • Learn how to make a budget

    We talk a lot about budgets in these guides, and there’s a good reason for that. Setting yourself a budget is a lot easier than it looks, and it’s absolutely Job One when you’re taking back control of your wallet. Even if you’re just looking to save on your everyday spending, though, you’ll still need to learn how to make better use of your cash.

    All you need to do to get started is work out what you’re spending day-to-day on average. Make an actual list, and try to paint as complete a picture as possible of where your money’s going. It’ll help if you separate it all out into categories (like “travel costs”, “work lunches” and so on). That way, you’ll be able to work out which ones are absolutely essential and which you can bring down. With that list in hand, you’ll be all set to start making savings.

  • Save money on lunches

    Buying food when you’re out at work is one of those easily missed expenses that can become an “invisible” drain on your finances. After all, you’ve got to eat, right? It can be expensive buying prepared food every day, though, with average work lunch bills easily hitting anywhere between £3 and £10 per day. You might not notice the money trickling out like that, but over time it stacks up fast. Simply making a little extra at dinner the night before and taking the leftovers in to work with you can fatten up your wallet to the tune of £15-£50 a week.

  • Ditch the plastic and pay in cash

    This is another simple trick for keeping a firmer grip on your financial steering wheel. A lot of our overspending comes down to the fact that it’s been made so easy to part with our money. Wave a card at a machine or tap a button on our phones and the transaction’s done. It hardly feels like spending at all! If you’re looking dependable for ways to slow your expenditure, think about giving the plastic a breather for a bit and switching back to cash. Take the money out that you’ve budgeted for the week, and work your way through it. Setting a rule that you can’t spend what you don’t have in physical cash will really clamp down on any impulse spending. It sounds a little old-school by modern standards, but it really is one of the best, most reliable changes you can make to track what you’re spending and save money quickly.

  • Track your spending

    While we’re on the subject of keeping track of the cash you’re parting with, it’s a good idea to make a solid habit of that. Seriously – set aside some time once a week to see how your actual spending measures up to the plans you made. A budget will only ever be as good as your ability to stick to it, after all. Recording your costs as they crop up will go a long way toward spotting and fixing any overspending you’re doing. You’ll also probably find a few opportunities to save even more along the way.

    Free budget spreadsheet

  • Plan your travel ahead

    Travel, whether it’s for work or anything else, is another one of those costs that we tend to think of as non-negotiable. If you’re going by train, though, you’ve got a few options that can make a big difference to the asking price of your ticket. The first thing to do if you’ve travelling by rail regularly is look into your railcard options. Grabbing one of those can save you up to a third of your ticket costs on its own!

    The other thing to do is try to book your train fares in advance. Ticket prices tend to be cheaper the earlier you buy them, so the sooner you book the better the deal you’ll tend to get. By comparison, buying your ticket on the day could see you being charged an incredible five times what you would have paid if you’d booked a few weeks in advance!

  • Use the help that's on offer

    If your travel to work is getting to be a problem, and you can’t see any way of bringing the cost down, you might try asking your employer if they run any schemes to help. It turns out a lot of businesses offer zero-interest loans for travel to work. Basically, your boss fronts you the entire cost of your travel, then you pay off what you owe through monthly instalments. Sorting out your travel this way means you can grab a discount season ticket you might not otherwise have been able to afford outright. Those tickets work out a lot cheaper than buying your fares on the day, and your repayments will come out of your salary automatically so you don’t need to budget specifically for them. Over the course of a year, you could easily be looking at savings worth hundreds of pounds!

  • Even simple changes mount up

    Cutting down on everyday overspending is a marathon, not a sprint. It’s not about making occasional big, one-off savings. Instead, you’ll get better, more reliable results simply by chipping away at your day-to-day expenses consistently over time.

    Take your daily cup of coffee, for instance – and yes, we know we’re on dangerous ground by asking you to cut back on that essential caffeine hit. The thing is, you don’t even need to cut back your tea or coffee intake to make savings. Just consider whether you could bring in your own from home in an inexpensive flask. That way, when you feel your energy levels flagging at work, you’ve got the solution on-hand instead of having to trek to the local cafe to top off your tank. Those store-bought coffees might not seem like a huge drain on your wallet at maybe £3 a pop, but a couple of those a day will run you £30 per week. That’s up to £120 a month you could save, simply by making one tiny change to your daily routine.

    If you’re serious about saving money and developing better financial habits, take a look at our other guide, “4 Fixed Income Saving Strategies - Combine to Win!” That’s where you’ll find some of the very best budgeting tricks, like following the 50/30/20 rule and making “zero-based” budgets. In the meantime, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

    Saving strategies for fixed incomes

  • Dealing with deposits

    So here’s where things get serious. When it comes to deposits, you’re probably going to be paying somewhere between 5% and 20% of your new home’s asking price up-front. As of 2021, the average value of a first-time buyer’s home was a little over £264,000. That means some people were being expected to front up well over £50,000 as a deposit. That’s at the upper end, obviously, but even a 5% deposit at that price comes to over £13,000.

    The thing is, a smaller deposit might lower that initial hurdle quite a bit, but it makes the whole race track much steeper. The more you can afford to pay up-front, the lower your monthly mortgage payments will be. With a higher deposit, you’ll find yourself in a much stronger financial position for years to come.

    Let’s slot a few numbers in here so you can see how it looks in practice. We’ll assume you’re putting down a deposit on a house worth £264,000. You decide to be fairly ambitious, and go for a mortgage deal with a 15% deposit. That means you’ll be paying about £40,000 up-front, which you’ve given yourself a target of 5 years to save. At that rate, you’ll be aiming to sock away about £660 per month consistently over those 5 years to hit your goal. Challenging, but not impossible, so let’s talk about how to make it happen...

  • Dealing with redundancy

    Redundancies almost always come as a blow, but it’s important not to let yourself get too run down by them. It might sound like a cliché, but it’s so important to pick yourself back up as quickly as possible. Despite how it feels at first, this could be exactly the big shake-up you needed to move forward in your career – or even switch careers altogether. If you’ve been saving your pennies wisely (and following the budgeting advice in our other guides), you should ideally have as much as 3 months of your basic living costs socked away. Why not take some time to train up for the career you’ve always wanted?

    Even if that’s not an option, the time to make redundancy plans is before the sky falls in, rather than after. Preparing for a big upheaval in your work life is worth a lot more than coping with it after it’s already happened. If you’ve been warned that redundancies might be coming at work, the time to act is now. You’ll be in a much better position to bounce back if the worst happens – and even if it doesn’t.

    So what do we actually mean by preparation? As with so much of your other day-to-day financial planning, the first step is to take a good, hard look at what you owe. If you’re hit with a redundancy, for instance, the odds are good that you’ll wind up with a dent or two in your credit score. Lenders are going to think twice before extending you any kind of financing if you’ve taken a serious drop in your income. Now’s the time to get a firm grip on your debts, because they’re what’ll sink you if they get out of control while you sort out your work situation.

    We’ve already talked about the value of having rainy-day savings. Here’s the bit that trips people up, though. When you’ve got debts racking up interest, paying off what you owe usually a much smarter move than putting savings away. The interest on a debt will almost always grow a lot faster than the interest on your savings, making you poorer over time. Using spare savings to wipe out expensive debts like credit card balances, for instance, will prevent them building up to nightmare proportions while you’re still finding your financial feet.

    Read our saving strategies guide

    Speaking of balances, there’s a delicate one to strike here. Yes, paying down what you owe is a smart and necessary move, before or after a redundancy. At the same time, though, you still need access to emergency cash. If you wipe out your entire rainy day stash blitzing through your debts, you’ll be risking some very hard decisions later if it takes longer than expected to land a new job.

    As for specific, practical help you can get, it’s worth tackling the most important of your costs first. If you’re paying off a mortgage, for instance, you need to work out what kind of protection you’ve got to fall back on. There are schemes designed to help people through exactly this kind of situation, from both private organisations and the government itself. Search around and see if there’s one that’s a good fit for your situation.

    Next, go back to your budgeting basics. If you’ve read any of our articles on building budgets, you already know how much easier they make your day-to-day planning. Simple systems like the 50/30/20 rule take very little work to set up, but the pay-off can be immense over time.

     

    When you’re working out your budget, all you’re trying to do is plug the leaks in your finances by bringing down the costs you can control while protecting the ones you can’t. Have a look through our guides for more on budgeting, and try out our free 50/30/20 tool  for instant, practical help.

    Free 50/30/20 tool

  • What is tax debt?

    Tax debt is a situation that many people find themselves in from time to time. It can happen if you’re on the wrong tax code, for example, or if you’ve made a tax refund claim for more than you’re owed. However it happens, it’s important to solve the problem as quickly as possible. The longer you leave your debt unpaid, the worse the situation gets.

    One of the easiest ways to end up dealing with a tax debt is when you file Self Assessment tax returns – or when you’re supposed to and don’t. Even if you don’t actually end up owing any tax, if HMRC’s expecting a return from you and don’t receive one, there can be problems.

    This affects more than just the self-employed, too. There are several reasons why the taxman might be waiting for a Self Assessment return from you. Maybe you’re the Director of a company, or just making a little extra by renting out a room or selling regularly on eBay. Whatever the reason, if you don’t hit the Self Assessment filing deadlines, you’re probably going to get a penalty.

    If paying up straight away is a problem, you’ve got a range of options for settling up -and HMRC is usually more than willing to help you find a solution that works for both you and them. Ignoring the problem won’t resolve it, though, and can lead to automatic fines and penalties.

  • Penalties for not paying

    Tax debts have a nasty habit of creeping up on you, mainly because people don’t understand the rules. The first many people even hear about a tax debt is when HMRC gets in touch about it. Pretty soon they find themselves fines and stacking penalties. Not long after that comes the phone call from HMRC Debt Management and Banking (DM).

    You can’t afford to ignore a warning from HMRC that you owe a tax debt, even if you’re sure it’s a mistake. HMRC has a whole range of options it can pursue to reclaim the money they’re owed, including:

    • Direct Recovery of Debt, where they can access your bank account directly.
    • Selling your personal goods at auction.
    • Bankruptcy proceedings.

    Here are some common penalties HMRC can apply:

    • Missing the Self Assessment deadline (31st of October for paper returns, 31st of January for online filing: £100.
    • Up to 3 months late: daily £10 fines up to a maximum of £900.
    • 6 months late: £300 or 5% of what you owe if that’s higher.
    • 12 months late: £300 or 5% of what you owe if that’s higher.

    Keep in mind that HMRC automatically charges interest on late tax payments as well. If you’ve got a really good reason for missing the deadlines, you might be able to argue your penalties down or appeal against them. Don’t count on that, though. The list of valid excuses is pretty short.

  • When to talk to HMRC and what to say

    The basic rule of thumb about contacting HMRC is to do it sooner rather than later. For starters, you’re going to want to ring them immediately if you’ve got a payment or filing deadline looming and you already know you’re not going to hit it. If the deadline’s already flown by, of course, the longer you wait the worse things will get. Sending up a distress flare early is the best way to limit the damage – or even avoid it altogether.

    Another time to jump on the phone to HMRC is if you spot anything wrong with your tax statement. Mistakes on your Self Assessment can usually be sorted out easily before the deadline by just amending your tax return online. If it’s too late for that, you need to reach out to the taxman as soon as possible. You’ll probably have to sit on an automated queue for a while, particularly at busy times of year. It’s still a lot better than waiting for the mistake to catch up with you further down the line, though. If HMRC has to come looking for you, the ride tends to be a little bumpier.

    As for how HMRC can actually help when you’ve got a tax debt you can’t pay, there’s actually quite a lot they can do. If you know you’re going to have problems paying up, you might be able to sort out a “time to pay agreement” with them. You’ll have to cough up a little interest on top of what you owe, obviously, but it’s better than choking on a debt you can’t pay off at all.

    You’ll be expected to explain why you can’t pay in order to arrange a ''time to pay agreement''. That’ll mean forking over some information about what you’re routinely earning and spending. There might also be some questions about other family members’ earnings. Again, don’t resort to guesswork when you’re answering these types of questions. Arrange to call them back when you’ve got what they need.

    If you’ve got any particular circumstances limiting your ability to pay, HMRC will want to know about these too. Any illnesses or business crises you’ve been weathering can be useful information, for example. Your agreement might involve paying off a chunk of your debt now, then the rest by instalments later. That’s a good option if you can afford the initial lump, as it’ll make the debt cheaper in the long run.

    Once you’ve got your agreement in writing, you should also let HMRC know if your circumstances change. Don’t wait until you miss an instalment to get in touch. When it comes to paying off a debt like this, planning ahead is everything.

  • Dealing with debt

    As for what to do when you’re already stuck with serious debt problems, you’ve got a variety of options. Again, the right approach will depend on the situation.

    Debt Management Plan

    One example is the Debt Management Plan. This is basically just an agreement to pay off your debts in an affordable way. They’re often arranged through specialist companies, who charge a fee to share out your repayments among the people you owe. You’ll need to provide some information about yourself and your circumstances, and the plan can be cancelled if you don’t keep to the agreement.

    Administration Order

    For debts up to £5,000 when you’ve got a County Court or High Court judgement against you, you might end up with an administration order. In this case, it’s the local court that divides up your monthly repayments among your creditors. While it’s not ideal, it does mean that the people you owe can’t take any more action against you without a court’s approval. There’s a court fee to pay for this, but it can’t be higher than 10% of your total debt.

    Individual Voluntary Arrangement

    Another option is an Individual Voluntary Arrangement (IVA). You make regular payments to an insolvency practitioner, who splits them between the people you owe. IVAs give you more freedom than declaring bankruptcy. However, you can still end up facing bankruptcy proceedings if you break their terms. Your creditors get a say in this as well, of course. Unless the people you owe at least 75% of the money to agree, you can't take out an IVA at all.

    Debt Relief Order

    For debts up to £20,000, you can sometimes get a Debt Relief Order to help soften the blow. If you qualify for one, your creditors will need a court’s permission to pursue you. Also, you’re generally considered clear of debt after 12 months. DROs are designed for people with very little spare cash, and who don’t own their own home. You’ll need to apply through an authorised debt adviser. If you meet the criteria (if you’ve got less than £1,000 of assets, for example), you pay a £90 fee to an “official receiver” and accept a few restrictions. You can’t be a company Director, for instance. You also can’t borrow over £500, open a bank account or manage a business without telling people about your DRO.

    Bankruptcy

    With bankruptcy, your situation is considered by the Insolvency Service. If they agree, and your debts are all unsecured, you'll again be given some rules to follow about handling your money and assets. Some of your property might be sold to pay your debts, and you might have to turn over things like bank cards. Even your home can sometimes be sold, depending on your circumstances. Despite this, bankruptcy really does protect you much as your creditors. Your pension savings, for example, are usually kept safe - along with your household essentials and anything you need for your job.

  • Support available

    Remember we mentioned that the important thing is to understand you’re not alone? It’s so easy to get caught up in your own head when you’ve got debts that feel out of control. This goes for all kinds of debt, not just taxes. When there’s interest stacking up and legal threats looming, it can feel like a lonely and dangerous world. However, there’s a whole range of support for people with debt problems. The right help for you is going to depend on your circumstances – but in a lot of cases it might be as simple as claiming a tax rebate.

    Every year, HMRC ends up sitting on many millions in unclaimed tax refunds – simply because people don’t realise what they’re owed. When you’re paid via PAYE, many of the essential expenses of doing your job can earn you tax back from HMRC each year. For most refund claims, this means getting tax relief for travel to temporary workplaces, but there are lots of other expenses you can claim for.

    For the self-employed, the system’s a little different, since you’re actually being taxed on your profits. When you file your Self Assessment return, all the necessary costs of doing business count against the income you’re paying tax on.

    In either case, the rules on expenses can be tricky to get your head around, so lot of people choose to get professional help. Getting your taxes sorted properly, whether on your own or with expert help, can be a big step toward ending debt problems before they start.

  • Bringing the costs of your debts down

    There’s a general rule that a lot of people cling to about managing money troubles – you can’t borrow your way out of debt. It’s broadly true, as far as it goes, but it really doesn’t paint the whole picture. For instance, while borrowing to pay off debts isn’t always a great idea, it is possible to trade an expensive debt for a cheaper one. Not all debts are equally expensive – just ask anyone who ever switched a credit card balance to another provider for a 0% interest rate. You’ve got to get a bit hands-on to make the most of things like this. Even so, you could lighten your load a lot with just a few careful moves.

    We really do mean careful moves here. Don’t leap at the first quick loan option you find. Payday loans, for instance, are sold to you on the idea that they're easy to get and a fast way to nab yourself some short-term cash. That's all true, but you're really only squinting at the big picture here. If you don't keep your wits about you, you might just be digging a much deeper hole than the one you’re already in. For instance, let's say you get a payday loan of £600 for 6 months, at 0.75% interest a day. You get your £600 now, but at the end of the loan you'll be paying back a whopping £1138.29 – almost double what you borrowed. That's a “representative APR” (the interest rate plus all the associated charges) of 1,086%!

    With any kind of debt, the first thing you need to do is get control of your spending. Once you’ve got a handle on that, it’s time to look at things like:

    • Checking what benefits, grants or other support you might be entitled to.
    • Finding out if you can claim a tax refund.
    • Making sure you’re in the correct Council Tax band – a surprising number of people aren’t.
    • Move credit card and other debts to cheaper providers where possible.
    • Considering whether it’d work out cheaper to remortgage your home to pay off high-interest debts. Be careful, though, switching an unsecured debt to a secured one like this can be risky.

    A key thing to remember is that debt interest basically always stacks up higher and faster than savings interest. It’s painful to dig into your savings to pay off a debt, but it still means paying less over time.

  • What to do if your debt is affecting your mental health?

    If there’s one thing we still don’t talk about enough in the UK, it’s mental health. There’s still so much stigma attached to issues like stress, anxiety and depression – particularly in industries like construction. UK construction workers commit suicide at over 3 times the national average – and still so few people who are suffering feel like they can get the help they need. When you’re dealing with the toughest aspects of HMRC and debt, it can take a serious toll on your mental health.

    Thankfully, HMRC does have a few policies in place to help people through difficult times. In fact, it’s their legal responsibility to make what they call “reasonable adjustments” to assist people with certain mental health conditions in using their services. Depression, for example, can count as a “disability” and be covered under the reasonable adjustments system.

    Basically, if you qualify, HMRC can do a few things to make life a little easier when dealing with them. It may be as simple as contacting you in writing rather than over the phone, for instance, or taking extra care to make sure you’ve understood everything. You may be able to arrange for a relative or friend to speak to HMRC on your behalf, if you can’t handle it yourself. Even if your condition doesn’t fully count as a disability, you can still ask for HMRC to take it into account in their dealings with you. They’ve started taking mental health very seriously, working hard on improving their training to better accommodate sufferers’ needs. There’s even a “Needs Extra Support” (NES) system, where they tend to throw out their standard scripts and procedures in favour of offering more personalised, one-to-one help.

    The thing is, they won’t know to offer you all this extra support unless you explain that you need it. You have to ask them to put a note in your file describing your condition or problem. That way, you won’t end up going round in circles every time you speak to a new person. As always, the sooner you ask for help the better things will work out.

  • Signs of stress, depression and anxiety

    When it comes to mental health problems, the first and most important step is recognising the signs. Crucially, it’s just as essential to learn to spot them in your colleagues, friends and family as in yourself. Here are a few early warning signs that you or someone else may be struggling with mental health.

    • Difficulty sleeping, concentrating or remembering things.
    • Feeling nervous, irritable or overwhelmed.
    • Feeling burned out or hopeless.
    • Lacking energy or motivation.
    • Increased heart rate, sweating, trembling or rapid breathing.
    • Feeling weak, restless or tense.
    • Gastrointestinal trouble or changes in your eating patterns.
    • Difficulty making decisions or engaging with other people.
    • Uncontrollable worry, panic or anxiety.
    • Suicidal thoughts.

    That's a long list - and almost everyone can check off a few of those symptoms from time to time. The trick is recognising when you're getting swamped by things, and reaching out before it goes too far.

  • Taking manageable, practical steps

    With debt problems, it’s tempting to look for “quick fix” solutions – but that’s usually a mistake. A lot of people simply end up swapping one set of debts for another, potentially much larger, one. The same goes for looking after your mental health. Any looming problem become a lot more manageable when you break it down into smaller steps. With debt, that can mean spotting the signs of trouble early, understanding the causes and making a plan to tackle them.

    The exact same process applies to mental health. It can be tough to break the cycle of mounting money problems causing stress or anxiety – which then only worsen the money trouble. The best place to start is often with the practical side – cutting out problem spending and bringing down the cost of your debts. However, that won’t always be possible when your mental health is tripping up your efforts. Again, though, taking small positive steps is the surest way to get things moving in the right direction. That can mean coming to terms with the relationship between your mood and your spending habits, for example. Once you start spotting the patterns, it can get a lot easier to attack the problem at its roots.

    If you’re worried about getting professional mental health help, don’t be. There’s a lot more to it than the old stereotypes of medication and side-effects suggest. In fact, a lot of mental health issues can be handled without ever getting a prescription, through things like Cognitive Behavioural Therapy. For many people, improving mental health is all about changing the way they think. It takes a little practice, but can be very effective if you stick with it.

    The main point is to give yourself permission to take back control. Once you’ve seized the reins of your own mental health, you’ll be in a much better position to be proactive about your debts. While you’re at it, give yourself permission to get qualified help as well. There’s no shame in suffering from poor mental health, just as there’s no shame in struggling with debt. Don’t be fooled into thinking you have to tough out either alone. No debt crisis is impossible to fix, and there’s a whole range of organisations out there offering real, practical and judgement-free solutions. You can get free of your debts with the right guidance, and no one needs to suffer alone through a mental health crisis.

  • Where to get additional help?

    When debt issues lead to, or worsen existing, mental health problems, knowing where to look for help is critical. In terms of basic, practical guidance, you could do a lot worse than the Citizens Advice Bureau. They have a comprehensive service for debt issues, even if they’ve reached the point where people are repossessing your belongings. National Debtline is also a great option for free and confidential advice.

    Stepchange is a charity dedicated to helping people conquer their debt problems, helping 650,000 people a year. They’ve got specialised services for people with mental health issues with a free advocacy system. While we’re on the subject, there’s a fantastic list of helplines and support groups for mental health issues on the NHS website, covering everything from stress and depression through to panic attacks and bipolar disorder. There’s even a specialist charity called The Lighthouse Club for the construction industry, where mental health is a serious issue. They have a dedicated helpline and even a construction worker mental health app.

    Good planning, expert guidance and practical help will go a long way toward getting your fears and finances under control, and there are so many resources out there to get you back on track. Debt and depression both grow fastest in the dark. Don’t suffer in silence, particularly at the cost of your mental health.

    Other useful debt contacts, charities and organisations include:

    • The Money Advice Service (0800 138 77 77)
      • Provides guidance on a range of money and debt problems, from moving home to starting a family.
    • Mental Health and Money Advice
      • An online advice service focused on helping people to understand, manage and improve their financial and metal heath.
    • Money Saving Expert
      • The largest UK consumer advice website, helping to bring down bills, tackle debt and save cash.
    • Debt Advice Foundation (0800 043 40 50)
      • A charity offering free, confidential debt advice.  Aims to give you back control of you finances
    • Mental Health Foundation
      • Organisation helping people to understand, protect and sustain good mental health.
    • Mind
      • The mental health charity, determined to help people understand the relationship between money worries and mental health, and to show them how to improve both.
    • NHS Moodzone
      • A no-nonsense survival guide for people suffering from financial stress.
  • Debt consolidation loans

    We talked a bit about these earlier, but at heart a debt consolidation loan is just a way of getting other high-interest debts under control. Instead of making monthly payments to a collection of lenders, you take out a single loan to pay them all off at once. Once those other debts are settled, you’ll be left with only a single loan to clear – hopefully at a lower interest rate than you were paying before.

    Debt consolidation loans can be great for people struggling with expensive debts like credit card balances. Depending on your situation and lender, you might end up with a fixed or variable interest rate to deal with, but clearing credit cards and other loans can seriously boost your credit score, simplify your monthly finances and potentially save you a lot of cash overall.

    Read our guide: Debt and mental health

  • Missed a payment or two but think you can get back on track?

    Maybe a financial catastrophe – like a big car repair bill, unforeseen home expense or being out of work for a while – has eaten into your monthly outgoings and you’ve fallen behind with repayments. Don’t worry – the answer is easier than you think!

    Most companies are very understanding and will have dealt with this for other customers. Get in touch to explain the situation and ask if you can spread out any outstanding payments to ensure they are affordable for you. It’s in their interests to help you to stay on track.

    You can start by getting together your personal budget, showing your income and outgoings and money you have left over each month. Then you can offer to make affordable repayments.

    Would a tax refund help?

    An average 4-year tax refund from RIFT comes in at around £3,000. That could be enough to get you out of a financial pickle or at least help you to tick over while you get back on track. 2 out of 3 people don’t know they qualify for a tax refund.

    Check if you have a claim 

     

  • Overwhelmed with debt and can't see a way out?...

    There are many businesses out there who can help you to manage your debt over the longer term. They of course charge fees for their service, so while your monthly outgoings go down or least become more manageable, you will end up paying more to service and pay off your debt. Our best advice? Get help from a debt charity...

    There are a few charities dedicated to helping people with debt that operate nationally. They are expert in this area and their services are FREE. They can help you to negotiate the debt maze and find your way to a manageable situation. Most importantly, they won’t add anything to your debt with fees or charges.

    Here’s our top 3:

    StepChange

    A dedicated debt charity, StepChange offers the advice and support you need to get your finances back on track.

    Their website has a debt advice tool that can help you to create a budget, personal action plan and guide you with practical next steps.

    If you want to speak to an advisor, call 0800 138 1111. Lines are open Monday to Friday, 8am to 8pm and from 8am to 4pm on Saturdays.

    Citizen’s Advice

    Debt advice is just one of the services Citizen’s Advice offer across England. They have offices across the country and many have specialist caseworkers in their teams who can help you with anything from repossessions to negotiating with creditors.  

    Visit their website to chat online with a real-life advisor or call 0800 240 4420 for general enquiries.

    Adviceline (England): 0800 144 8848

    Advicelink (Wales): 0800 702 2020

    National Debtline

    Run by the Money Advice Trust, National Debtline has been helping people with free and confidential advice for more than 25 years. Their expert advisers have helped millions of people to improve their situation and take control of their debts.

    You can get advice online, via webchat or over the phone: call 0808 808 4000 Monday to Friday, 9am to 8am and on Saturdays between 9.30 and 1pm.

  • What is a debt management plan and should you get one?

    According to Moneyhelper.org, a Debt Management Plan (DMP) is something that: “…allows you to pay off your debts at a rate you can afford.”

    It might be for you if you have non-priority debts (see below). Any good Debt Management Plan provider will help you to work out your budget and put together an affordable payment plan.

    First off – do your research. The simplest way to do that is to get advice from one of the debt charities. Tell them about your circumstances and they can advise on the best course of action for you. As a rough guide, you can qualify for a DMP if your budget can cover at least £5 or more to pay each of your creditors. You make one single monthly payment to the Debt Management Plan provider who will pay your creditors for you. This makes the payments easier for you to manage.

  • Know your priority and non-priority debts

    Non-priority debts include things like bank loans, credit cards, student loans, water charges and benefits overpayments. These can be included in a DMP.

    Priority debts can’t be included in a DMP as stopping paying them has more serious consequences than non-priority debts.

    According to Citizens Advice, priority debts include:

    • Rent arrears
    • Mortgage arrears or secured loan arrears
    • Council tax arrears
    • Gas or electricity bills
    • Phone or internet bills
    • TV licence payments
    • Court fines
    • Overpaid tax credits
    • Payments for goods bought on hire purchase or conditional sale
    • Unpaid income tax, National Insurance or VAT
    • Unpaid child maintenance

    You should get advice on paying your priority debts before you set up a DMP.

  • Debt management plans - The PROS

    It’s easier to manage.

    If you have multiple debts, you can say goodbye to managing multiple payments each month. You agree one affordable amount and pay it to your DMP manager. That’s a lot less stress!

    You may pay less interest.

    Your DMP manager may be able to negotiate a lower interest rate which means you accumulate less debt over time. Lower interest rates also often men lower monthly payments.

    You’ll save money.

    Most people with a DMP save money. That’s because lower interest rates and an accelerated repayment time over the course of the plan can save you more money.

    Your credit score should recover.

    This isn’t guaranteed but because a DMP makes it easier to stay consistent in your repayments and reduce your debt quicker, these factors can contribute to making your credit score higher.

  • Debt management plans - The CONs

    If you have a credit card, your account will be closed.

    Once you’ve entered into a DMP, your account will be closed and it’s unlikely you’ll qualify for any further credit. This is to ensure you don’t take on any more debt while you have debt outstanding.

    You must be consistent.

    If you don’t meet your new monthly payments consistently, you may lose the benefits of the plan. DMPs work best for people who want financial change and to keep their agreement.

    Creditors don’t have to agree to a DMP.

    While most will, creditors aren’t obligated to enter a DMP. Your Plan manager will of course negotiate with lenders on your behalf but an agreement isn’t guaranteed and they may continue to pursue you for outstanding debt. 

  • Say no to fees

    Your Debt Management Plan does not have to cost you anything. There are companies out there who will charge you fees – they are in business to make money after all. And you are free to choose any of them.

    You can weigh up the costs yourself: they may be saving you money on interest and over the period of the plan. But if that benefit is outweighed by fees, then it will cost you money.

    All of the charities we listed above, plus a few more, will help you to set up and manage a DMP for free.

  • Make sure your protected

    If you decide to go with one of the many debt management companies out there, make sure they are authorised by the Financial Conduct Authority (FCA). It may seem like an obvious step but it’s an important one! 

  • What is a debt spiral?

    A debt spiral is when you continue to fall further and further into debt. Despite making payments your debts continue to grow due to the interest applied to them. The hole you're in just keeps getting deeper and it feels like your only option for survival is to keep digging – sometimes even taking on new debts to pay off your existing ones.

  • Is debt always bad?

    There's no getting away from it; debt is a basic fact of life for most adults in the UK, but that's not always the catastrophe it sounds like. The day-to-day realities of mortgage repayments, student loans and credit card balances are something pretty much everyone deals with for large chunks of their lives. As long as they're under control, properly managed debts are an accepted part of the financial furniture.

  • How does a debit spiral start?

    The big danger of a debt spiral is that what you owe can keep on stacking up even if you're keeping up to date with your repayments.

    How can that happen? Here's an example: suppose you're paying off a large, high-interest debt with hefty monthly repayments. Depending on your payment schedule, it's possible to find your repayments aren't even covering the interest piling up on what you owe—let alone bringing down the overall debt amount. Worse still, a lot of people end up taking out another loan to pay off the first.

    Debt spirals often start small. For example, the debt you decided to take on might have been realistic at the time, but then your circumstances changed unexpectedly. You might have taken a drop in income, or had to cope with unexpected extra bills. Recognising when you're at the top of the helter skelter of a debt spiral is the key to pulling yourself back from the precipice—but if your situation changes suddenly, it can be easy to slip.

    To put a few hard numbers on all of this, here's a breakdown of kinds of debts UK households were dragging around as of January 2022:

    • Total household debts: £63,582
    • Total unsecured debts per adult: £3,743
    • Average household credit card balance: £2,100

  • Mental health and debt spirals

    If there's one topic the UK hates talking about around the dinner table, it's money. The runner-up, though, is definitely mental health. If you're struggling with a debt spiral, there's no shame in reaching out for help. The problem is that so many of us don't feel that we can talk about this kind of thing. The Great British Stiff Upper Lip can do real damage when it puts people's mental health at risk. Stress, anxiety and depression can all go hand-in-hand with financial problems, and it's easy to feel like you're trapped with nowhere to turn.

    You see this most commonly with households with lower average incomes. The lowest earners in the UK, for instance, are over 3 times as likely to have debts totalling over half their yearly income than the top-earning 20%. Looking specifically at people dealing with mental health issues, sufferers are 20% more likely to have debt problems. They're also twice as likely to be falling behind on general household bills and close to two thirds more likely to be tackling Council Tax arrears.

    When it comes to mental health trouble, recognising the signs when you or others are suffering is so important.

    Here are a few quick pointers:

    • Trouble sleeping, focusing or remembering things.
    • Feeling nervous, irritable or overwhelmed.
    • Feeling burned out or hopeless.
    • Lacking energy or motivation.
    • Increased heart rate, sweating, trembling or rapid breathing.
    • Feeling weak, restless or tense.
    • Gastrointestinal trouble or changes in your eating patterns.
    • Difficulty making decisions or engaging with other people.
    • Uncontrollable worry, panic or anxiety.
    • Suicidal thoughts.

    Yes, that's a long list that we could probably all tick a few items off once in a while. The point is to spot the dangerous patterns of behaviour as they start, before you or the people close to you get swamped by them.

    Read our Mental Health support guide for construction professionals and find out more about the Lighthouse Club.

  • How to escape a debt spiral

    Getting out of a debt spiral is the same as pulling yourself out of a mental health slump. It's all about making reliable, manageable steps to solve the problems you're facing. The sad fact is there really is no quick fix for this kind of situation, and a lot of people end up stacking debts on top of debts looking for one.

    Whatever other steps you end up taking to fix the problem the first should be to list out the debts you're actually carrying. For each of them, you'll need to factor in how much you owe, how high the interest is and what your monthly payments add up to. Armed with that information, you'll be in a much better position to deal with the trouble.

    Next up, it's time to think about whether there's anything you can do to bring the cost of your debts down. You've got to watch your step here. Remember, if you think you've found a quick fix, you're probably heading into trouble. So, for instance, you've probably heard the old saying that you can't borrow your way out of debt. For the most part, that's true, but it's definitely not the whole picture. In the right circumstances, you can actually trade an expensive debt in for a cheaper one. Switching a credit card balance to a different provider with a 0% interest rate offer, for instance, will help stop the debt rocketing up for a while. Don't jump at the first easy-looking option you find, though. Grabbing a "payday loan" to pay off an urgent, high-interest debt could easily just spiral your troubles out wider.

    Other things to check up on when you're sizing up your debts might include:

    • Finding out if there are any benefits you should be claiming, or whether you're owed a tax refund.
    • Double-checking your Council Tax charge. A lot of people are paying too much because they're either in the wrong band or don't understand the rules. You can read more about this here.
    • Looking into remortgage options on your house to pay off expensive debts. Depending on your situation, this can work out much cheaper overall. However, trading an unsecured debt for one secured against your home carries risks of it own.

    Once you've scouted out the size of your debts, it's time to set your priorities for paying them off. There are two basic approaches here: the avalanche or the snowball. The avalanche method starts at the top by throwing everything you can at the debt with the highest interest rate, while paying just the minimum monthly amount for the others. The up-side of this is that you'll end up saving some cash overall. The down-side, naturally enough, is that you're tackling the hardest part first and probably won't get much of a sense of progress until that first debt's gone. The snowball approach, on the other hand, starts smaller and builds speed over time. You pay down the lower-interest debts first to get rid of them altogether, then build up to the bigger ones once they're all that's left. Yes, you'll wind up paying those higher interest rates for longer this way, but it can still be more manageable option if you mental health's been suffering. Either way, it's important to have a plan so you never feel like you're throwing your cash randomly at a problem that never stops growing.

  • Debt Management Plans (DMP)

    Basically, all a DMP means is that you've agreed a way of clearing your debts with your creditors. You commit to regular payments that you can stick to, paying off a small amount each month to the company organising the DMP. That company then divides the cash up between your creditors. You need to set up your DMP with a company that's authorised by the Financial Conduct Authority (FCA). They'll ask some questions about your financial situation and work out a plan, then ask the creditors to agree to it. Of course, there's a fee for this, along with a handling charge when you make your payments. You can check the details and work out if you qualify for a DMP here

  • Debt Relief Orders (DRO)

    If you owe under £30,000 in total, don't own your own home and have a low income, you can get a Debt Relief Order from the bankruptcy court. Essentially, what this means is that your creditors need the court's permission to recover what you owe them. Your DRO will restrict you in a number of ways, from preventing you from borrowing over £500 without telling the lender about your situation through to stopping you from starting a business without permission. If you can live with all that, though, you'll usually be declared free from debt after 12 months. For more details about DROs, check here .

  • Bankruptcy

    This is the big one, the older brother of the Debt Relief Order. Like a DRO, you get some protection from your creditors in exchange for accepting some restrictions on your finances and behaviour. Your situation will be checked out by the Insolvency Service and your rights and responsibilities will be explained. You might, for instance, have to hand over bank cards or sell off some of your possessions to help pay what you owe. Despite this, bankruptcy is as much about protecting you as repaying your creditors. Stick to the rules and, after 12 months, you'll automatically be 'discharged' from bankruptcy and your remaining debts will be written off. See here for more.

  • Seek Help

    The main point of all this is to show you that there's help available if you're struggling with the financial and mental fallout of a debt spiral. Here are just a few of the organisations set up to help with practical guidance and support:

  • Handling debts when you're getting a divorce

    No one wants to think about the money they owe when they’re going through a tough time in their personal lives. Sadly, though, around 2 out of every 5 UK marriages end in divorce – and a lot of those wind up lumping people with some severely messy finances to clean up. Most divorces happen while couples are in their early forties, which is a time in your life when you’re often dealing with some pretty hefty debts already. Yes, your kids might be leaving home about now, but there’s very little chance you’ve paid off your mortgage yet.

    The thing is, when you’re stuck in the middle of a divorce you’re probably going to be dealing with a lot of complicated laws and regulations. When there are debts involved, getting everything settled correctly can make all the difference between a clean break into the next stage of your life and dragging the weight of your past along with you.

    With all that in mind, let’s take a look at how you can make the best of a difficult situation.

  • Dividing up your debts in a divorce

    Romance and fairy tales aside, the truth is that a marriage is a pretty complicated financial and legal arrangement between you and your partner. That means it can be tricky to unpick it all neatly if the sky falls in. If there are personal or household debts involved, it’s critical to sort out exactly who legally has to shoulder them. There might be joint accounts and credit cards to consider, for instance, or loan and mortgage repayments to keep up. Those debts don’t magically go away just because you’re no longer married. If your name’s on the agreement, you’re still at least partly responsible by law for paying off what’s owed – even if you’ve got some kind of informal understanding about it with your ex-spouse.

    There’s another side to that coin, of course. Even if you’ve been stumping up for your partner’s debts for years, if those debts aren’t actually in your name then they’re not automatically yours to carry after a divorce. When you go through the official divorce process, this is something that the court will look closely at.

    Simple so far, right? Well, maybe not. You see, the court will have to weigh up a lot of complicated factors when deciding how your household finances get settled. It’s not always as cut-and-dried as looking at whose name’s on an agreement. For instance, if one of you has run up a debt for something that both partners have benefited from during the time you were married, factors like that can play heavily into the final decisions about who owes what.

     

  • Make solid arrangements

    It can be difficult to untangle yourself from joint debts when you’re getting divorced, particularly big loans and mortgages. After all, a lender’s not going to want to let you off the hook just because your marriage ended. Depending on your lender and situation, you might be able to arrange to separate the terms of a joint loan, but it’s not safe to count on that being possible or practical. The better solution, awkward as it might feel, is to talk it over with your ex-spouse and agree on a fair way to handle the repayments. You’re in each other’s hands a little bit here, since if the courts decide you’re jointly responsible for paying off a loan you can’t simply wash your hands of your ex-partner’s share of the repayments. If they fall behind on coughing up what they owe, it’s not just their own credit rating that’s being put at risk. As unfair as it sounds, even paying your end of the loan reliably isn’t enough to protect you if your former other half doesn’t do the same.

    It’s worth remembering that you’re not fighting against each other here. It’s in both of your best interests to tackle your joint debts responsibly. You might decide to open a joint account to make the repayments from, for example, or for one of you to pay the whole amount and get the other to reimburse them for their share with a standing order. It’s up to you both to decide how to handle things, but it needs to be done properly and cooperatively if you’re hoping to keep clean credit ratings for the future. If it looks like there’s going to be a problem for either of you, it’s worth getting in touch with your lender as soon as possible. You might be able to sort out an easier payment schedule with them.

  • Protecting yourself

    Divorces can be incredibly stressful, and there’s a strong link between debt and mental health problems. Remember, it’s not just your financial well-being at stake here. Take a look at our other guide, Mental Health and Finance, for practical ways to look after yourself when debts are looming.

    As far as protecting your money goes after a divorce, there are a few simple step you can take to make things a lot safer for you both. One of the most important is to protect all your legal rights involving your home. Unless your divorce was an extremely amicable one, you’re unlikely to both end up living under the same roof. Depending on your situation, you might want to look into changing the ownership of the property, or ‘registering your interest’ in it if your name’s not on the mortgage – which would at least mean it couldn’t be sold on or re-mortgaged without you knowing.

    Of course, there’s nothing preventing you from continuing to own the property together, even if only one of you is using it. The trouble is, if you were to die, your ex-spouse would almost certainly end up inheriting the place outright – which is something you may or may not be happy with. Explaining your situation to your mortgage provider is a smart move however things end up. Again, remember that paying off joint loans like this remains the collective responsibility both ex-partners in a lender’s eyes. You don’t suddenly only owe half as much just because you got divorced. If you’re renting, you’ll obviously want to talk your landlord through your change in circumstances. Again, depending on how you’re fixed, you might decide to get one of you taken off the agreement.

    Next, you should think about any other joint finances you share with your ex. Talk to your banks, lenders and providers to set up arrangements to protect you both. For instance, you could change the terms of any joint accounts so that neither of you can take cash out without the other’s permission. If you’re getting your income paid into an account your ex has access to, you’ll probably want to change that, too.

    Finally, you should get your credit report altered so it’s no longer tied to your ex-spouse’s. Being married doesn’t necessarily create a ‘financial link’ between you, but if you’ve bought or rented property together or set up any joint finances then your ratings can affect each other. To cut those ties, you’ll need to talk to the credit reference agencies and provide proof that your finances are no longer linked. You can read more about credit scores here.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • The Deposit

    Before you even get off the house-buyer starting blocks, you’ve got at least one high hurdle to get over, and that’s the deposit you’ll need. Deposits are simply the down payment you have to make up-front before you can kick off your mortgage. Depending on your mortgage agreement, you could be looking at fronting up a minimum of 5% of the property’s value from the outset – but in many cases it’ll be a lot more.

    There’s a careful balance to strike when you’re picking the right mortgage deal for you. The more you can save up as a deposit, the lower your eventual mortgage payments will work out. That means you’ll own your home outright sooner and have to pay less interest along the way. However, deposits can be a serious challenge to budget around, and a lot of first-time buyers feel like they’ll never be able to sock away enough to get a foot on the property ladder. See our guide, 6 Ways to Save for a House Deposit ” for more on this. For now, though, the government’s own mortgage guarantee scheme’s here to make things a little easier. If you qualify for it, you can put down as little as 5% up-front, with the scheme kicking in up to 20% of a newly-built property’s value (or 40% if it’s in London).

    6 ways to save for a house deposit

  • What's the difference between a P45 and a P60 form?

    A P45 is form showing how much PAYE tax you’ve paid in the current tax year. You’ll get one of these from your employer when you stop working for them, which may be part-way through a tax year.

    A P60 is an end-of-year certificate showing all the taxable income you’ve made and the PAYE tax and National Insurance you’ve paid on it for the whole tax year. It also includes details of your Student Loan repayments.

  • Use discount extensions and plug-ins

    This is another cool hack for shopping online. If you’re not keen on cashback sites or can’t find what you need there, a simple browser plug-in can do a lot of your bargain hunting for you.

    Here’s how it works. Wherever you shop on the web, with a discount code extension installed your browser will give you a heads-up on any discount codes it can dig up for you. The Honey extension, for instance, works with over 30,000 sites and automatically applies the best discounts it can find to your online shopping cart. Combine that with some basic impulse control and you’ve got a reliable winning strategy for saving cash. Obviously, you do still have to stick to buying only what you need. After all, no discount will ever leave as much money in your pocket as not making the purchase in the first place.

  • Some examples might include:

    • Gym membership
    • Streaming services
    • Eating out
    • AND Socialising
  • Doing it yourself

    If you’ve got the skills, taking the DIY route is absolutely the best way to cut down the cost of your home repairs. In fact, the longer the job takes, the more you’ll end up saving over the span of the work. That cost reduction frees up more of your overall budget to go into things like better materials – or simply back into your pocket. Keep in mind that you do need to be up to the task if you’re planning on doing all the work yourself. The UK is a nation of have-a-go heroes when it comes to DIY, and over 60,000 of us end up in hospital in an average year as a result. A single typical botched home repair ends up costing an extra £200 to fix, meaning a lot of us are paying more in the end than if we’d called in the professionals in the first place.

    Don’t worry if you’re not an expert, though. You can still cut down your labour costs with a little advance preparation. Labourers charge hourly rates, and not all the time you’re paying for is spent on the most technical parts of the work. Even just tidying up and prepping the workspace ahead of time can save you money.

  • Do students pay tax?

    Sadly, the answer is a resounding yes! Depending on your situation, you could find yourself paying a few different kinds of tax as a student. Here are a few examples:

    Income Tax

    We’ve already talked a bit about this above but, even when you’re a student, when there’s money coming in the taxman wants his share. What you pay depends on what you earn in a year:

    Income tax brackets

    If you’re sharp-eyed, you’ll spot that you can actually earn a fair bit of cash before you start paying any tax on it. The Personal Allowance is the tax-free chunk of your earnings, and at £12,570 it means that a lot of students won’t have to pay Income Tax at all! Again, though, that doesn’t mean that HMRC won’t dip its fingers into your pocket. Remember we talked about National Insurance? Well, here’s what that looks like:

    • Class 1: 12% on income from £166 to £962 a week. 2% on anything over that.
    • Class 2: £3 per week if your profits are £6,365 or more.
    • Class 4: 9% on profits between £8,632 and £50,000. 2% on anything over that.

    Tax on savings interest

    This is still broadly lumped under Income Tax, but it’s worth mentioning separately. Students are usually in the Basic Rate tax bracket, and the rules say that means they can earn up to £1,000 of savings interest tax-free a year. When people earn enough to pay Higher Rate tax, that allowance drops to £500 a year.

    VAT

    Not everything you buy is eligible for VAT. When it is, the tax is simply lumped into the price tag so you don’t have to do anything (other than decide if you can still afford it). If you’re running your own business, you sometimes have to register for VAT and start charging it to your customers. You can then claim back the VAT you’re paying on some of your business costs. You won’t need to bother about this until you’re earning over £85,000 (as of 2019/20), so for most students it won’t be an issue.

    Council Tax

    Council Tax is charged on pretty much all UK properties, from mansions to caravans. It’s based on the value of the property, but there are some important rules for students to understand:

    • If everyone living at the property is a full-time student, no one has to pay Council Tax.
    • Halls of residence are usually exempt from Council Tax.
    • In properties where not everyone’s a full-time student, those who are won’t have to pay.
    • Part-time students can sometimes claim a reduction in their Council Tax, depending on their circumstances and where they live.

    Read our guide: Council Tax Debt

    Student Loans

    Okay, so you won’t actually pay tax on your loan as if it were income, but the chances are you’ll be paying it off through the tax system. Again, there’s a threshold involved – meaning you won’t have to pay any of your loan back if you don’t earn enough to qualify. The threshold depends on the kind of loan you’ve got.

    For 2019/20:

    • Plan 1: £18,935
    • Plan 2: £25,725

    As for how you’ll be making those repayments, it all depends on the way you pay your normal tax. If you work for an employer, you use PAYE. If you’re self-employed, it’ll be in your Self Assessment tax returns. Some people might actually be both, meaning they’ll have to use both systems. They won’t end up paying double, though. The payments made through PAYE count against your Self Assessment tax.

    Postgraduate loans are slightly different. For these, you start paying once your earnings hit £21,000, and on other income over £2,000 a year that you’re declaring via Self Assessment.

    Can I get any tax credits or benefits?

    The Universal Credit (UC) system doesn’t really care if you’re a student or not. You’ll still have to meet the normal criteria to qualify for it. If you’re studying full-time, you’ll need to fit one of the following descriptions to claim:

    • You’re 21 or under in full-time, “non-advanced” education (up to A-level equivalent), with no support from your parents.
    • You’re responsible for a child (included adopted or fostered children).
    • You live with a partner who’s eligible for Universal Credit.
    • You’ve hit Pension Credit age and live with a partner who hasn’t.
    • You’re disabled and getting Personal Independence Payments, Disability Living Allowance, Attendance Allowance or Armed Forces Independence Payments.

    If you only study part-time, you might still be able to qualify for UC. There are a few other hoops to jump through, though, like being available for work. Either way, if you’re earning money while you’re a student, it can bring down the UC you can claim. That’s worked out based on the income you’re making minus a fixed amount to allow for expenses.

    You apply for UC online, and you’ll be expected to provide some basic information about yourself and your circumstances (contact details, banking and financial information, etc.). You might have to ring up to book an appointment with a “work coach” - and won’t get your UC if you miss it!

  • Does it matter if I'm self-employed?

    If you're self-employed in the healthcare sector you may still be owed money. The difference is that you can’t claim a PAYE tax rebate, since you’re outside of the PAYE system. Instead, you’ll record all your essential expenses in your yearly Self Assessment tax return. Those costs, which you’ll still need to have detailed records of, will then bring down the amount of profit you’re being taxed on.

  • Don't stop saving

    Remember, the good habits you’ve built while saving for your new home don’t lose their benefits once the ink’s dry on your contract. Even after you’ve hit your goal and moved in, there’s still a lot to be gained from keeping your saving system going. Ideally, you’re going to want to stick to the 50/30/20 rule we mentioned before. That 20% you’ve got used to socking away is going to develop into an amazing investment in your own future if you stick with it.

  • What are your fees?

    Our standard charges are:

    • Tax refund if you're employed under PAYE: 36% of refund claimed including VAT (minimum fee £60 including VAT)
    • CIS Tax Refund including tax return: £330 (including VAT)
    • Tax returns from £114 (including VAT)

    Read more about our fees.

    When we receive your refund from HMRC we take out our fee and then pay it the refund to you. There are no up front charges to pay for anything. If you are not due a refund then there is no charge.

    Before we send your claim to HMRC we sent a copy to you with a full breakdown of all the fees so you can clearly see:

    • The total refund
    • Our price that will be taken out of it
    • The VAT due (VAT goes to the government, as on all goods and services)
    • The amount you will receive

    You will need to sign and send this back to us to say you have read, understood and agreed with it, along with a declaration that all the information you have provided about your claim is true. This means you will never be charged any fees you have not agreed to.

    There are no further fees to pay, and no hidden charges.

    All aftercare is included (if you need us to call HMRC on your behalf, if you have a problem you would like us to resolve with them, if your tax code needs correcting etc).

    Your refund is covered by the unique RIFT Guarantee which means that whatever happens, your refund stays in your own pocket and will never go back to HMRC. If we fight any HMRC enquiries for you (still included in the cost) and if anything did go wrong (which it never has in 15 years) we would pay back the refund to HMRC ourselves.

    We will also send you a reminder when it's time to see if you have a claim next year.

  • Not sure if I can claim?

    Does it apply to me?

    The short answer is "yes".

    While many people get their travel and work expenses reimbursed by their employers those in the Armed Forces, Construction Trades, Security and Offshore industries often don't.

    To get the money back you have to put in a claim to HMRC to show what you've spent so they know how much to pay you back.

    Sadly many people, 2 in 3, who are owed tax refunds don't claim them back - meaning they are losing a chunk of their wages.

    It's our mission to improve knowledge about this so that all workers who should be claiming are claiming.

  • I don't know whether I've got time to claim?

    We know what it's like - time flies and it's hard to find a moment to get round to things.

    The good news is, we take care of everything for you - the whole reason we do what we do is to take the stress off your hands and give you time back as well that hard earned cash.

    All it takes is 10 mins on the phone or chat to get an average of £2,500 refunded. That's got to be the most valuable time you could spend on your phone today.

    Once we've got your info we do all the chasing, calculations, sorting out the payments - and that's before we even get to our all inclusive aftercare!

  • Is it legal to claim?

    Yes - absolutely! If you've paid too much tax, you're fully entitled to a tax rebate.

    Travel and mileage tax refunds for travel to temporary workplaces are claimed under Income Tax (Earnings and Pensions) Act 2003, sections 336-339.

    There's over 1000 pages of rules and regulations but our experts will get it sorted for you. They have qualifications from the Association of Tax Technicians, Associations of Accounting Technicians, and The Association of Chartered Accountants. Having these qualifications mean they are bound by all its rules, regulations, ethics and codes of conduct in addition to our internal standards.

    HMRC can't issue automatic refunds for Work and travel expenses because it's not based on information they have - like your salary or tax code. You have to prove what you've spent and claim what you're owed, which puts far too many people off getting back their own cash.

  • What paperwork do I need?

    I'm not sure I have the info?

    To make your claim the key things we need to know are:

    • How much you earned
    • How much tax you paid
    • Where you work, 
      How much tax you paid
      Where you workem, who you worked & how you travelled there
      How much you spent on work related expenses (travel, uniforms, tools, etc)
      Don't worry if you haven't kept exact records of everything for the last 4 years.

    We have access to a number of specialised custom built systems that link to HMRC, Government depts, DVLA, travel routes, etc and can get the information for you.

  • I want a recommendation

    I don't know anyone who's done it.

    You're absolutely right to be cautious. There's a lot of scams to be aware of and a word of mouth recommendation from someone you trust is the best way to be sure.

    We don't know who your friends are, but if they're in the Armed Forces, Construction Trades, Security or Offshore ask them if they've used us. 97% say they would recommend us.

    A lot of people have - we've helped 130,000 customers make claims in the last 20 years - but British people don't really talk about money so it's not something that tends to come up in conversation.

    Otherwise, check us out on Trust Pilot. It's the next best thing.

  • What happens next?

    First we need to talk to you on the phone or online run through some questions about your work and travel and tell you how a claim is made.

    If you would like to claim for you we send you a form to sign that lets us talk to HMRC on your behalf to do that.

    We'll then give you your own Personal Tax Specialist who will gather all the information needed to calculate exactly what you're owed.

    We send you the total to approve the amount and what our fee comes to and then submit it to HMRC for you.

    You don't pay any fees upfront. To make it simpler for you we take the fee from the refund total and then pay it into your bank account.

  • Downsize or reduce rent

    Another tip is to look again at the numbers you crunched when you set up your 50/30/20 budget earlier. While your rent definitely went on your “essentials” list, if you can move to a place that costs you less while you save for your deposit, you could hit your goal much faster. Shaving £100 of your monthly rent, for instance, would see you saving an extra £1,200 a year.

    It actually goes a little further than that. If you move to a smaller place while you save, it’ll probably cost a little less to run. Your energy bills will be lower, for one thing, along with your Council Tax.

    Read guide: Dealing with council tax debt

    Another option is to look into a “property guardian” arrangement. Some property owners will put a roof over your head in exchange for you looking after the place for them and keeping squatters out. Failing that, even just renting a room from a homeowner can mean a significant boost to your saving potential. Some people - particularly older homeowners - will charge you very reasonable rents in exchange for helping out around the house or running a few errands once in a while.

  • Draught proofing: save £25-£50 a year

    Draught proofing your home could be worth a decent chunk of change at the end of the year. It’s one of the simplest things you can do to cut down the heat you’re wasting, too. While it’ll probably cost a couple of hundred pounds to get your draught proofing done professionally, it’s not that hard to do if you’re into your DIY.

    You should think about your windows, obviously, but there are plenty of other ways to stop letting the warmth out. Your front door’s an obvious culprit, from the gap underneath to the keyhole and letterbox. You should also take a look at your pipework, loft hatches and even your chimney. If you’re not actually using your fireplace, just draught proofing your chimney could save £18 a year on its own.

  • Will I end up on an emergency tax code if I don't have a p45?

    You might well find yourself on an emergency tax code if your new employer can’t check your P45. If this happens, you’ll see one of these codes on your payslip:

    • 1250 W1
    • 1250 M1
    • 1250 X

    These codes are only ever meant to be temporary, so it’s a good idea to get your proper tax code sorted out as quickly as possible.

  • Does my tax rebate get paid by my employer?

    Sometimes, you might get your tax refund handled automatically through the PAYE system. If HMRC already has all the information it needs to work out how much tax relief you’re owed, then they can alter your tax code to make sure you end up only paying the tax you actually owe. There are a couple of potential hiccups with this system, though. For one thing, HMRC can only refund you the tax for any work expenses they already know about. When you travel for work, for instance, HMRC won’t automatically know how much mileage you’re doing or what other costs you're running up just to do your job.

    The other problem is that your work expenses will probably change from year to year. When HMRC changes your tax code, it assumes your work costs will always stay the same. That means you’ll probably end up on the wrong tax code – which is something you really want to avoid. In either of these two cases, you’ll need to make a full tax refund claim to get back everything HMRC owes you, and you’ll need to get your tax code fixed quickly if it’s wrong. Thankfully, this is something that RIFT will automatically take care of for you when we sort out your tax refund paperwork. There’s no extra charge for this; it’s all part of the RIFT service!

  • My employer pays for my laundry or provides facilities for it. Can I still claim?

    No, if you aren't footing the bill yourself you can't claim back tax on the costs.

    There's another little wrinkle here, too. Suppose your employer has provided you with a laundry room, but you don't like to use it for some reason. Maybe the machines sometime chew your socks up, or maybe the place just smells funny. Either way, the fact that those facilities exist means that you can't claim a uniform tax rebate. Likewise, if you're getting reimbursed for your costs already, you can't claim for them.

    Another important point is that employers sometimes arrange to sort out tax relief on your behalf. In those cases, you obviously can't claim it again. However, not everyone realises that the arrangements are already in place when they make their claim. Fortunately, the taxman understands how this can happen. Probably the worst you could expect is a polite letter from HMRC explaining why your claim was denied. Obviously, it's still better not to make the mistake in the first place, though.

  • Stop heating empty rooms: save up to £75 a year

    Your main thermostat isn’t the only way to control your heating system, and not every room in your home is going to need the same amount of heat. Depending on your situation, this could be as simple as turning down the radiators in rooms you’re not using much. Closing doors to rooms you’re not using can make a difference too. The Energy Saving Trust say, if you’ve got thermostatic radiator valves you could save even more. Fitting these could save you £75 a year.

  • Equity loans

    If you’re looking for more ways to take some of the financial pain out of buying your first home, you could do worse than to look into the Help to Buy Equity Loan system. This is assuming you’re actually buying a place to live in, rather than as an investment or second home. The rules for these loans say you have to front up at least a 5% deposit, but can then borrow up to 20% (40% in London) of your new home’s market price, interest-free for 5 years! The rules have a few wrinkles in them that it’s worth keeping in mind, so check out the gov.uk site for more details.

  • These include:

    • Mortgage or rent
    • Household Bills
    • Food Shopping
    • Transport
    • Credit cards
    • AND Work-related expenses, like travel
  • Estate agent fees

    Estate agents tend to base their charges on a percentage of the sale price of the property they’re handling for you. This means you’re typically looking at a fee of 0.75% to 3% of the property price plus VAT. This can vary depending on the type of contract you’ve got with them – so again, go in with your eyes open so you don’t get caught unawares by this.

  • Here's a breakdown of ETFs you can buy

    You've got a few options to match what you're hoping to do with them:

    • Bond ETFs can be a good way to get a steady income from your investment. Like any other ETF, what they pay out based on how well the individual investments are doing. In this case, those investments will be some combination of government, corporate and municipal bonds. However, while those kinds of bonds come with fixed end dates, an ETF made up of them doesn’t.
    • Industry ETFs are investments that track the overall performance of a specific sector. Instead of investing in any one company, you’re spreading your cash across a broader view the industry so all your eggs aren’t in the same basket.
    • Commodity ETFs are generally for people who want to invest in something pretty tangible, like wheat, oil or gold. Again, though, they’re about “diversifying your portfolio” of investments and protecting your money from a drop in the stock market. It’s a bit like owning a stash of the commodity itself, but without the related storage costs and other expenses.
    • Stock ETFs are a good way of investing in a particular industry without having to buy individual stocks. You’re getting most of the good side of investing in a basket of equities with less hassle and expense than normal stock mutual funds.

     

  • Draught excluders

    While we’re talking about draughts, a few decent excluders will go a long way toward making the most of your energy use and cash. Draught excluders can help shore up the savings when you use them alongside your basic draught proofing. They’re easy to get hold of – or even to make yourself. Just a large piece of fabric stuffed with rice can make a decent enough excluder. You’ll need to think about where you use it, though. Draught excluders can be great at their job, but they’re only as good as where you put them. Stick one under a door, for instance, and it’ll be next to useless the first time someone opens it. Better to use an inexpensive weatherbar or brush strip in those cases. They’re attached to the door, so they won’t get nudged out of position when it moves.

  • Exercise at home

    Gym memberships always seem like a good investment at the time. You’ve put your money where your mouth is, now all you’ve got to do is stop filling that mouth full of chips, right?

    The trouble is, with any investment, you’ve got to think about the returns you’re getting. Suppose you hit the gym 3 times in a month on a £30 membership scheme. That’s £10 per visit – and you’re paying the same even if you never set foot through the door!

    Instead of pricey subscription packages, invest in a cheap set of weights or resistance bands. You can get them easily online, and YouTube is packed with free exercise tutorials you can follow from home. No monthly fees, no travel costs to factor in and nothing to stop you reaching your financial fitness goals.

  • Expect the unexpected

    This is crucial. Don’t assume you’ve anticipated every cost or problem you’re going to run into. When you’re building a budget around home repair bills, you’ve got to expect that you’ll hit snags or delays along the way. Sometimes, all they’ll end up costing you is time – but you can’t afford to count on that. If you find yourself needing to add work-hours or extra materials to the job, you’ll feel the pain of them in your wallet – and you’ll be glad you allowed some breathing space in your budget just in case.

  • Will I need to file a tax return to claim tax relief?

    If you’re claiming for more than £2,500 in work expenses, HMRC will expect you to send them a Self Assessment tax return to claim your tax refund. As always, RIFT will take care of this for you when we handle your HMRC tax rebate. We’ll get you registered and make sure your tax return’s filled in and submitted correctly.

    Read our guide: Tax Returns

  • The 'Tied' Adviser

    A “tied” adviser, is someone who really only handles products from a single supplier. You can expect them to have detailed knowledge of that company’s products, but you probably won’t get a full picture of the alternatives available elsewhere.

  • The ''Multi-Tied'' Adviser

    A “multi-tied” adviser, is similar to a tied one, but will be able to help you with a wider variety of suppliers and options.

  • A ''Whole-Market'' Adviser

    A “whole-of-market” adviser, is someone whose advice would cover a much larger range of providers and products. These are similar to Independent Financial Advisors in a lot of ways - but not all, as we’ll see in a moment.

  • Looking forward to retirement

    Pensions can be kind of a scary business sometimes and, in a few important ways, they’re a lot more complicated than they once were. You’re making big decisions when you plan for retirement. You’ve got a huge responsibility, and your choices can affect more than just your own future. Even if your money situation’s fairly simple, you could easily be looking at spending decades in retirement, so you’ve got to find a way to make your savings last.

    So, where do you go to get solid, trustworthy advice when you’re heading toward your last few working years? More to the point, what’s it going to cost you? Here’s a basic breakdown of the kind of help you can find, and a few ideas on how to pick an adviser that suits your circumstances.

    Guide: How much do you need in your pension pot?

  • Do I even need an adviser?

    Good question – and not always an easy one to answer.

    It’s obviously best to go into any major money decision with good advice. That’s just common sense. Even so, paying for an Independent Financial Adviser (IFA) to look at your situation may not always be worth it.

    Don’t get us wrong – there are plenty of reasons to talk to a financial adviser. You might find yourself in an unusual or complicated financial position, for instance. Maybe you need help setting goals or understanding the risks of investing. On the other hand, if you’ve got relatively simple needs and plans, flushing a load of cash away on an adviser might not be a good foot to set out on in retirement.

    Generally speaking, the less money you’re playing with, the less help you’ll probably need managing it. However, every decision you make will matter – so again, blowing a ton of cash on professional advice may not be the smartest move up-front.

    So, how much money are we talking about here? Obviously, there’s a range of prices on offer for financial advice services, so a lot depends on where you’re looking and what you’re asking for. Also, it’s easy to get wrong-footed at the start with offers of free first consultations. By all means, take advantage of these, just to test the water. Keep in mind, though – you could well be looking at a sudden bill of up to £500 the next time you set an appointment.

    Once you’ve picked an adviser (and a price) you’re comfortable with, you’re probably going to find yourself staring facing an hourly rate for your actual advice. Prices for this kind of help can feel pretty steep if you’re not prepared. We’re talking in the range of anywhere between £75 and £350 an hour here, with £150 per hour being a reasonable average to expect.

    Things change if you’re looking for more of a “hands-on” style of financial help. For instance, you might need your adviser to take more of a long-term role in handling how your retirement money’s invested. At this point, the costs involved will largely depend on the size of the portfolio you’re playing with (basically, what’s in your investment “basket”). Typically, you’ll be charged a percentage of the total value of your investments. Again, there’s a range of prices for this kind of direct management, but you’re probably looking at somewhere between 0.5% and 5%.

    The bottom line of all this is that the kind of advice you need with your retirement savings – and the price it’s worth paying for it – will depend on what your actual goals are. If you’re still thinking about that, we’ve put together two articles to help point you in the right direction:

    Pension or ISA

    SIPP or ISA

  • Why picking the right independent financial adviser matters

    So, right now you’re probably wondering what you’re actually getting for all this money. Maybe it’s even starting to look like it’s not worth paying an adviser in the first place. The thing is, getting professional advice on your pension can genuinely be a financial life-saver. In fact, there are times when it’s actually a legal requirement.

    The first thing to realise about choosing your adviser is that there’s a world of difference between the real professionals and the dodgy financial “cowboys” out there. The choices you end up making for your retirement cash will only be smart if the advice you took when making them was good.

    You do have a fair bit of protection to fall back on, in the form of the Financial Conduct Authority (FCA). The FCA actually has a list of “dodgy dealer” financial advisers you should absolutely avoid, along with a page for reporting any scams or scammers you might run into. There’s a limit to how protected you can be, though. While the FCA’s general rules about how an adviser conducts its business cover all IFAs in the UK, that doesn’t mean they have to keep your best interests at heart in everything they do. Here’s where things get a bit technical – but bear with us for a minute. Financial advisers in the UK aren’t strictly required to stick to “fiduciary standards”. These are basically a set of rules that determine how trustees (people making financial decisions for someone else) take care of the assets of beneficiaries (the “someone else” – in this case, you). IFAs aren’t technically bound by these standards, but the FCA is still constantly pushing to make things safer for you. So, what about the times when you absolutely have to get financial advice? Are you protected then? Take pensions, for example. If you’re trying to transfer a pension that’s worth over £30,000, the law says you need to get advice on the process. Your financial advisor has a responsibility to stand behind the advice they give. When that advice falls short, there are complaints procedures and systems of compensation to help you limit or undo the damage.

    It’s worth keeping in mind that the term “financial adviser” isn’t just describing one thing. Depending on what you’re looking for and where you’re looking for it, you might end up talking to a range of different ones.

    Another thing to remember is that most advisers you’re dealing with will be looking after their own money as much as yours. Almost all of them will be taking a commission from the providers you end up choosing based on their advice. Yes, they might well be taking your money in exchange for steering you in the right financial direction. You won’t be the only one who’s paying them, though. While that may be obvious enough when you’re talking to a tied adviser, it’s also true of the whole-of-market ones. They’ll certainly want you to be happy with the choices they offer you – but they’ll have financial goals of their own to look after, too.

    In the investment world, you can see this kind of thing in action pretty clearly. When choosing between “active” and “passive” investments, you’ve likely to see an investment manager being held up as a big selling point of actively managed funds. It makes sense, after all. Having an expert directly looking after your investments can only be better than going it alone, right? In fact, when put to the test, about 90% of the “passive” index tracker funds that were measured performed better over 20 years than the actively managed ones. Even over just 3 years, there was no real benefit to active investments. Basically, you could argue that investment managers can sometimes be more interested in what makes them money than in what gives your investment the best chance of growth.

    So, let’s look at IFAs again. As we mentioned above, they’re not that different from whole-of-market advisers, since they’re not tied to any specific company. That means they can give you the widest possible range of advice. Yes, some of them will still get a commission when they steer you toward specific options or providers. That’s not true of them all, though. Some IFAs do work purely for the flat-rate fee they charge you for their time, effort and expertise.

    By and large, an IFA will offer the most custom-built advice, factoring in your full personal situation, plans and goals. This is true whether they work for a larger IFA company or are just in business for themselves. If you’re looking for a truly independent opinion on how to sort out your retirement finances, then this is probably your best chance of getting one.

  • Why do I need to set financial goals?

    When you’re setting off on any kind of journey, you need map of the territory and a route planned out. If you don’t start with a clear picture in your head of where you’re trying to get to, you’ll never know whether you’ve made it there or not.

    Planning out your financial goals isn’t nearly as difficult as it probably sounds. All you’re doing is setting your sights firmly on the future you’re trying to build. After that, it’s just a matter of stacking one brick on top of another until you make it. There are bound to be a few obstacles to negotiate along the way. In fact, you might find yourself having to revise the goals you originally set out with as your circumstances change. Even so, good planning right from the start will mean you can keep on making progress even when things are stacked against you. Whatever your goals turn out to be, knowing up-front what you’re trying to accomplish will make every decision you take a long the way easier. Before you know it, you could well find those original goals were a little too cautious. That’s when you know it’s time to start thinking bigger...

  • Financial goals: long-term vs short-term

    It’s tough to make big plans for the future when you’re only just getting by right now. Not every financial goal you set for yourself has to be some grand scheme that might take decades to pay off. For instance, getting the earliest possible start on setting up your retirement is definitely a smart idea. However, you’ll probably need to work your way through a bunch of simpler, more immediate goals to get there.

    Your short-term goals are mostly going to revolve around the simple necessities of getting safely through to the end of the month. This basically falls into the category of day-to-day household budgeting – which you can read more about in several of our other guides, like these:

    There’s a lot more to short-term financial planning than watching your everyday spending, though. Your near-future goals could easily include larger targets, like saving up a deposit for a home or buying a car. When we talk about long-term plans, we’re including things like clearing your mortgage, shoring up your retirement funds and raising kids. These are projects that will probably take many years or decades to complete, but unless you set yourself some eventual goals to hit and plans you can stick to, it’ll be difficult to make any serious progress toward them.

    The main point of dividing your plans up into the short and long terms is to help you stay realistic about what it’s going to take to get you there. It’s all too easy to give up way too soon on a target, simply because it seems like such a huge mountain to climb. However, just making a little regular progress toward the summit is all it takes to succeed if you’re realistic about the pace you can keep up over the long haul.

  • Use the help that's out there

    LISAs aren’t the only government system set up to help first-time buyers. For instance, the First Homes scheme (only available in England) can offer what are basically discounts of 30%-50% on the market value of your first home. There are a few limits on who qualifies for this, of course. You have to be 18 or over, a first-time buyer and your total household income can’t be more than £80,000 (or £90,000 in London). There are a few other twists and turns in the rules, and some councils prioritise certain types of buyer over others, but it’s definitely worth looking into if you think you might qualify. You can find all the basics on the gov.uk site.

    Another smart option if you’re having trouble putting the cash you need together is to opt for a shared ownership arrangement. This is another scheme built to help first-time buyers grab that all-important first rung on the property ladder. Essentially, what you’re doing is buying a share (10%-75% of the total value) of a property from its landlord. A lot of the time, this will be a council or housing association. You then pay monthly rent at a reduced rate. You’ll still need to arrange a mortgage to buy that initial chunk of your new home, but it should be a lot more affordable than buying it outright from the start. As time goes by, you can gradually increase your share of the property until you own the whole place.

  • Rent and Mortgage Payments

    When you think of the main costs of buying your first place, your monthly rent and mortgage payments are probably the main things on your mind. There are a lot of other costs to consider, obviously, but we'll tackle these first.

    Average rents charged in the UK are sharply on the rise. As of June 2022, for example, a standard rental agreement would run you £1,113 per month. Just 12 months before that, though, your rent would've been over £100 cheaper at £1,007. Obviously, the averages here won't give you the full picture on their own. A lot depends on the type of property you're talking about, for one thing. Also, rental rates can vary pretty widely across different regions in the UK. If you're renting in the Greater London area, for instance, you're probably going to get hit with much higher monthly payments. The average there is closer to £1,846 a month. Compare that to the North East, where the figures are typically much lower, and you'll see average monthly rent drop right down to £588.

  • Utilities

    Recovery from the economic chaos of the COVID-19 pandemic, along with a number of other global issues, has thrown a glaring spotlight on utility bills in the UK. There's basically been a huge shockwave echoing through the energy market, knocking great lumps out of family finances up and down the country. As of June 2022, average UK households were blazing through £1,971 per year for their gas and electricity bills, with price cap revisions by Ofgem threatening to send them skyrocketing even higher. That figure was already 54% higher than before the price hike, driving a shocking number of energy customers to decide between heating their homes and feeding their families.

    There's a lot of ground to cover when you start looking into energy costs, so take a look at our other guide, "6 Easy Ways to Save on Gas and electric Bills" for more.

    Guide: Save on gas & electric bills

  • Council Tax

    Council Tax is an example of a really high-priority cost that you absolutely can't afford to let slip. Your local council has a whole range of ways to make your life uncomfortable if you don't pay up. Depending on how deep in debt you end up, that could mean getting a knock from the Bailiffs, having deductions taken automatically from your earnings or even bankruptcy or criminal prosecution if the trouble drags on long enough.

    Council Tax works by charging you a rate loosely based on the value of your home (or at least its value back in either 1991 or 2003, depending on where in the UK you live). Council Tax bands are rated from A to H, with A being for the least expensive properties and H for the most. Here's what the bands look like in England for 2022:

    Council Tax Band

    Property Value

    A

    £40,000 or less

    B

    £40,000-£52,000

    C

    £52,000-£68,000

    D

    £68,000-£88,000

    E

    £88,000-£120,000

    F

    £120,000-£160,000

    G

    £160,000-£320,000

    H

    More than £320,000


    Whichever band your property ends up in (and keep in mind you can kick up a fuss if you think you're stuck in the wrong one), your overall Council Tax bill gets cut into 10 monthly chunks, which you pay off from April to January with a 2-month holiday from February to March.

    For more on Council Tax, including advice on bringing down what you owe and coping with debt, see our guide:

    Help with council tax debt

  • Broadband and phone

    Now, with most of the big stuff out of the way, we're getting into the gritty details. You're going to need to get your new home hooked up to the internet, with a decent phone service (although it's getting less unusual for households to ditch the landline entirely, since they're paying for mobile access anyway).

    Average broadband costs can vary a lot, depending the package and extras you pick. A basic ADSL set-up, for example, will probably run you around £28.33 per month, with your home phone service coming as part of the deal. If you need a faster connection, you could be looking at closer to £39.75 for a superfast fibre connection (again, with your phone line rolled in), or even up to £61.90 per month for the fastest services with landlines included.

    Guide: How to use price comparison sites

  • Service Charges

    Service charges are fees you stump up to your landlord when you're renting your home. They're supposed to cover all the basic services your landlord has to provide, which should be spelled out in your lease. The amount you actually end up paying could vary from year to year, since your landlord's costs will probably change over time. Service charges are typically divided up between the leaseholders, so make sure anyone you're sharing the rent with understands what their chunk of the overall bill is.

  • ...And the rest

    So that's a broad overview of the basic costs you need to keep in mind when you're preparing to move into your first place. It's a pretty huge topic to cover, and we've only scratched the surface of some of it. For more information, you should definitely take a look at our guides, "The Hidden Costs of Buying a House" and "How to Save for a House in 5 Years". There, you'll find tips on tackling everything from Lifetime ISAs and deposits to Stamp Duty and removal costs.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Fixed-rate cash ISAs

    If you’re not going to need access to your savings cash for a while, you might consider opting for a fixed-rate cash ISA. These accounts pay out a pre-determined rate of interest over an agreed term. The interest you’re offered will probably be higher than you’d get with something like an easy access ISA, but you’ve still got to consider whether inflation will mean you’re actually losing money overall.

    Opening a fixed rate cash ISA is pretty simple. You load it up with money up to a set limit, with your interest coming in either at the end of the fixed term or on a yearly or monthly schedule. The actual interest rate you get with one of these ISAs can vary according to the length of time you’re happy to lock away your cash. Typically, longer terms offer better rates, but the differences can be pretty minor.

    Obviously enough, putting your savings into a fixed term ISA means it’s a lot less easy to get hold of it in a hurry. If you take your cash out before the term’s up you can find yourself hit with penalties. Also, since your interest rate is fixed when you open the ISA, you won’t see the benefit if rates go up more generally. Even if you rate’s decent, as we mentioned earlier, if it’s outpaced by the rate of inflation you’re going to find your savings dropping in real-world value. When inflation’s high, even the top interest-paying ISAs are going to struggle to keep up with the rising cost of living.

    So overall, fixed rate cash ISAs are a pretty stable choice if you’re not ready to risk your money on a stocks & shares one. When the financial climate’s in your favour, they pay out reasonably well. On the other hand, when interest rates are low and inflation’s high, they really don’t stack up against other options.

  • Know when to flip the switch - and when not to

    Switching your energy supplier is often called out as a smart way to bring your bills down – and there’s a good reason for that. Sticking blindly with the same company without shopping around for better deals is a short-cut to overpaying for your energy. For one thing, if you’re on a limited-term fixed tariff and that term runs out, you could easily find yourself shunted into a much more expensive variable rate automatically. That’s a trap loads of people fall into without ever realising.

    Shopping around’s a good idea before making any big decision. When you open a new bank account, for instance, you could grab all kinds of bonuses for signing up, from cashback to special savings rates. With your gas and electricity suppliers, though, it’s worth understanding the way the system works before making your mind up.

    When Ofgem, the UK’s energy regulator, bumped up the maximum rate companies could charge you, suppliers basically fell over themselves to raise their rates as much as they legally could. This meant that, for people whose fixed rates were expiring, Ofgem’s price cap was the cheapest rate they could shift onto wherever they looked. Overall, average UK households found themselves looking at bills of £1,277 per year (or £1,309 for those on pre-payment deals).

    So by all means, hunt around to see what deals are on offer. Just keep in mind that locking in a fixed rate doesn’t always do as much as you’d hope to save cash when energy prices start soaring across the board. You’ve got to make some changes of your own to make the most of your money – and that starts with understanding how much energy you’re actually using...

  • Stick to cash for your monthly ''fun funds''

    Okay, stick with us because this one sounds a bit odd at first. Take your spare cash and stick it in an envelope each month. We overspend so often because it’s being made too easy for us. Ditch the digital purchases and go cash-only for anything outside your essential outgoings.

    We can easily get detached from what we’re actually spending when we use cards. Now, instead of waving your plastic at a machine every time you go to the pub or cinema, you pull cash directly from your envelope. This guarantees you stay inside the limits you’ve set for buying non-essentials.

    Having an actual running total of your budget in your hands is a great way to keep track of your spending and stick to your goals. As your envelope gets lighter, you know to slow down. At the same time, because you’ve specifically set it aside as fun money, you know that every pound from that envelope can be spent with a clear conscience without blowing your budget.

     

    How to work out your ''fun fund''

  • Furniture and white goods

    Even once you’ve moved all your existing stuff into your new place, you might not be finished. Maybe you’re moving into a bigger place than before, so your old furniture’s no longer fit for purpose. The previous occupant of the place, assuming there was one, probably won’t be leaving much of their own stuff behind, so remember to add in the costs of anything extra you need to buy to flesh out your new living space.

  • How quickly will I get my tax refund?

    It takes a few weeks to put together a really comprehensive tax refund claim.  As soon as you're happy to go forward, we'll send your claim to HMRC for approval.  It can take 8-10 weeks for the taxman to check your details and confirm your refund total, so the sooner you get us the information we need the sooner you'll have your money.

    The best way to speed up your RIFT Tax Refund is to get your Authorising your agent (64-8) form back to us fast.  This is the form that lets us tackle the taxman on your behalf.  Without 2 physical copies of your 64-8 document, HMRC won't even speak to us about your claim.  It's annoying, but it's all about protecting you.

    As soon as your refund's paid out, we'll either send you a cheque or pay it into your bank account if you prefer.  The choice is yours.

    Have a look at our 'How Long Does A Tax Refund Take' page for more information about how long it takes to get your tax refund done and some pointers for how to make things happen as fast as possible.

    Remember that you can claim for the last 4 tax years and you can make your claim at any time.

  • Some of my friends and colleagues would be interested in this. Should I tell them?

    Please do!

    Not only will you be doing them a big favour if you can get some cash back in their pockets but we'll pay you a £50 referral reward for anyone who does go on to claim through us.

    Until the 9th of October we'll also pay you an extra bonus of £150 if 5 people claim with us (T&Cs apply)

    If you tell them to apply now they'll get their tax refund in time for Christmas and you'll get something extra to stuff in your stocking. That could be £400 in your pocket as well as the warm glow you get from helping out your mates.

    To get started:

    • Simply enter your friend’s name and email address using our referral form, and we’ll send them a one off email to let them know you think RIFT tax refunds could help them.
    • If they get in touch and claim a refund, we’ll send you a £50 reward for your help.
    • And for every 5 you send that claim, you get an extra £150 bonus.

    Not sure which friends could claim? Find out more about who can claim tax refunds.

    There's no limit to the number of people you can refer and we pay out the rewards every week. It could be a nice little extra in your pocket, as well as the lovely warm feeling you get from knowing you helped out a mate.

    Find out more about the referral scheme.

     

  • Am I due a tax rebate?

    In HMRC's language, a tax rebate is "a refund on taxes when the tax liability is less than the taxes paid".  What it's definitely not is a prize or a dodgy way of ''cheating the system''.  When you're owed a HMRC tax refund, it's because you've already paid too much tax.

    When you're paying your own way to temporary workplaces, the odds are good that you're owed some tax back for your expenses.  ''Temporary'' here just means it's somewhere you're working for less than 24 months on the trot.  It's worth making sure you get back what you're owed, too.  You can claim a tax rebate for up to 4 years, with an average 4-year rebate with RIFT coming to £3,023.

    A lot of the time, people don't even realise how many of their day-to-day expenses qualify for tax relief.  Unless you prove to HMRC what you're owed, though, the taxman won't have the information he needs to settle up.  The tax rebate system's a little clunky in places, but RIFT's on-demand, 1-on-1 service means you'll never get lost or lose out. 

    Just answer a few simple questions and we can tell you whether the expenses you've had to pay out in the course of your work meant that you may have paid more tax than you should.

    You can also use our to tax refund calculator see how much you are due if you do make a claim.

     

  • What Are RIFT's Prices?

    Our standard charges are:

    • Tax refund if you're employed under PAYE: 36% of refund claimed including VAT (minimum fee £60 including VAT
    • CIS Tax Refund including tax return: £330 (including VAT)
    • Self-Assessment tax returns: From £114 (including VAT call us on 01233 628648 for a quote)

    Don't worry if you had a mixture of self-employed and PAYE (employed by a company) work during the period you want to claim for. We can work out if you would be due a refund and let you know what the fee would be.

    See our full list of services with prices and options.

    When we receive your refund from HMRC we take out our fee and then pay it the refund to you. There are no up front charges to pay for anything. If you are not due a refund then there is no charge.

    Before we send your claim to HMRC we sent a copy to you with a full breakdown of all the fees so you can clearly see:

    • The total refund
    • The cost of our service
    • The VAT due (VAT goes to the government, it's charged on almost all goods and services)
    • The amount you will receive

    You will need to sign and send this back to us to say you have read, understood and agreed with it, along with a declaration that all the information you have provided about your claim is true. This means you will never be charged any fees you have not agreed to.

    There are no further fees to pay, and no hidden charges.

    All aftercare is included (if you need us to call HMRC on your behalf, if you have a problem you would like us to resolve with them, if your tax code needs correcting etc).

    Your refund is covered by the unique RIFT Guarantee which means that whatever happens, your refund stays in your own pocket and will never go back to HMRC. If we fight any HMRC enquiries for you (which is included free of charge) and if they did demand any money back, we would pay back the refund to HMRC ourselves.

    We will also send you a reminder when it's time to see if you have a claim next year.

  • What if I haven’t got my P60’s?

    If you don't have a P60 we you can use your last payslip or income statement. We can also get copies of the P60 directly from HMRC.

    Visit our checklist for details of the documents you need and what to do if you are missing anything.

  • What are your opening hours?

    You can reach us on the phone or Livechat   

    • Mon-Thurs: 8:30am – 8:30pm
    • Fri: 8.30am – 6:00pm
    • Sat: 9:00 – 1:00pm

    You can email us or send us a question or feedback through our contact page at any time and you can leave us a private message through our Facebook page.

  • What's the Difference Between a Tax Return and Tax Refund?

    A tax return is a form you use to tell HMRC about your earnings and expenses. It's a complete overview of the taxable income you've made and the costs of doing business you've faced.

    A tax refund is money HMRC gives back when you've paid too much tax. There are several reasons why you might overpay, and you often have to file a claim and prove you did.

  • What Happens If I Don’t Get My Self Assessment In On Time?

    There’s basically no acceptable excuse for missing self assessment tax return deadlines, even if you don't owe HMRC anything. If you miss the deadline there are a number of self assessment tax return penalties that you could be hit with:

    • £100 automatic fine for filing even a single day late,
    • £900 in penalties can stack up over the next three months
    • £3,000 for each year you can’t provide the necessary records

    We’re here to take care of everything - from completing your tax return, through calculating any refunds due, to speaking to HMRC on your behalf. You can also get more self assessment tax return tips and advice here with some clear ''dos'' and ''dont's''.

    Find out more about self assessment deadlines and penalties.

  • Get a Lifetime ISA

    If you’re in the right age group for it, the Lifetime ISA scheme could be a very smart option when you’re looking to scramble together a house deposit.

    Top things to know:

    1. Lifetime ISAs are for people between the ages of 18 and 40 and either buying a home or setting up savings for later in life.
    2. You can pay up to £4,000 a year into your Lifetime ISA until you hit 50 years old. Your first pay-in needs to be by the time you’re 40, though.
    3. Whatever you pay in, the government tops it up by another 25%, up to £1,000 in top-ups per year.
    4. When you turn 50, you can’t pay anything more into a Lifetime ISA.

    Keep in mind that the £4,000 yearly limit is part of your normal ISA limit. No matter how many ISAs you have, you can’t pay in more than £20,000 (as of the 2021/22 tax year) across all of them.

    As for how you can use the money in your Lifetime ISA, the rules are:

    1. You can take the cash out to buy your first home, as long as it’s worth £450,000 or less. You can’t do this until at least 12 months after you first paid into the ISA. You also need to be using a conveyancer or solicitor for the purchase, and to be getting a mortgage.
    2. You can also take money out if you’re over 60 years old or have less than 12 months to live. If you take cash out for any other reason (known as “unauthorised withdrawals”), you’ll lose 25% of it.
    3. If you’ve got one of the old-style Help to Buy ISA, you can’t use cash from both that and a Lifetime ISA to buy your home. You can still transfer cash between them, though. Just make sure you don’t go over the £4,000 yearly limit when you do it.
  • Get smart with your meter

    Smart meters are pretty common these days, and they’re actually really useful. That little monitor sitting on your windowsill is constantly talking to your meters to track all the energy (and cash) you’re burning through and reporting it back to you. That’s incredibly handy information to have on tap when you’re trying to cut down on waste.

    For one thing, that constant reminder of what your energy’s costing you is just the boot up the proverbials that most of us need to do simple, easily forgotten things like switch off unneeded lights.

    It gets better. Getting a smart meter fitted can actually unlock better rates and plans from your energy suppliers. Getting detailed, more-or-less real time information on your energy use allows companies to customise your deal to offer cheaper rates at different times of day, like “off peak” periods when there’s less overall demand. With less “pressure” on the grid, it gets cheaper for businesses to supply your energy. That means they can “reward” you for using energy in those cheaper periods with a break on your rate. Armed with that information, you can then plan out your energy use to make the most of the cheaper times – like running your washing machine overnight, for instance.

    In fact, smart meters are such a win/win proposition for you and your supplier that most companies will install one in your home for free! If you’re renting, you don’t technically even need permission from your landlord to get one, as long as the bills are in your name and you’re paying them yourself. That said, it’s probably still a good move to talk it over with them first, if only for the sake of a quiet life.

    Naturally, what you stand to save by taking control of your energy use depends very much on what you do with the information. Smartening up your meter could easily mean you save an average of over £21 a year off your bills, though.

    Do smart meters really save you money?

  • Getting the right deal for you

    The clue to understanding price comparison sites really is in the name. If you’re on the site, the chances are you’re looking for a good deal on cost. For a lot of people, that’s all they need to know to make a decision – which can actually cause a couple of problems. If you judge a deal purely by how much money it costs, there’s a strong possibility you’re going to walk away with a product that doesn’t offer everything you need. According to a 2016 report from the Financial Conduct Authority (FCA), there’s serious concern about the number of people ending up with insurance that simply doesn’t give them the coverage they think it does. A good deal doesn’t start and end with its price tag. You’ve got to be absolutely sure of what you’re getting for your cash – particularly with insurance, where you usually only realise you don’t have good cover when you try to make a claim.

    Consumer group Which? also spoke up about its worries over people not getting what they thought they were paying for. They talked about a “picture of inconsistencies and a lack of real choice that could be leaving consumers at risk of purchasing policies that simply don’t meet their needs”. In fact, 6 out of 10 of the offers they checked from GoCompare, Comparethemarket, Confused and Moneysupermarket didn’t even match what people actually got when they bought them. Some made false promises of perks like courtesy cars, while others only really offered half the cover limit they claimed!

    Here’s another thing people often don’t realise about price comparison sites: they don’t actually all show the same prices. A comparison site is a lot like a marketplace. Suppliers are laying out their stalls with their various offerings, but they’re not necessarily charging the same price at every market they set up in. Furthermore, while some businesses do have agreements with comparison sites that say they won’t offer their products or services cheaper on a rival site, this actually works against the whole idea of competition.

    Despite the cautions and drawbacks, a price comparison website can still be a great time and money saver – providing you’re prepared to sign up to several and compare them against one another. It sounds strange to have to compare the comparison sites themselves, but it’s still basically the only way to know if you’re getting the best deal you can. Yes, it’s super-convenient to have all the deals listed in one place – but if that’s the only place you’re checking then you’re really not getting the full picture of what’s out there. In fact, some firms—including heavyweights like Direct Line—actually pride themselves on the fact that they don’t appear on price comparison sites.

    15 things you can do in the next half hour to save some cash

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Getting invested

    Whatever kinds of investments you’re looking into, it’s going to pay to keep a few basic principles in mind. Firstly, don’t gamble with money you can’t afford to lose. Even “safe” investments can wind up losing you money in real terms if the returns are swallowed up by inflation. Remember the “50/30/20” rule of budgeting, where 50% of your income gets put toward essentials, 30% to non-essentials and the remaining 20% to savings and investments.

    Lastly, know where to get good advice. Depending on your situation, that might mean talking to a specialist adviser, or using an index fund to manage your portfolio professionally. Don’t dive into decisions based on hunches or blind punts, and keep your expectations realistic. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Getting it wrong: Self-Assessment penalties

    The Self Assessment system comes with a range of fines and penalties that start to kick in the moment you miss a deadline or don’t stick to the rules. For example, if you miss the main deadline of the 31st of January for filing your tax return and paying up what you owe, you’ll be hit with an automatic £100 fine. If you keep HMRC waiting after that, things just keep getting worse:

    • Missing the filing/payment deadline on the 31st of January: £100.
    • Leaving it for another 3 months: £10 per day, up to £900.
    • Still haven't done it after 6 months: £300 or 5% of what you owe (whichever's worse).
    • A year past the deadline without sorting it out: another £300 or 5% of the tax owed.

    Even if you get your Self Assessment paperwork in on time, things can still get bad if your numbers don’t add up. Making a mistake in a tax return can be painful when the taxman catches on. Deliberately lying in a Self Assessment form is even worse. If you’ve just made an honest mistake, there’s a chance you’ll be able to fix the problem before the penalties start rolling in. You have to do it within 12 months of the deadline, though. If you do your taxes online, this can be as simple as logging in and correcting the error. If you file on paper, though, it can get a little more complicated. You've got to download another copy of the Self Assessment form and send in the pages you've changed. The main thing is to be honest and up-front as soon as you realise there’s a problem in your paperwork. If the taxman thinks you’ve deliberately understated your income, over-claimed for business expenses or even just been careless with your bookkeeping, things can get bad very quickly.

    That said, HMRC does understand that life can sometimes get in the way of your Self Assessment homework. If you’ve got a reasonable excuse for missing a deadline or giving incorrect information, for instance, you might be able to limit or avoid the damage. What’s a reasonable excuse in the taxman’s eyes? Well, it’s a short list, but here are a few examples:

    • HMRC itself made a mistake and either gave you bad advice or never even told you that you were supposed to file Self Assessment tax returns.
    • You were hit by serious illness or other critical personal circumstances.
    • A technical error you had no control over or knowledge about messed up your filing.
    • Your tax return got tangled up in postal delays or bank errors.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • To paint the best picture of your finances, you'll need

    • Payslips
    • Bank statements
    • Credit card bills
    • Household bills
    • (And) Savings and pension contributions
  • Getting SMART with your financial goals

    So let’s look at some actual specifics here. Making a financial plan, whether for the short or long term, is all about being properly organised. What does that mean in practice? Let’s break it down into easy steps with the SMART system:

    • Your goal has to be Specific.
      There’s no point setting yourself some vague, non-committal target that won’t even let you realise when you’ve achieved it. Having non-specific financial goals is like walking into a travel agent and asking for a ticket to “abroad”. Get serious about what you’re trying to accomplish, and put an actual number on it. Depending on your situation, your goal might be a one-off (like putting a deposit together) or ongoing (like saving a specific proportion of your income each month). Either way, you should be able to tell exactly when you’ve hit it.
    • Your progress has to be
      This step should be pretty easy once you’ve set your actual goal. All you really have to do here is track the steps you’ve taken toward it. Again, your specific circumstances will determine the kind of progress we’re talking about. If you’re saving toward a defined target, you need to keep track of how much you’re putting away and how often you’re doing it. If you’re paying down a loan, you have to weigh the payments you’re making against the interest you’re racking up.
    • Your goal has to be Achievable.
      A bit of an obvious one, perhaps, but definitely worth spelling out. For the most part, this step is about planning out the concrete steps you’ll be taking to hit your overall goal. For example, are you following the 50/30/20 rule of budgeting when your money comes in each month? Are you setting up automatic transfers to a savings account and keeping that cash “ring fenced” for your target? This is where your planning gets put into action for real.
    • Your target has to be Realistic.
      Nothing kills a financial plan faster or more reliably than picking a fight you’ll never be able to win. A serious plan can certainly be challenging, but letting your everyday debts mount up so you can keep saving won’t take you a single step closer to success. In most cases, the best plan is to pay down what you owe before you even think about saving toward a future goal. The interest on what you owe will almost always stack up faster, which will leave you worse off over time.
    • Your goal needs to have a Timeline.
      As the old saying goes, “a goal is a dream with a deadline”. This step ties in closely with setting yourself specific goals with measurable progress. Again, though, it’s important to be realistic about what you can manage. Setting out to pay off a loan or credit card balance within a year is a great target. Trying to do it all by next month might be a little too ambitious. In some cases you might consider breaking your overall goal into smaller milestones, all taking you in the same direction. If your main goal is to save a house deposit, for example, look at the steps it’ll take to get you there. They might start with paying off an expensive, high-interest debt to plug a leak in your finances. Set a timeline for that first, then see how much more you can accomplish each month when you’re not dragging those repayments along with you.

    Download our FREE budget planner

  • Starting your planning early

    When you’re setting financial goals and making plans to accomplish them, there really is no such thing as starting too early. For example, how much easier would your targets be to hit if you claimed your yearly tax refunds as part of your preparation? Depending on your work costs and travel, you could be looking at a decent chunk of cash going to waste on the taxman’s desk each year if you don’t claim it. You can make your claim from the time the tax year ticks over, so make sure you’ve got your receipts and other paperwork prepared in advance. Your refund could pay off nagging bills or help wipe out expensive debts, clearing your way to put your financial plan into action. If your debts are already under control, then your refund is a serious leg-up on our overall progress.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Family-owned business

    Family-run businesses, as you might expect, are some of the most common types of smaller company. If you're looking to partner up with people you know and trust, where better to start the search than your own home, right? In fact, as of the statistics for 2020, over 3 in 4 small and medium-sized enterprises (SMEs) were family-owned. The larger the business, the lower that number goes, with 4 in 5 micro-businesses (firms with fewer than 10 employees) and 2 in 3 small businesses being owned by families. By the time you get to medium-sized companies, though, that figure's dropped to just under 6 in 10.

    So, what kind of businesses are we talking about here? Well, it turns out there's quite a variety of them. About the most popular place to find family businesses is in the building trade. Coming a close second is the so-called "primary sector". This really just means firms that deal with basic raw materials like mining, but also includes farms and fishing operations. Next in line we have retail and wholesale businesses, followed by administration firms.

  • Doing business with friends

    Going into business for yourself is something a lot of people in the UK dream of. Again, using surveys from 2020 as a guide, we see that a massive 64% of UK workers had thought seriously about setting up their own businesses. If you narrow it down to the younger crowd, the statistics are even more striking. An impressive 83% of 18-24 year-olds in 2020 were dreaming of going into self-employment. There are a lot of great things about being your own boss, from a real sense of independence and freedom to being able to fine-tune the way you work to suit your own life and goals. If this sounds like a dream worth chasing, the first thing to do is understand how to make and stick to a budget—so take a look at our other guide, "How to Budget if You Are Self-employed" for more.

    How to budget if you're self-employed

    Of course, going your own way doesn't have to mean going it alone, so a lot of these new small businesses get their start when families or friends decide to build something great together. With that in mind, let's talk about how to give your new business the best possible start.

  • Plan ahead

    Let's assume you already have a strong idea of who you want to go into business with. Now it's time to look into the main practicalities you'll need to tackle. Even small businesses have a lot of moving parts, which means a range of different responsibilities, job roles and levels of authority to divide up. Getting those decisions right from the very start will give you a big boost when it actually comes to running things day-to-day. The clearer it is who's supposed to be doing what, the smoother your new company's ride will be.

    While we're on the subject of dividing things up between you and your partners, let's have a quick word about ownership. This is where business gets really serious—and again, you'll want this to be crystal clear to everyone it affects from day one. Business ownership isn't something you can settle with a basic nod-and-handshake arrangement. You'll need to draw up contracts, and make sure everyone's happy with what they say. While you're at it, you'll want to set a few goalposts for your business. Give some thought to what you're hoping to achieve, and what you're planning to get out of it. Keep your targets as realistic as possible, given your available resources and experience—but don't be afraid to dream a little bigger. There's nothing wrong with shooting for the moon as long as you understand that a step-ladder won't get you all the way there on its own.

    This is where you'll really want to get talking with your partners. Make sure everyone's on the same page in terms of realistic expectations and achievable targets—or even your "exit strategy" if your circumstances change or things don't quite work out the way you wanted. You've got to be open and up-front with your business partners, even though it can be tough to keep your home and work lives completely separate when you share a dining table with your company’s MD. If the time ever comes for you to step back from your end of the business, leaving your "succession planning" too late can mean you don’t have time to get it done properly. That can seriously mess with your business and force you to make key decisions in a rush. Suppose the person you’ve picked out to take up the reins has other plans, for instance, or simply isn’t up to the job. Do you have a back-up plan? If so, how do they feel about being your second choice?

    For another thing, people's personal situations can change unexpectedly. It needn’t even be as dramatic as a divorce or death in the family, either – although those can certainly happen. If you’re considering passing on your business to relatives once you step away from it, you’ve actually got more considerations than other kinds of company. On the one hand, it’s important to do what’s best for the business itself, passing control to the people with the most interest and aptitude for it. On the other, you’ve got to weigh up the more personal consequences of your choice. In some cases, you might even find yourself with no good moves to make at all – at which point it could be worth looking into other candidates outside the family, or even selling the business outright.

  • Shareholders' agreement

    So, with a heaving pile of circumstances, obstacles and egos to contend with, how do you go about keeping order in your business? There's never going to be a one-size-fits-all solution for every situation or firm, but the strongest place to start is with a well made shareholders' agreement. Not only will this protect your business, your partners and you, it'll also cut down on a lot of the general awkwardness that can come when friends and families work together. It's like a business-themed take on the pre-nuptial agreement, spelling out what everyone's agreed to in advance to avoid uncertainty and unpleasantness later. If you and your firm's partners decide to break up somewhere down the line, everyone's clear on what the rules are. For example:

    • The rights and obligations of every partner are clearly listed out.
    • Any rules about selling company shares are explained and agreed.
    • The procedures for running the business and making key decisions are set out.
    • The rights and investments of minor shareholders are protected
  • With all the fiddly legalities neatly ironed out, you can move ahead with the exciting part—actually setting up your business. You're in good company, too. As of 2020, the UK boasted over 2 million limited companies (a business set-up that protects your personal cash and property if the sky falls in) actively trading, with about half of those being one-person operations.

    When you need to kick off a business partnership, your main port of call will be the government's own website. That's where you'll be asked about the kind of set-up you're aiming for. One option is a limited partnership, which means you've got at least one general partner and one limited partner. With a limited liability partnership, on the other hand, there aren't any general partners. Confused yet? A general partner is someone who owns and controls a business, but also stand to lose some personal cash if the business goes bad. Limited partners tend to have fewer responsibilities and less overall authority, but their personal money's more protected. By the time you hit the set-up page on the government website, you and your partners need to have already agreed these key details so everyone knows exactly where they stand.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Gold

    Yes, it’s possible to invest in gold, even without the resources of a James Bond villain or a greedy dragon. Is it actually worth it, though? It turns out the answer depends very much on what you’re hoping to achieve - and how long you keep your money invested.

    Over the really long term - and we’re talking about the last 30 years or so here – gold investments don’t really have any kind of edge over putting your cash into the stock market. In the shorter term of around 15 years, though, gold has outperformed stocks and shares investments pretty convincingly. Here are a few numbers to chew over:

    • From 1990 to 2020, the Dow Jones Industrial Average (DJIA) rose by 991%. Gold prices trailed way behind at only 360%.
    • Narrowing our focus down to the 15 years from 2005 to 2020, though, we see the DJIA only rising by 153%, while gold is still up by 330%.

    The DJIA is considered to be a pretty decent snapshot of the entire US economy, making it one of the most well known stock market indexes. When times are tough and the markets are volatile, gold often becomes a much more attractive investment option. It just doesn’t “twitch” up and down in value with general market prices. 2020’s a good example of this. Gold prices flew up to record levels in July that year, while stock market values plummeted. The same thing happened in 2008 when the financial crisis happened. The down-side to that stability, though, is that when the markets are going strong, the price of gold can often level out while other investments shoot up.

    Another thing to realise about gold is that it isn’t going to give you a regular income the way other types of investing can. The value of your gold investment is determined entirely by the price of gold itself. Assuming you’re buying actual gold rather than investing in gold-related businesses, you’re also going to be looking at storage and insurance costs. You can read more about this in our article, “An Intro to Gold Investing for Beginners”.

    So, gold can be a decent back-up plan to keep your money’s value when other investments turn out to be less reliable. It’s more about ensuring you don’t lose cash than making you more of it, though.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • What's the big deal?

    We’ve all grown up in a world that respects and values gold. It’s a respect that dates back many thousands of years, and shapes how the metal’s viewed today by investors, businesses and virtually everyone else. As far back as 4,000BC, gold was being used in Eastern European cultures to make decorative objects, and across millennia its primary use was in jewellery and objects of religious worship. Despite this, it really wasn’t until around 1,500BC that gold first became a kind of global “money”. Egypt, whose Nubia region was rich in gold, made it an official standard of value and the first international medium of exchange.

    Skim forward a couple of centuries and we find a kingdom in Asia Minor called Lydia, where the first gold coins were minted. By 50BC, the Romans had started using a gold coin they called the Aureus (literally, “golden”). Eventually, gold coins started changing hands all over the world. The Republic of Florence, in what today would be Italy, had the Ducat, while Great Britain had its Florin. The Ducat, in fact, ended up being the world’s top gold currency for another 5 centuries!

    So, why’s the world still so excited about gold? After all, it’s too soft and too scarce to build anything useful out of, isn’t it? Even the gold used in jewellery often needs to be blended with other metals to give it strength. In fact, some people reckon we really shouldn’t be using it as a measure of value at all anymore.

    To be fair, gold goes have some interesting properties. It’s non-toxic and never rusts and that softness we talked about makes it easy to work with. It’s even great for electronics, since it conducts electricity so well. If you want to get into the deep science of it, it’s ideal for nanotechnology, resists bacteria and can even be used in the fight against cancer! In real terms, though, the simple truth is that gold is beautiful, ageless and really rare - and eventually enough people decided that these factors made it important and valuable.

  • How does it stack against other investments?

    When you’re comparing one kind of investment with another, everything depends on the time frame you’re considering. Over the last 15 years or so, gold’s been a pretty solid investment compared to stocks and shares. If you stretch that out to 30 years, though, things swing back in the other direction. In the last 3 decades, the price of gold has risen by about 360%. Compare that to the 991% rise in the Dow Jones Industrial Average over that time and it doesn’t look too great.

    For reference, the Dow Jones Industrial Average tracks the stock prices of 30 big US firms. It’s among the most well known and respected stock market indices, making it the place to look for a snapshot of the American economy.
    Looking back at our comparison, the picture changes quite a lot of we narrow down the time frame a bit. Looking just at the period from 2005 to 2020, gold has shot up 330% in value – not too different from the 30-year increase. Over that same 15 years, though, the DJIA only rose by 153%.

    As for what this all means, it’s a question of stability. Gold typically doesn’t twitch up and down in value alongside general market prices. If you’re looking for a relatively safe investment, that’s a good thing to see. It’s one of the reasons why gold tends to go up in value when the economy’s on shaky ground. Investors know to look for stable places to put their money. 2020’s actually a good example of this. Gold prices flew up to record levels in July that year, while stock market values plummeted. The same thing happened in 2008 when the financial crisis happened. The down-side to all that stability, of course, is that gold investment tends not to take full advantage of economic growth periods. The price can often sit steady while other investments see sharp rises.

    The other thing to understand about gold is that your investment probably won’t bring in an income on its own. There won’t be any dividend payments like you can get from shares, or interest like you’d bet with a bond. Instead, the return on your investment is going to hang entirely on how the price of gold shifts. If you’re buying actual, physical gold, you’re also going to have to pay to insure it and store it somewhere secure.

    All told, gold is the kind of thing you invest in to keep your money safe, rather than to make massive returns on it. That’s why it’s often seen as an excellent “backup plan” in case your more volatile investments turn out disappointing.

  • How to invest in gold

    As we’ve hinted at already, you’ve got a few options when it comes to investing in gold. First, and most obvious, is actual gold itself. That could mean bullion, coins, jewellery or anything else made from the stuff. You’re going to need quite a lot of cash to get started this way, and you’ll need to protect yourself from getting ripped off. That’ll mean using reputable dealers, brokers and banks, all of whom will be able to provide proof of authenticity. If you’re buying coins, keep in mind that it’s not just the raw weight of the gold that you’re buying. The dates, designs and condition of the coins matter too, and it might be worth talking to an expert to get good advice. A good dealer may even be able to store your gold for you, which can simplify things like insurance and protection. You’ll still need to pay for the service, though.

    You can also get gold bullion through the Royal Mint, either taking the delivery yourself or having the Mint store it for you. Again, there’s a fee for using their storage system (known as the Vault), which will typically come to 1% of your gold’s value per year, plus VAT. Investing through the Royal Mint means you never have to worry about your gold’s authenticity, but it’s a pretty expensive way to do it.

    Moving away from physical gold, you could look into Exchange-Traded Commodities (ETCs). These are a lot like the ETFs (Exchange-Traded Funds) we talk about in our article, “7 Investment Methods When You’re Just Starting Out”, only for commodities. They track the price of gold, with the calculations based either on stores held in a vault or, slightly riskier, on buying gold-related products. Your money’s generally kept in a Stocks & Shares ISA, and your ETC can be traded on investment platforms. It’s a cheaper system than buying physical gold, and comes with none of the associated storage costs and other hassles. You’ll still have to pay for the trading platform you use, though.

    Lastly, you can put your investment cash into businesses that actually work in the gold industry, whether that means mining, refining or distributing it. This can actually work out more profitably than buying gold itself, since you’ll be investing in companies that will pay dividends on your shares. You’re sacrificing some of that famous gold stability, though, so the risks are higher. The value of your investment won’t just be based on the overall price of gold. There’ll also be the profitability of the business you’ve bought into to factor in, so you’ll need to be aware of things like the demand for the company’s products, the kinds of costs they’re running up and so on. That said, even a fairly small rise in the price of gold can lead to much higher returns on some gold stocks than if you just owned the gold itself.

    So there you have it – a beginner’s guide to investing in gold without ever having to plunder a dragon horde or shake down a leprechaun. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • What are premium bonds?

    National Savings and Investments Premium Bonds are basically a type of savings account. Like most other savings accounts, you can pay in and withdraw cash more or less whenever you want or need to (although it can take a little time to process a withdrawal – see below), with interest being paid on the amount you’ve saved. However, Premium Bonds pay out their interest in a very different way, through regular monthly prize draws. That’s right – you actually have to win your interest!

    Here’s how it works. Every £1 Premium Bond has an equal chance of winning in any given draw. Naturally, that means the more Bonds you buy the better the chances of one of them being picked as a winner. To keep things interesting, NS&I has a machine it calls “Ernie” (standing for Electronic Random Number Indicator Equipment), which it uses to pick the winning Bonds. You can buy Premium Bonds with a minimum one-off purchase worth £25, or set up a monthly standing order to keep buying more to a maximum total of £50,000 of investment. You have to be over 16 to buy Premium Bonds, but it’s possible for someone else to buy them for people who are younger. In that case, the parent or guardian of the child will hold onto the Bonds until the child turns 16.

    Once you’ve held a Premium Bond for at least a full month, you’re eligible to start winning the draws. So, for instance, if you buy yours in the middle of January they’ll be officially entered into the March draw. While we’re talking about timing, if you’re thinking of moving some cash out of your savings and into Premium Bonds then it’s best to consider when your interest is paid out. For instance, if you transfer the money in the final week of the month, you’ll minimise the amount of time it’ll be stuck no longer earning interest but not yet eligible to win a Premium Bond draw.

    One exception to the month-long delay is if you reinvest any money your Premium Bonds win back into the scheme. Those winnings will be eligible to win another draw from the next month onward. So, if you won £25 in January and reinvested it, that £25 of Premium bonds would be entered into the February draw.

    Premium Bonds stay entered in the monthly draws until you cash them in. Again, you can set the wheel in motion to withdraw your money at any time, but it can take as long as 8 days to actually get your hands on it.

  • Premium bonds and tax

    Technically speaking, the interest you stand to win on your Premium Bonds is completely tax-free. That sounds great, of course, but in practice it won’t make any difference to most people. In 2016, a new Personal Savings Allowance (PSA) rule came in, meaning that basic-rate (20%) taxpayers can earn up to £1,000 per year in interest without paying any tax on it. People paying the higher rate (40%) have that allowance cut in half, while people on the top 45% rate get no allowance at all.

    In real terms, what this means is that virtually everyone pays no tax on their savings interest, including any Premium Bond wins. As a result, there’s no real tax advantage to the scheme now. However, if you ever did end up winning enough to put your total interest over the £1,000 limit, your Premium Bonds interest wouldn’t count against your Personal Savings Allowance – making it almost an extra allowance in itself.

    Of course, for that to matter you’d have to win something in the first place – so let’s look at the odds of that next.

  • Premium bonds: chances of winning

    Since any interest you get on Premium Bonds comes in the form of winnings, there’s no hard-and-fast interest rate you stand to earn. That said, there is an annual prize fund rate that loosely measures the kind of return you might expect overall. As of 2021/22, that rate stands at 1%. So in general, every £100 invested in Premium Bonds might be expected to pay out £1 in interest. It’s actually a bit more complicated than that, since the lowest prize level is £25, but it gives you a rough idea of the average returns you’re looking at.

    Of course, the word “average” is doing a lot of work in that last sentence. We’re talking about a “mean” average here. In reality, for every person who wins £25 or more on a £100 investment, another 29 people get nothing at all. With a top prize of a massive £1 million, that means an awful lot of people getting absolutely no interest on their Bonds. In fact, assuming you have moderate luck with Ernie’s picks, even pumping the maximum of £50,000 into Premium Bonds would probably only score you about £450 over a year.

  • Are savings accounts better than Premium bonds?

    It’s not always easy to compare one kind of investment with another, and with Premium Bonds it’s possible to have massive wins – or nothing at all. However, if we stick to some reasonable assumptions about what you stand to win.

    The numbers shake out like this:

    • With a 1% prize fund rate, £1,000 invested in Premium Bonds will earn no interest over a year, compared to the £6.02 of interest you’d get with an easy access savings account with a 0.6% interest rate.
    • With £5,000 invested, your Premium Bonds bring in £50 in winnings, while that same savings account would pay interest of £30.08.
    • £20,000 of Premium Bonds would set you up to win £175 over the year, with the same cash in your 0.6% interest savings account earning £120.30.
    • If you instead put your money into a fixed-term savings account at 0.8% interest, £1,000 would earn you £8.02, £5,000 would bring in £40.10 and £20,000 would get you £160.40 in interest.

    Overall, then, assuming “average” luck with your winnings, Premium Bonds start to outperform basic savings accounts once you’ve got around £5,000 invested.

  • Are Premium Bonds worth buying?

    Basically, the more Premium Bonds you buy, the more likely they are to be worth it – at least compared to other kinds of savings accounts. If you’re putting away over £5,000, for example, they can work out better than normal easy-access savings. You’d need to have an impressive run of luck to match the top rates you can see with some fixed-term accounts, but you do have easier access to your money than a fixed account will allow. That makes Premium Bonds a reasonable investment if you’re looking to save for the longer term but still want the reassurance that you can get hold of your cash in a pinch.

    Similarly, if you’re already earning enough interest to pay tax on it (over £1,000 for basic rate taxpayers), then Premium Bonds will probably work out better once you’ve got a large enough chunk of change invested in them. They can even be a better option than other tax-free savings accounts like cash ISAs when the interest rates on those are low.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Working out what you'll need for retirement

    Let’s get into the real nuts and bolts of it. The first thing to do is add up everything you’re spending right now. Look through your banking apps and statements to get the full picture of what’s going out each month.

    Once you’ve done that, start knocking off any of those regular costs that won’t be a factor after you’ve retired. Depending on your situation, that may mean work travel, childcare costs, your pension contributions and any other saving you’re doing. If you’re expecting to have paid off your mortgage by retirement, remember to subtract that too.

    Next it’s time to look a little deeper at some of the costs that’ll still be sticking around once you’ve stopped working. A lot of those will probably come down, at least. With no kids in the house, for instance, your food and energy bills will probably be lower. The same applies to things like family holidays and general transport costs. Once you’ve factored all of those reduced bills into your calculations, you should have a reasonable stab at a monthly income you could live comfortably on.
  • Extra savings to bring your target down

    If you really want to make your retirement savings count, there are even more ways to bring down your basic minimum retirement pot target. Again, a lot of these advantages and opportunities stem from the fact that you’ll no longer be making decisions around the demands and costs of your job. When you’re booking holidays, for instance, you won’t be stuck jetting off during peak seasons. With time on your side, off-peak holidays could be a serious money-saver.

    If you’ve been running a car mostly for getting to and from work, you’ll already have noticed your costs going down. In fact, it might be time to think about whether you really even need your own wheels at all. A lot of families need more than one car while they’re working, so even scaling back the number of vehicles you own can mean a major boost to your budget.

    If ditching your wheels seems like too big a step to take, think about dropping any Personal Contract Purchase or lease agreements in favour of simple buying a car outright. You’ll be saving a lot on interest payments in the long run.

    The other big thing to look at is your home. If you’re no longer putting a roof over your kids’ heads, it could be a good opportunity to “downsize”. You might have a lot of money tied up in your house, so selling up and buying a smaller property can release a serious chunk of cash. In some cases, you might not even have to get somewhere smaller, assuming you’re happy to move to an area with lower property values. You can do this whether or not you’ve paid off your mortgage, of course, which could at least bring down your monthly payments. A smaller property will also generally be cheaper and easier to maintain.

    So that’s a basic run-down of the hows and whys of saving for retirement. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • What are the main Self-Assessment deadlines

    By the 31st of January, you have to file your online tax return for the previous tax year, and pay any tax you owe.  Miss this by just one day and you're already looking at a £100 fine. You should get yourself registered as self-employed as soon as possible after you start trading. The deadline for getting yourself registered is the 5th of October in the year that you started your self-employment.  Miss that, and you're risking penalties based on the potential lost tax. 

    Important Self Assessment deadlines include:

    31st of January This is the big one, you have to file your online tax return for the previous tax year and pay any tax due.  You'll also have to make the first of any payments on account you need for the following year.
    5th of April The end of the tax year.  Soon after this date, you'll be contacted by HMRC to file your Self Assessment tax return.
    31st of July If you're making payments on account, this is when the second one's due.
    31st of October If you're sending in a paper Self Assessment tax return, this is the deadline for it.

    If you miss the deadline for a good reason, you may be able to steer clear of the penalties.  HMRC will expect you to be extremely up-front and co-operative, though. You can read more about penalties for failure to notify on the HMRC website. Keep in mind that you may also need to register separately for VAT. Again, check the HMRC website for details.

    Technically, you can submit your Self Assessment tax return at any time after the end of the tax year, as long as it's filed by the 31st of January the following year. That said, it's always better to get it done sooner. For one thing, you'll know earlier how much you owe. That means you have time to plan or save up for making the payment.


    Missing the tax return deadline lands you in an automatic £100 late-filing penalty. Those fines ratchet up further after 3, 6 and 12 months. A genuine reason might stop the penalty pain, but don't count on it.

  • What fines are charged for missing tax return deadlines?

    There’s almost no acceptable excuse for missing Self Assessment tax return deadlines, even if you don't owe HMRC anything. If you do miss a deadline, interest is charged on both unpaid tax and unpaid penalties, so it's vital you don't get in a position of increasing fines just because it "slipped your mind" or you "didn't have time".

    There are very few reasons that HMRC will accept as valid for late filing or payment. If you do need to file late then it is crucial that you let them know as soon as possible to show that you’re doing your best to fix things.

    Penalties for missing the filing deadline of 31st Jan:

    • Automatic £100.
    • 3 months late: daily penalty of £10 per day up to 90 days.
    • 6 months late: 5% of tax due, or £300 if greater.
    • 12 months late: 5% or £300 if greater.

    Things only get worse if the taxman suspects you're deliberately holding back information that would let him work out the tax due.

    Penalties for late payment:

    • 30 days late: 5% of tax due.
    • 6 months late: 5% of tax outstanding at that date.
    • 12 months late: based on your behaviour.  If HMRC thinks you're deliberately hiding information, you're looking at 100% of the tax due, or £300 if greater. If they think you’ve missed the deadline deliberately without concealing information, then you can expect a penalty of 70% of the tax due, or £300 if greater. You might get a reduction in the penalty by being very up-front or volunteering information before being asked.
  • Who needs to do a tax return?

    Tax returns aren't just for the self-employed.  There are lots of reasons why you might need to file one each year. You might have additional sources of income outside of your main job, for instance, or be the director of a company. Here are a few of the main examples:

  • What information do I need to fill in a self-assessment tax return?

    When you’re filing a Self Assessment tax return, the information and documents you need will depend on your situation and business. Here are some of the basics:

    • Your personal details: name, address, UTR number, etc.
    • Details of your self-employment income and expenses: invoices, receipts, etc.
    • Your Capital Gains, if you disposed of any assets that count for the system.
    • Details of any other income you have, from things like rent, PAYE work and so on.
    • Any pension contributions or charity donations you’ve made.

    The point is to give HMRC as complete a picture of your business and finances as you can, so you only end up paying the tax you owe. The Self Assessment system can be complicated, so talk to RIFT to make sure you’re making the most of it.

  • How do I register for self-employment?

    When you start working for yourself, registering for Self Assessment is Job One. You've got to do it as soon as possible, and you'll get fined if you wait too long. The deadline for registration is the 5th of October in your business' second tax year. Don't miss it!

    The easiest way to register for Self Assessment is by doing it online.  Here's how:

    • Visit the HMRC website and create a Government Gateway account.
    • You will then receive your Unique Tax Payer Reference number (UTR).
    • You will also receive an activation code to log into your account for the first time.
    • You can then complete the registration form.

    You can also send your registration form by post, but you've still got to go online to download the form anyway.

    To register as self-employed and to get your UTR number, you'll need to have all the following information to hand:

    • Your name.
    • Your address.
    • Your National Insurance number.
    • Your date of birth.
    • A contact telephone number.
    • A contact email address.
    • The date you started as self-employed.
    • The type/nature of your business.
    • Your business address.
    • Your business telephone number.

    If you’re a self-employed subcontractor in the building trade, you’ve also got to register for the Construction Industry Scheme (CIS). When you're paid through CIS, your contractor has to chisel off a hefty chunk of your pay before you get it. That money goes straight to HMRC. It's supposed to act as "advance payment" toward the tax and National Insurance you'll owe. Your contractor doesn't have any choice about this; it's just how the law works.

  • Do I need a UTR number to be self-employed?

    A UTR (Unique Taxpayer Reference) number or tax reference is a 10-digit code that's unique to either you or your company. Your UTR number identifies you personally with HMRC for things related to tax.

    There are a number of ways of finding your UTR if you already have one. It’s 10 digits in length and is quoted on previous tax returns and other documents from HMRC, including:

    • Your "Welcome to Self Assessment" letter (SA250).
    • Your Self Assessment tax return.
    • Notice to file a tax return.
    • Statement of account.
    • Payment reminders.

    If you’ve already registered for the online services area of the HMRC website you can log in and find your UTR number there.

    When you're ready to start filing Self Assessment tax returns, you'll be applying for a UTR as part of your registration. It might take a while to get your UTR number from the taxman. Make sure you leave enough time to get it before you have to file your first return. A couple of months should be enough to be sure of it.

    You’ll need to pass a series of security checks to allow HMRC to confirm your identity. Once this has been done they’ll post your UTR number to you, which can take up to 7 days. This is the only way HMRC will send your UTR number to you, so get a move on if it’s approaching the tax return deadline!

    If you've lost your UTR number, or the above correspondence, your best option is to contact HMRC directly.  UTR numbers are unique, so make sure you keep yours safe.  A UTR could be used for identity theft if it falls into the wrong hands.

    Companies have UTRs as well as individuals. The company Unique Taxpayer Reference (UTR) will have been issued by HMRC when the company was set up and registered. It can be found on documents HMRC have issued, such as the "Notice to deliver a company tax return" (form CT603).

    Your company’s UTR will be included in the first letter you receive from HMRC at your registered office. It will be printed next to a heading like “UTR”, “Tax reference”, “Official Use” or “Reference”. HMRC will use the UTR to identify your company whenever you contact them about tax.

    Your company’s CRN (company registration number) is not the same as your company Unique Taxpayer Reference (UTR). Your company number is officially known as a Company Registration Number (CRN). It’s issued by Companies House immediately upon incorporation, is unique to your company and is displayed on your certificate of incorporation. You must provide this number whenever you contact Companies House.

    More on UTR numbers

  • What are CIS tax returns?

    Under the Construction Industry Scheme, you're essentially being taxed right from the first penny you earn, without getting your tax-free Personal Allowance. It's supposed to crack down on tax evasion in the construction industry, but in reality it's the honest subcontractors that are carrying the load.

    The news isn't all bad, though. You can claim back the extra tax you've paid in your Self Assessment tax return. That's right: even though you've already had 20% of your money taken by HMRC, you still have to file a return. If you've paid too much tax, you can get a tax refund.

    If you’re working via the Construction Industry Scheme (CIS), you’ll be required to file a Self Assessment tax return after your first year of trading and in subsequent years. You’ll complete your tax return at the end of the tax year in April and pay any taxes that are due by the following January.

    Yes, you will pay tax “at source” (your tax is taken off your wages before you get them), most likely at the rate of 20% of your income. However, this doesn’t mean you are “employed”. You still count self-employed under CIS – even if it doesn’t feel like it. The big difference is that this means you'll still have to do Self Assessment each year. Not filing those tax returns each year brings three very serious problems your way:

    • You're not getting your tax-free Personal Allowance.
    • You're not getting any of the tax relief you're entitled to for your work expenses.
    • HMRC's going to come after you for failure to file!

    When you’re a subcontractor running a Limited Company of your own, the deductions your contractors make can be used to bring down the Corporation Tax you owe. Alternatively, you might just be able to get it refunded by the taxman.
    When you’re a contractor with subbies to pay, you have to send a regular report to HMRC about all the CIS deductions you’ve taken from their earnings. You do this on a monthly schedule. It makes no difference if your subcontractors are individual people or companies themselves. It’s just another way of taking tax out of their pay, the same as you would via PAYE.

    If your company’s doing work for a contractor, and you aren’t using subbies, the contractor will handle your CIS deductions. If you’re registered for CIS, you’ll lose 20% of your pay to the taxman. If not, it’ll be 30%. You might be able to apply for gross payment status, where no CIS deductions are made. Things can get sticky there, though, so you need to know what you’re doing.

    You’ll report the amount taken out via CIS in your Employment Payment Summaries to HMRC. At the end of the tax year, there’ll be an online form to fill in on the government website. HMRC uses those figures to work out how much to knock your Corporation Tax bill down by. If you end up in credit, you’ll get a tax refund.

    If your company’s using subcontractors, but is doing work for another contractor, then your situation’s a little more complex. Your contractor will still make CIS deductions before paying you, as normal. You’ll then take CIS payments out of your subbies’ pay. The amount you end up sending to HMRC depends on which is higher – the amount the contractor took from your pay or what you’ve taken from your subcontractors’. If you end up losing more in your own CIS payments than you’re taking from your subbies’ cash, then your Corporation Tax bill comes down to settle up. If it’s the other way around, you’ll end up owing HMRC money.

    More on CIS Tax Returns

  • Self-Assessment and paying back student loans

    Payments toward student loans are handled through your normal Self Assessment paperwork. Anything you owe will be included with your main tax bill. Watch out if you're paying late; the fines will be the same as if you'd missed the tax deadline.

    If you're making payments on account (advance payments on your tax bill), your student loan payments won't be part of them. Remember that you can make voluntary payments directly to the Student Loan Company if you want to. Those won't be included on your tax return, though, and won't reduce your actual tax bill.

  • Can I file my Self-Assessment tax return online?

    Once you've registered for Self Assessment online, you can:

    • Check your account details at any time to see what tax you owe.
    • Make instant amendments to your return online.
    • Adjust your payments on account if your income changes from one year to the next.
    • Easily save an electronic copy of your return, or print a copy for your records.

    HMRC's Making Tax Digital scheme is aiming to make tax simpler for individuals and businesses in the UK.  Part of that process is the new Personal Tax Account System.

    Your Personal Tax Account gives you better access to and control over your personal information.  You'll also be able to check your tax code and state Pension and do things like track the tax forms you've submitted.

  • What documents do I need to file my Self-Assessment tax return?

    Filing a Self Assessment tax return means showing HMRC a full picture of your finances.  Here are a few of the most important documents you need to hold onto:

    • Form P45, if you stopped working for an employer during the tax year.
    • Form P60, showing what tax you've paid.
    • Form P11D, if you get any "benefits in kind" like a company car.
    • Records of any Taxed Award Schemes or redundancy payments.
    • Details of any rental income or expenses.
    • Any savings and investment statements you’ve got.
    • Full details of all your income and necessary expenses from self-employment, plus and paperwork you have to back them up.

    Other things to keep track of include extra income such as untaxed tips, incentive payments or benefits like meal vouchers. Depending on the kind of work you do, you might need to record your expenses for things like:

    • Travel to temporary workplaces (MOD bases, oil rigs, construction sites and so on).
    • Specialist tools, equipment or clothing - including laundry costs if applicable.
    • Food and accommodation expenses, if they're specifically work-related.

    Remember, it's not just the self-employed who file Self Assessment tax returns. If you're claiming a tax refund for expenses of over £2,500, you'll need to use the system too.

  • How do I pay my Self-Assessment tax bill?

    You can make your Self Assessment payments by:

    • Online or phone banking.
    • Clearing House Automated Payment System.
    • Debit card online (no personal credit cards).
    • Paying at your bank, building society or Post Office.
    • Sending a cheque.
    • BACS or Direct Debit.

     

  • What if I can't afford to pay the tax bill?

    If you can’t afford to pay the tax you owe – don’t panic! The main thing to do is to let HMRC know you’re going to have trouble paying up. Do this as soon as possible once you realise there’s a problem. In most cases, they’ll be able to help you sort out a payment plan that’ll ease the financial pressure. A “Time to Pay” arrangement, for example, can see HMRC working with you to set a personal payment schedule you can realistically handle.

  • What do I do if I make a mistake?

    A mistake in a Self Assessment tax return can be a problem, but the system makes it easy enough to fix things if you’re on your toes. Don’t wait for HMRC to spot the mistake and start asking questions before you act, though. The moment you realise there’s an error, get to work correcting it. You can make changes to your tax return within 12 months of the filing deadline (the 31st of January). After that you’ll need to write to HMRC to get any corrections made.

  • What are payments on account?

    Payments on account are payments towards your next year's income tax. The amount you have to pay for each payment on account is half of your previous year's tax bill. So, if your previous year’s tax bill was £2,500 (you only have to make payments on account if your tax bill is over £1,000), then each payment on account would be £1,250.

    This is HMRC's way of spreading out the money you'll owe in your next tax bill over the year. They can be quite a shock the first time you're asked to pay them. However, they're really just designed to make paying your tax a little less painful.
    When you file your Self Assessment tax return and your tax is calculated, HMRC assumes you'll owe about the same next time.When you settle up your tax bill in time for the normal deadline (31st of January), you also have to make your first payment on account for the following year. The amount will be half of the previous year's tax bill. Six months later, by the 31st of July, you'll have to make your second payment on account. Again, this will be for half of the previous year's total tax bill.

    If you paid a total of, say, £2,500 on account for the year, but you find that you're actually due to pay £2,700 when you come to do your tax return, you'd pay a “balancing payment” of £200 to HMRC by 31st January the following year. Your two payments on account for would each be half of £2,700 (the previous year's tax bill). On the other hand, if your payments on account mean you've paid too much tax, you’ll be due a tax refund.

    Payments on account are for self-employed people, and apply to both your income tax and class 4 National Insurance contributions. If you need to make them, you'll see the amounts and deadlines when you sign into your HMRC Self Assessment website.

  • What's a tax code?

    A tax code is a little string of letters and numbers that tells your employer how much cash to hack off your pay before forking it over to you. You can find it on a bunch of documents - and it’s worth keeping an eye on it, since it can and will change once in a while. Look out for your tax code on:

    • Your payslips, P60 or P45.
    • Your yearly PAYE Coding Notice from HMRC.
    • Your pension advice slip.

    If you spot a change in your code and don’t understand it, getting some expert advice from a professional accountant is a great idea. A good accountant can explain exactly what it all means, and sort it out for you if the taxman’s got his wires crossed. If you change your name or decide to work for yourself, for instance, you’ll need your tax code fixed so you don’t end up on the wrong side of HMRC.

    More on tax codes

  • How's my income tax worked out?

    The amount you’re coughing up to HMRC comes down to 2 basic things: how much you’re earning and what your Personal Allowance is. Your Personal Allowance is listed in your tax code. Whatever you earn up to that amount each year, the taxman can’t lay a finger on it.

    After your Personal Allowance is used up, the next chunk of your pay is taxed at the Basic rate. Once you hit the upper limit of that, anything more you earn gets hit with the Higher rate. Really big earners can find the top end of their pay being taxed at the even higher Additional rate.

    On top of your Income Tax, you’ll also find yourself coughing up National Insurance contributions (NICs). Again, your employer handles this before you get your pay. If you’re on PAYE, you’ll be paying Class 1 NICs, which go toward stuff like your State Pension and a bunch of benefits you might find yourself claiming from time to time. Gaps in your payment history can lead to trouble down the road, but you can sometimes make voluntary payments to catch up.

    Again, because the taxman loves his little codes, the NICs you pay are worked out from your National Insurance category letter. You can generally find this on your payslips, but most people using PAYE will be in category A. Here’s what they all mean:

    • A: Most employees.
    • B: Married women who qualify for lower National Insurance.
    • C: Employees over the State Pension age.
    • J: Employees already paying their NICs in another job.
    • H: Apprentices under 25.
    • M Employees under 21.
    • Z: Employees under 21 who are paying NICs in another job.
    • X: Employees who don’t pay NICs at all.

    Tax code allowances

  • What's a tax return and do I need to do one?

    Most people on PAYE never need to deal with the taxman directly to pay their normal tax. However, sometimes, HMRC’s going to want to stick its beak a little deeper into your business. Maybe you’ve got some extra cash coming in outside of your PAYE job, or maybe you’re trying to claw some money back through a tax rebate. When that happens, you might find yourself filing a Self Assessment tax return. Here are some examples of people who need to send returns:

    • Company directors or partners.
    • If you're self-employed as a sole trader and earn more than £1,000
    • People making over £100,000 a year.
    • People getting £10,000 a year from investments.
    • People making foreign or rental income.
    • Self-employed people.
    • People claiming tax refunds with over £2,500 in expenses.
    • Anyone else the taxman demands a return from.

    That last point’s a big one. If you ever get a letter from HMRC demanding a tax return, don’t ignore it. Even if you’re sure it’s a mistake, it’d be an even bigger one to leave the taxman waiting.

  • What happens if I leave my job?

    When you leave a job you get a form called a P45. This pretty much just tells you what you’ve earned so far in the tax year, and how much of it HMRC got its mitts on. You’ll be able to double check stuff like your National Insurance number and tax code, too.

    The main thing is knowing what to do next. If you don’t have another job to go to straight away, or if your new earnings are lower than before, you might be owed a slab of tax back. Basically, HMRC’s been taking tax from your pay on the assumption that you’ll keep making the same money for the whole tax year. If you stop work part-way through the year, you might well end up with a refund due.

    There’s another important form called a P60. This one’s got the same kind of information in it, but it covers the entire tax year. If you don’t get one you need to kick up a fuss, since you might have a tougher time claiming back the tax you’re owed without it.

    Getting to know your P45

  • What is marriage allowance? Would it save me money?

    The Marriage Allowance is a way of you and your spouse (or civil partner) shifting your Personal Allowances between you. Basically, if one of you isn’t getting the full benefit of their Personal Allowance, they can transfer £1,190 of it to the other. To pick an example, if your spouse is bringing in £10,000 a year with a personal Allowance of £11,850, they’re missing out on some of the benefit. In that case, they could shift £1,190 of their unused allowance over to you, meaning you don’t pay tax on over an extra grand of income. That’s worth £238 a year.

    Read our guide on marriage allowance

  • Do I pay tax on benefits?

    We’re all used to the taxman taking a big bite out of whatever cash we’ve got coming in. When it comes to benefits, though, he’s a surprisingly fussy eater. Here are some of the payments he wants his share of:

    • State Pension and pensions paid by the Industrial Death Benefit scheme.
    • Jobseeker’s Allowance (JSA) and contribution-based Employment and Support Allowance (ESA).
    • Carer’s Allowance and Incapacity Benefit (from the 29th week).
    • Bereavement Allowance, Widowed Parent’s Allowance and Widow’s Pension.

    While he’s stuffing his face on those, though, he’ll still manage to keep his hands off things like:

    • Housing Benefit and Income Support.
    • Working Tax Credit and income-related ESA.
    • Child Tax Credit and Child Benefit (depending on income).
    • Disability Living Allowance and Personal Independence Payment.
    • Severe Disablement Allowance and Industrial Injuries Benefit.
    • Guardian’s or Attendance Allowance.
    • Maternity Allowance
    • Pension Credit , War Widow’s Pension and lump-sum bereavement payments.
    • Winter Fuel Payments and Christmas Bonus.
    • Free TV licences for over-75s.
    • Universal Credit.
  • I live abroad, do I still have to pay UK tax?

    Unless you’re living overseas pretty much permanently, HMRC might still chase you for tax on what you’re earning. It’s all about whether or not you count as a “UK resident” for tax. A lot of that comes down to how much time you’re spending in the UK each year. If you’re here more than half the time, chances are you’re a UK resident.

    If your overseas employer’s a UK company, you’ll probably still be paying National insurance, too. For foreign employers, you might find yourself coughing up the local equivalent instead. To check what taxes you have to pay, HMRC has a few tests:

    • The Automatic Overseas test, which looks at stuff like where you spent the last 3 tax years.
    • The Automatic UK test, dealing with questions like whether you've got a "home" in the UK and how long you spend there.
    • The Sufficient Ties test, which asks about family, accommodation and so on.

    One smart thing to do before you leave is check if you're owed a tax rebate from HMRC. If you're leaving part-way through a tax year, you may not have used up all of your tax-free Personal Allowance. If you're registered for Self Assessment tax returns, don't forget to file one as normal after the end of the tax year.

    HMRC has a special form for people who are going to be away from the UK for a complete tax year. Visit their site for form P85 "Leaving the UK - getting your tax right" in good time before you leave.

    If you’re earning abroad, there’s a tricky catch to watch out for. Depending on your situation, you could actually end up paying tax in 2 countries at once! The UK’s got some “double taxation” agreements around the world to make this less painful, so it's worth checking with to see what you're letting yourself in for.

    If it turns out you’re not a UK resident for tax, you’ll normally be off the hook for your foreign income. You’ll still be paying UK tax on anything you’re earning here, though – along with things like UK bank account interest or rental income.

    Tax for ex-pats

  • Am I owed a PAYE tax refund?

    There’s a bunch of reasons why you might find the taxman picking your pocket. Maybe you’ve stopped working or left the country part-way through the tax year. Maybe you’ve been forking out for work travel or other essential expenses from your own pocket. If your circumstances have changed, like switching to a lower-paid job, then you might have paid too much tax over the year. You might even have been put on the wrong tax code. All of these things and more can mean you’re due a tax refund from HMRC.

    The thing is, the taxman’s not always going to hand it over automatically. For one thing, he won’t necessarily know how much you’ve been spending on things like travel for work. When you don’t get an automatic refund of what you’re owed, you have to make a claim yourself. That means working out exactly what you’re due, and backing it up with records and evidence. It’s a tough job for most people, and it takes a real tax expert to get the most from the refund system. A tax refund specialist can help find out what you're owed and claim it back. Even if you’ve never claimed before, you could still get back what you’re owed for up to 4-years.

  • What key PAYE dates and deadlines do I need to know about?

    The key thing to know about HMRC’s calendar is that the taxman celebrates his personal New Year’s Day on the 6th of April. Yes, it’s weird and clumsy, but it's got something to do with Pope Gregory XIII and the 11 days that went missing in September 1752. No, that’s not a joke.

    Anyway, here are some of the main dates HMRC keeps circled:

    • 5th of April: Last day of the tax year and the cut-off point if you’re claiming a refund for 4-years back.
    • 6th of April: Start of the tax year.
    • 31st of May: This is when you should get your P60 for the last tax year. P60 is a statement of all the tax you’ve paid.
    • 6th of July: This is when any P11d should be issued. P11d deals with any additional work expenses or benefits you get from your boss.
  • How long does it take to get a tax refund?

    The wheels at HMRC can turn pretty slowly sometimes, but they usually get there in the end. From start to finish, you’re probably looking at about 8-10 weeks to pry your refund cash from the taxman’s tightly clenched fist. Even so, there are a few things you can do to get your claim rolling as fast as possible:

    • Make sure you’ve got the important information to hand before you start. That includes your pay from your current and/or previous job, any work expenses you’re claiming for and any other cash you’ve got coming in. Depending on your situation, you might also need things like details of your pension providers. If there’s anything else the taxman needs to back up your claim, he’ll let you know what to show him.
    • Try not to hit any of HMRC’s busiest periods. Like anyone else, the taxman can get flooded around the end of the year. A lot of people end up stranded on helpline queues close to the 31st of January deadline, for instance. If you run into a snag, it could be tough to get advice on short notice.
    • Think about making your claim through a tax refund specialist. The right advice and help can make a massive difference to how smoothly the process runs.
  • How much is my tax refund worth?

    How much tax you can pry out of HMRC’s clutches depends on your situation. On average, though, a typical yearly refund claimed through a specialist like RIFT is worth around £750. If this is your first refund claim and you’re claiming for the full 4-years, that adds up to over £3000!

  • How can I reduce my Income Tax?

    When you're trying to bring down your Income Tax bill in the UK, there are a few basic things to check:

    • Are you making the most of your tax-free allowances? If you've got more than one job, for instance, you might find you're not getting the full benefit of your Personal Allowance. If you're married or in a civil partnership, one of you may be able to transfer an unused chunk of their Personal Allowance to the other so it's not wasted.
    • Are you getting the best out of your savings? ISAs, for example, have a limit of £20,000 you can pay in per year for tax-free interest. Are you eligible for the starting rate for savings—which could see you earning up to £5,000 of interest tax-free?
    • Are you claiming your yearly tax refunds? Most importantly, if you're reaching into your own pocket for the essential costs of doing your job, you could be owed a tax refund each year. Everything from essential work travel to upkeep of your tools and uniform or professional subscription fees could count toward your annual refund.
  • What income is not taxable?

    Most people in the UK get a tax-free Personal Allowance worth £12,570 per year. You won't start paying tax on your income until you go over that. There are also several other kinds of income that you won't need to pay tax on, such as:

    • The first £1,000 you make in a year from self-employment or renting out property. This includes rent from lodgers that falls below the Rent a Room limit.
    • Interest and savings growth from ISAs, along with any dividend income under your dividends allowance.
    • Many kinds of state benefit.
    • Winnings from the National Lottery or Premium Bonds.
  • How much can I earn in the UK before paying tax?

    Most people in the UK qualify for a tax-free Personal Allowance, which is the amount they can earn before they start to pay Income Tax. The standard Personal Allowance for 2022/23, for example, is £12,570. Anything you earn under that threshold won't be taxed.

  • How do I calculate my income tax?

    If you're on the books and paid through the Pay As You Earn (PAYE) system, your tax is calculated automatically for you by HMRC, based on your tax code. This is why it's so important to check the code you're on, and to ask questions if it changes unexpectedly or looks wrong.

    If HMRC notices that you've paid too much or too little tax, they might send you a P800 tax calculation form to explain the situation and tell you how they're squaring it up. However, when you've got expenses to claim a tax refund for, HMRC won't automatically know about them. That's why you need to make a tax refund claim to get your money back.

  • Will I get a tax refund if I've only worked 6 months?

    Yes, absolutely! In fact, only working for part of the tax year almost certainly means you're owed a tax refund. When HMRC works out the tax you'll pay through the PAYE system, it assumes that you'll be earning steadily throughout the tax year. If you stop working part-way through, your PAYE payments for the year will have been too high. That means you'll be owed some tax back.

  • Do HMRC know my savings?

    HMRC certainly has the power to look into your financial affairs to make sure you're paying the tax you owe. Depending on the situation, they may be able to get information directly from your bank or building society. This can happen, for instance, if they're actively investigating your situation.

  • Why is my PAYE so high?

    If your PAYE tax looks too high, there are a few things that might be worth looking into. For example:

    • Are you on the wrong tax code? HMRC sometimes changes your code to account for things like your regular work expenses. Mistakes can also creep in occasionally, so it's worth keeping an eye on the tax code listed in your payslips.
    • If you've got more than one PAYE job, is your Personal Allowance attached to the wrong one? If one of your jobs earns less than your tax-free threshold, then linking your Personal Allowance to it will mean you're not getting its full benefit.
    • Are you claiming back the tax refunds you're owed each year? Talk to RIFT to see how much tax you're owed back, and get your refund claim rolling.
  • What's self-assessment? Do I need to file a tax return?

    Self Assessment generally is how people report any cash coming in that isn’t taxed PAYE. Self-employed people use the system to sort out their Income Tax and National Insurance – but a lot of other people have to file returns, too. For instance:

    • People claiming PAYE tax refunds with over £2,500 in work expenses.
    • If you're self-employed as a 'sole trader' and earned more than £1,000
    • Company directors.
    • People earning over £100,000 a year.
    • People making £2,500 or more from things like rental income or investments.
    • People claiming Child Benefit, if they or their partner earns over £50,000.
    • Basically anyone who gets a demand for a tax return from HMRC. Never ignore these, even if you’re sure it’s a mistake.
  • I've just become self-employed. How do I tell HMRC?

    If you’re thinking of becoming your own boss, you need to let HMRC know quickly so you don’t end up choking on tax bills and penalties. That means registering online for Self Assessment by the 5th of October. Depending on how you’re set up (Sole Trader / Limited Company, etc.), you might have some other paperwork to handle as well.

  • How does self-assessment work?

    Once you’re registered and have a Unique Taxpayer Reference number (UTR), you can go online and fill in your yearly Self Assessment tax return on the HMRC site. There’s a hard deadline of the 31st of January for filing and paying up what you owe. If that date blows by and the taxman doesn’t hear from you, you’ll be looking at a minimum of a £100 fine. The longer you keep him waiting, the worse the penalties get.

  • How do self-assessment expenses work?

    When you’re running a business, a lot of the cash you’re spending on essential costs can be used to bring down the tax you owe. Unlike with PAYE, the taxman doesn’t have his sights set on every single penny you’ve got coming in. It’s your profits he’s interested in. Costs that are completely necessary to run your business count against the income you’re paying tax on. The more you’re spending on your business the less tax you owe.

    To get Self Assessment right, you need to get comfy with keeping records. Every time you spend cash on your business, you need to keep some evidence of it. Treat your invoices and receipts as if they were money. When it comes to filing your tax return, that’s exactly what they’ll be.

    As for what counts as an “allowable expense”, it all depends on what business you’re in. The basic rule is that if it’s completely necessary and only for business use, it probably counts.

  • What are the main self-assessment dates and deadlines?

    When you’re dealing with Self Assessment, the clock’s always ticking. Here are the big dates and deadlines to watch out for:

    • 6th of April: Start of the tax year.
    • 31st of July: Deadline for paying your second payment on account.
    • 5th of October: Deadline for registering for Self Assessment.
    • 31st of October: Deadline for filing tax returns on paper.
    • 31st of January: Deadline for online tax returns and paying the tax you owe (including your first payment on account for the next tax year).
  • What are payments on accounts?

    When you’re paying your tax via Self Assessment, HMRC doesn’t like waiting. In fact, the taxman hates hanging around so much that he makes you pay tax in advance on money you might not have even earned yet! Here’s how it works:

    • HMRC looks at the Self Assessment tax return you've just filed, then calculates the tax you owe.
    • Blindly assuming that nothing's going to change in your next return, he guesses that you'll owe the same next time.
    • He cuts that number in half, then charges you two payments on account of that amount over the following year - the first by January 31st (along with the "balancing payment" for the previous year's bill), then another by July 31st.

    The good side to payments on account is that, when the January tax deadline rolls around, you’ll probably have already paid most of the tax you owe for the year. The bad side is that the amount you’ve paid is based on estimates. If your income drops from one year to the next, you’ll have paid too much tax and will need to claw some back. Find a specialist accountant or tax rebates expert to help you out.

  • What happens if you don't pay tax?

    The fines and penalties for not paying the tax you owe start to bite if you're even one day late with your payment:

    • An automatic penalty of £100 for being even a single day late.
    • £10 per day added onto your penalty total for every additional day after the deadline, up to a maximum of £900.
    • After 6 months, another penalty of either £300 or 5% of the tax you owe (whichever's higher).
    • After 12 months, yet another £300 or 5% of the tax you owe (again, whichever's higher).
  • What can I claim on tax without receipts?

    When you're claiming a tax refund, the more information and evidence you can show to HMRC the better. You won't necessarily need to keep every last scrap of paper just to make your claim, but a good record of the mileage you've travelled for work is a great start. After that, the more receipts you can keep, the more tax you'll be able to claim back.

    If you're really not a fan of paperwork, you could choose to use HMRC's flat-rate expenses system instead. Rather than keeping precise records of what it's costing you to do your job, you can claim fixed amounts that vary depending on the kind of work you do. You'll probably never get back all the tax you're owed this way, but it can be simpler overall to claim it.

  • How do I know how much tax I should pay?

    HMRC has specific tax bands that determine how much Income Tax you owe, and at what threshold you start paying. For example, here are the 2022/23 tax bands for England and Northern Ireland:

    • Personal Allowance: Up to £12,570 tax-free.
    • Basic rate: Earnings from £12,571 to £50,270 taxed at 20%.
    • Higher rate: Earnings from £50,271 to £150,000 taxed at 40%.
    • Additional rate: Anything over £150,000 taxed at 45%.

    Keep in mind that Income Tax isn't the only thing you'll need to pay from your earnings. There's also National Insurance to consider. Your National Insurance contributions (NICs) will depend on how much you're earning, and whether you're "on the books" or self-employed. Again, if you're employed, this will be handled automatically through PAYE. If you're self-employed, all the calculations will be based on your yearly Self Assessment tax returns.

  • Can I go to jail for not paying taxes in the UK?

    It's certainly possible to find yourself facing a prison term and a criminal record for failing to pay the tax you owe. If you're found guilty of tax evasion, for instance, you could end up with anything from 6 months to 7 years in prison, not to mention the fines and legal fees involved.

    It's not just tax evasion that can land you in prison, though. Every year, for instance, about 100 people are given prison sentences for falling behind in their Council Tax payments.

  • Can I pay my child a salary in the UK?

    If child is at least 13 years old (for part-time work) or 16 (for full-time), they can start earning (there are age limit exceptions for certain types of work, like TV or the theatre). If your child's under 16, they won't need to pay National Insurance or be included on your payroll. If they're 16 or over, though, you can pay them a salary through the PAYE system. At that age, they'll be entitled to the National Minimum Wage. Obviously, if your child is already an adult, then all the normal rules for employers apply.

    There are specific restrictions about employing younger people, so check the gov.uk site and your local council's rules for more information.

  • Homeownership/Renting

  • Household tips

  • Income & Tax

  • Saving & Investments

  • Setting realistic expectations for your retirement

    Most people want to retire around the age of 65, or even sooner. The sad truth, though, is that it can be tough to stack up enough savings in your pension pot to hit that target. The earlier you retire, naturally enough, the less money you’ll have to live on – and the longer it’ll have to last. On the other hand, working for a few more years means you’ll be able to save more with less chance of the cash running dry before you do.

    We know – it feels weird trying to guess how long you’re going to live, and it’s a more complicated question than it sounds. It’s one of the most important expectations to set when you’re planning your retirement, though. If we start looking at the basic averages for the UK, for instance, a typical 40-year-old Brit who retires at 65 is probably looking at a 17-year retirement period before they shuffle off. Good exercise habits and a healthy lifestyle could bump that up by as much as a decade, though. Those extra years are going to need to be paid for – which means they’re going to need to be saved for.

    The next question to ask yourself is what your lifestyle expectations are once you hit retirement. Again, this is a pretty vague and complicated thing to wrestle with, so let’s break it down a bit. Fixing up your home, for instance, can chomp a big bite out of your savings pot. We’re not just talking about renovations, either. You might need to make a few changes as you get older to help you get around. You’ve also got your leisure needs to pay for, like holidays. If you’ve been waiting until retirement to see the world, for example, you’ll need a fair bit of cash set aside for travel. Even just expecting to run a car will drain regular money out of your pot, so it’s important to find a balance between the retirement you want to have and the cash you can realistically stash toward it.

  • How far will my state pension go?

    As of 2021/22, the basic State Pension pays out £141.85 per week after you hit the age to collect it. That’s assuming you retired today, because the amounts do change over time. The other thing that changes is how old you need to be to get it. Currently, that age is 65, but it’s already on the rise. People born after the 5th of April 1960, for instance, will have to wait until they’re 66 to claim their State Pensions. People born after the 5th of March 1961, on the other hand, won’t qualify until they turn 67.

    That amount’s guaranteed for as long as you live, but in itself really won’t buy you much of a standard of living. In fact, it’s hard to imagine living on it at all. So why have you been paying into it through your National Insurance contributions for all these decades, then? Well, your State Pension can be a major head-start toward hitting your retirement saving goals. By adding guaranteed cash to your income from private pensions for life, it’s a pretty big boost to your overall income.

    In his Autumn Statement of November 2022, Chancellor of the Exchequer Jeremy Hunt announced that the State Pension, along with means-tested and disability benefits, would be rising in line with the inflation rate of 10.1%.

  • How much do I need to retire?

    With your basic expectations in mind, it’s time to start making plans. It’s actually pretty easy to make the mistake of overestimating what you’ll need to live on once you’ve retired. Paradoxically, that can often leave people feeling like it’s not worth saving at all. The truth is, you really won’t need the equivalent of your working wage after you’ve stopped working. A lot of the day-to-day costs you’ve got used to over the years really won’t be a factor in retirement.

    So, as a basic rule of thumb, you’ll probably find you’ll need anywhere between half and two thirds of your working income, based on the final salary you had before retiring. That’s after tax, of course. With that much coming in each year, you ought to be able to keep up the kind of lifestyle you’ve been used to.

    Why? Well, for one thing you’re likely to have paid off your mortgage. That alone accounts for a major chunk of most people’s monthly income. If you’ve spent decades of your life paying to bring up kids, the chances are they’ll have left home by the time you retire as well. Then there are the costs involved in actually doing your job – the kinds of expenses you’ve hopefully been claiming tax refunds for all these years. Daily commuting expenses, for example, can be a pretty big drain on your wages, but in retirement those costs just evaporate.

    One ballpark figure that a lot of advisers tend to toss around is the rule of 10. Basically, you should aim to have 10 times your average salary saved by the time you stop working. We’re talking about your salary averaged out over your working life here. So, for instance, if that average came to £30,000 you’d be looking at a savings target of £300,000 by your retirement age.

    As for actually hitting that impressive target, it actually might not be as tough as it sounds. Again, taking an average yearly salary of £30,000, regularly saving just 12.5% of that could get you there over your working life. It works out as saving £312.50 per month into your pension scheme, assuming 4% growth. Over 40 years, you’ve hit that £300,000 target nicely.

    If you’ve got a workplace pension then reaching your £300,000 goal gets even easier, since your employer will be making contributions too. Assuming they match your own contributions, you’d only need to pay in £125 per month to hit the magic £300,000 mark over 40 years. How does that work? Well, your employer’s contributions would double yours up to £250, then the 20% tax relief you get on the total amount effectively bumps it up to £312.50.

  • Healthcare tax refunds explained: which costs count towards your claim?

    As with any other sector, not every mile you travel or pound you spend will count toward your tax refund. As we mentioned above, daily commutes to permanent workplaces don't qualify. To earn you some tax back, the mileage you're claiming for needs to be to and from “temporary workplaces”. Generally, this just means somewhere you work for less than 24 months in a row.

    For example, a nursing job that sees you travelling to patients’ homes could be eligible for a pretty decent tax refund. On top of this, subsistence costs while you're on the move can also be included in your refund claim. We're talking about things like accommodation and food costs. Again, while those bills might not seem like much from day to day, they can stack up over time into a healthy tax refund.

    Healthcare tax refunds can be complex, especially when you're travelling to a number of hospitals or clinics within the same general area. If your mileage and travel times don't change much between workplaces, HMRC might call the entire region you're travelling in to be a “permanent workplace”. Wrinkles in the rules like this are why it's always best to get professional advice when making your claim. The regulations are easy to trip over, but with the right help you can steer clear of problems. For example, rotational contracts, that have you working full-time at a string of hospitals over years, usually won't qualify for work travel tax refunds. However, training under (for example) a single 5-year contract could mean each workplace counts as temporary. In effect, it's a single employment with multiple temporary workplaces.

    You may still be owed some tax back even if some of your costs are being reimbursed by your employer. The rules around HMRC's Approved Mileage Allowance Payments (AMAP) say that, if you're not getting the full amount you qualify for, you can claim back the difference in a tax refund. The NHS has its own rates as well, if you're employed by them.

    Importantly, the costs you’re claiming tax relief for must be essential for your work, and being paid from your own pocket. HMRC will expect you to show proof of what you’re spending in your claim, so records and receipts are essential. Once again, though, the Flat Rate Expenses system can offer an easier way if you don’t mind using HMRC’s figures.

    If you're buying things like laptops or office equipment for work, you may also be able to claim capital allowances for them. This is generally for items with a fairly long expected lifespan. As always, you'll need to be paying for them yourself to qualify for tax relief.

  • Why do healthcare workers pay too much tax?

    There are lots of reasons why a healthcare worker might have overpaid their Income Tax. Under PAYE, the tax you owe is taken from your pay before you get it. However, all the “hidden” expenses of doing your job actually qualify you for some of that tax back. These “tax deductible” costs can include things like work travel, professional subscriptions and even upkeep and replacement of equipment and uniforms.

    As a nurse working through an agency, for instance, you might have a range of duties to perform throughout a day, using your own vehicle to travel between them. You can’t claim anything for a “normal commute” between your home and your first job of the day, but there's more to work travel than that. All the other trips you make during that day’s work could easily still be covered by the tax refund rules.

    There's more. Buying food while you’re out on the road for work can count toward your healthcare worker tax refund as well. Those costs might seem relatively trivial at around £5-£10 a day, but they add up over time – as does the tax refund they earn you.

    Other, longer-term costs can also factor into your claim, including professional subscriptions like Royal College of Nursing fees, for instance. Even things like laundry bills for your uniform can count toward your refund, assuming you're paying them yourself. You can't, for instance, claim a tax refund for washing your uniform if your employer has free laundry facilities available for you—even if you're doing the washing elsewhere.

  • Statutory Sick Pay

    From 13 March 2020, the rules allowed employees to claim statutory sick pay (SSP) if they were unable to work due to COVID-19. This included those who were too ill to work, were self-isolating due to symptoms or who were "shielding" at home due to their vulnerable status.

    With SSP, you can get up to £99.35 a week. It can be paid by your employer for up to 28 weeks and will start from the 4th day of you being unable to work. However, if your time off work started before the 25th of March 2022, you can get SSP for the first 3 working days if your absence was due to COVID-19. The same applies if you've received SSP within the last 8 weeks, including the 3-day waiting period before you received it.

    For more information, check out GOV.UK.

  • Universal Credit

    For those most in financial need, the Universal Credit offers a lifeline. It’s a payment designed to help with your living costs if you’re on a low income, out of work or unable to work. You could receive it on top of SSP as a top-up benefit.

    To find out more, check out GOV.UK’s guide to understanding Universal Credit.

  • Mortgage holidays

    For many people, the mortgage is their biggest monthly outgoing. If you've been experiencing difficulties trying to make these repayments, you may be able to arrange a "mortgage holiday" with your lender. This basically means your repayments will be paused for an agreed period—although you'll still have to pay the same amount eventually.

    Mortgage lenders agreed with the government to offer these repayment holidays for 3 months to any household facing financial hardship because of the coronavirus pandemic. Meanwhile, many landlords also made use of a mortgage holiday for tenants with money worries.

  • The Job Retention Scheme

    You may have heard of friends or family being furloughed during the pandemic, or perhaps you’ve been furloughed yourself. The scheme ensured businesses did not have to face tough decisions about losing staff. As the start of the scheme, they were able to claim back up to 80% of a furloughed employee’s wages, with a cap of £2,500 a month.

    The scheme was extended to the end of September 2021, when it finished.

  • Death in service

    In recognition of the increased risk faced by staff during the crisis, a new life assurance scheme was launched for eligible frontline health and care workers during the pandemic.

    The families of workers who died from coronavirus in the course of their frontline essential work received a £60,000 lump sum, worth roughly twice the average pension pay for NHS staff.

  • Support from nursing charities

    Some charities accepted applications for grants during the pandemic, and continue to do so. For example, the Cavell Nurses' Trust offered support for short-term financial emergencies, including many situations arising as a result of coronavirus, including the need to self-isolate or a reduction in a partner’s income. you can find details on how to apply for current grant schemes on their website.

    You could also explore other charitable grants using Turn2us, which searches for benefits and grants you may be eligible for.

  • Find help with debt

    When your debts are getting out of control, it’s critical that you take full advantage of the help on offer. For basic, practical and effective guidance, you could do a lot worse than the Citizens Advice Bureau or National Debtline. Another option is Stepchange, a charity dedicated to helping people conquer their debt problems. They help 650,000 people a year, with specialised services for people with mental health issues and a free advocacy system.

    For local help, you can find a list of nearby debt services at the Christians Against Poverty website. Just enter your post code to get started. There’s also a fantastic list of helplines and support groups for mental health issues on the NHS website, covering everything from stress and depression through to panic attacks and bipolar disorder. There’s even a specialist charity called The Lighthouse Club for the construction industry, where mental health is a serious issue. They have a dedicated helpline and even a construction worker mental health app.

  • Hidden costs of higher education

    Turning 18 holds great significance. It’s a time full of promise and marks your journey to becoming an adult. You can register to vote, buy your first pint and even get married without parental consent. It may also be a time that your child looks to begin their undergraduate degree.

    You’ve probably heard of the tuition fees that can cost upwards of £9,000 a year. Thankfully, the cost of this is covered by the Student Loans Company and will only begin to be paid back once your child earns over a set amount.

    Maintenance loans work in a similar way although these are often used to cover day-to-day living costs such as transport and food. The maintenance loan amount is calculated on your household income, as technically, the more you earn the more you can afford to support your child.

    Unless living at home, accommodation will be an extra cost that may have to be covered by yours truly. Times Higher Education found the average cost of accommodation to be just under £5,000 a year. As undergraduate degrees usually last three years, that’s £15,000 in total. If based in locations with high rent such as London, you could have to fork out even more.

    This would be a scary cost to most parents, so we’ll help you figure out how much you’d need roughly to save for your child before they enter the big wide world.

  • How to save for that holiday

    The best place to start is with a budget. After all, if you don’t know how much something costs on average, the chances are you’ll end up spending a lot more than necessary. Of course, one of the biggest factors in the cost of your holiday really is where you go. But once you’ve picked your destination, have a look online or in travel agencies to see how much travel and accommodation should cost. And if it’s any cheaper to bundle them together.

    Then, think about how much you’ll spend each day you’re away, including tickets for any excursions, and add that to the price of accommodation and getting there. That should give you a pretty clear idea about what to budget for your trip.

    However much you think the holiday should cost, put aside a bit more. While it’s tricky to anticipate things like car breakdowns and plumber callouts, these are the kind of expenses that could derail your holiday fund. If you expect the unexpected, you’ll be able to solve that short-term emergency and still get that relaxing break. 

    Even if you haven't decided where you’re going, having any kind of saving plan in place puts you in a great position when you finally pick your destination.

    If you’re unsure where to start, how about saving £3 a day? By putting aside just £3 each day, you’ll have £1,100 in a year’s time. That’s enough to get you to the other side of the world, and all for the price of a daily cup of coffee.

  • Download our budget planner

    Our free 50/30/20 spreadsheet automatically divides up your income into three main categories:

    • Living expenses
    • Discretionary expenses
    • Savings

    Free planner

    If you’re anything like us, you’ll have multiple streaming services that you pay for, whether it’s for music, films, TV or books. Each of them are pretty good value for money, but altogether, if you’re paying for a few at a time, It can work out quite costly. If you’ve forgotten about one of the services you pay for, or you’ve simply stopped using it, just cancel it! Most run on a rolling monthly basis at £10 a month, so put that tenner straight into your holiday fund instead. £120 after a year could get you a seat on a return flight to Europe. There are ways to save as you spend, too. As of January 2022, 27% of British adults have opened an account with a digital-only bank. Soon, 93% of us will be banking online somehow, whether on apps or at our desktops. With your average bank account nowadays, the interest rates are pretty low, but apps have made it easier than ever to control our money and save towards a target. Banking apps like Monzo, Revolut and even NatWest all have a saving pot feature. You can set up a savings pot for that Summer holiday, and whenever you make routine purchases, it’ll round up to the nearest pound and put the spare change in your holiday fund. If it’s a big trip you’re planning for, you’ll need to save for it longer than you would for a weekend in Paris, for example. If you can wait a year for that holiday of a lifetime, why not put the money you save up into an ISA? ISA stands for individual savings accounts, and they’re tax free up to a certain amount. That means you don’t pay tax on the interest your savings gain. You’ll need to have your money in an ISA account for a year to earn the interest, and of course, some have better interest rates than others. Check out our video below to learn more about the different kinds of ISA that are available.

  • Keeping the cost of travel down

    In most cases, wherever you go, the cost of getting there can vary massively and it pays to book early.  That same seat can treble in price by the time your holiday rolls around, so get things off to a flying start by booking as soon as possible.

    Before you start booking, remember to clear your cookies, and deny any unnecessary cookie permissions on any sites you visit. Many online booking websites use a dynamic pricing system that tracks the price you’ve been given for flights and package deals. Then, the price increases when you search repeatedly.

    If you think you’ll forget to deny those permissions on each website visit, use an alternative browser that opts out of cookies, like DuckDuckGo.

    Another great way to save on the cost of getting there is with reward schemes.  For instance, Tesco Clubcard points can be exchanged for Virgin Atlantic points. These can be used to pay for flights to certain destinations. Think about that – your weekly food shop could pay for your airline seat!

    If you’re not signed up to any reward schemes, don’t worry – there are still plenty of things you can do to make that ticket a bit cheaper.

    Don’t just settle for the first price you see for a return flight. Price comparison sites like Skyscanner and Kayak not only compare the price of flights on the same day, but can also show you which day is the cheapest to fly in a certain month. So, if you’re flexible, keep in mind you can save a bundle by travelling on a certain day.

    Once you’ve picked the days you’ll be away, take a look at the different times that are available. Night flights may be a pain, and you may have to go nocturnal for a couple of days, but they can be around 30% cheaper than afternoon flights. And much cheaper than flying out in the morning.

    Finally, look out for the hidden charges before you book your seat. What does your ticket actually include? Many budget airlines offer very tempting flight prices, but once you get to the till, you find that some things are missing. Like your cabin bag, suitcase, and the chance to sit next to your partner or travel companion.

    Paying for each of these things can take the total to more than you would’ve paid for other airlines that include them in their fares.

  • How to save while you're away

    Whether you want to visit museums, go on a city tour, or any other excursion. These activities are nearly always cheaper when booked online and in advance than they are on the day at the box office.

    Instead of getting stung by door prices when you get there, plan your days in advance and book your tickets before you arrive. Even if you only save a euro or two, that’s money you can put on your restaurant bill that evening. Make your cash go further!

    Some of the banking apps that we mentioned previously, have a savings pot feature allow you to temporarily change your payment settings, so every time you pay by card, it comes straight out of the holiday pot instead of your normal account. That means that you’re only spending the money you’ve budgeted, and the money in your normal account stays untouched. 

    If you are planning on using a card instead of cash while you’re away, make sure you know about any fees you might incur before you go. Some banks will limit the amount of money you can withdraw without charge when you’re abroad, while some charge a fee for every transaction you make.

    Look out for cards that don’t charge any fees for transactions, and also cards that go by the MasterCard or Visa exchange rate. Visa tend to offer a better exchange rate than MasterCard, but both are usually better than you’ll find at a bureau de change on the day.

    That being said, if you’re planning to take local currency with you in cash, keep an eye out for the exchange rate before you go. You can find the best deal for exchanging currency on price comparison websites, so take a look before you get your money sorted!

  • Home equity loans

    Home equity loans and home equity lines of credit (HELOCs) are another kind of general agreement where you don’t need to use the cash for any pre-arranged purpose. The twist with these ‘second mortgage’ types of deal is that they let you borrow up to a given percentage of your ‘equity’ in your own home (meaning how much of its cost you’ve paid off).

    A basic home equity loan comes as a lump sum, which you pay back like a normal instalment loan. The terms will probably stretch out over 5 to 30 years, depending on what you’re borrowing. With a HELOC agreement, on the other hand, you’re signing up to more of a revolving credit arrangement. You can draw cash out up to a set limit as you need it, and only pay interest on what you’ve actually taken out. 20 years is standard for a HELOC plan. While a home equity loan will have a predetermined interest rate, HELOCs generally have variable ones.

  • Amazon Echo Dot (3rd Gen): £24.99

    Coming in a tenner cheaper than the newer 4th Gen model, this easy-to-use device has a built-in speaker to handle all your audio demands. It’s hooked up with the Alexa AI system, meaning you can ask it questions and get an instant reply. It’ll keep you up to date with the latest news and weather reports, and connect to your other smart home gadgets to control your lights, thermostats and even door locks. A very cool, low-cost system, ideal for beginners.

  • Aetoc Smart Home Hub: £99.99

    Compatible with over 5,000 smart home devices through the popular SmartThings system, this hub has a lot to offer. It’s pretty much ideal if you’re after the full “smart home experience”. From heating and lighting to security and entertainment, the Aetoc hub lets you create routines and custom automations to suit your own needs.

  • Apple Homepod Mini: £89

    This is the main Apple rival to the humble Amazon Echo Dot. Instead of Alexa, it uses the Siri AI assistant system. Again, you can get it to answer questions, search the internet for information and control your smart gadgets with your voice. If you’re already a big Apple device owner, it’s a very nice addition to your home set-up. You can even hook it up to other Homepods to work as an in-home messaging system. It can recognise up to 6 people’s voices so no one’s left out of the loop.

  • Insulate your hot water cylinder: save £18 a year (and maybe the world)

    Fitting good quality insulation around your hot water tank isn’t just good for your household budget; it’s good for the Earth, too. A decent insulation jacket will bring down a typical household’s carbon emissions by a massive 110kg per year. At the same time, you’re reducing the heat loss from your tank, so your water stays hot longer. It’s a win/win situation for everyone.

  • How to check your tax-adviser's credentials

    It’s not always easy to know how far to trust the advice you get in any walk of life. Luckily, with tax advisers you can check their credentials fairly easily. A good adviser will have properly regulated qualifications from a professional body to show you, so you’ll know their skills and knowledge are both up to standard and up to date. A fully accredited tax adviser has to have Professional Indemnity Insurance, too.

    Here’s a quick list of professional bodies who can point you in the right direction when you’re looking for a tax adviser:

    • The Institute of Chartered Accountants in England and Wales (ICAEW).
    • The Institute of Chartered Accountants of Scotland (ICAS).
    • The Chartered Accountants Ireland (CAI).
    • The Association of Chartered Certified Accountants (ACCA).
    • The Chartered Institute of Taxation (CIOT).
    • The Association of Accounting Technicians (AAT).
    • The Association of Taxation Technicians (ATT).
  • How does tax relief work?

    Tax relief can put money back in your pocket by refunding certain essential work expenses. You can claim an HMRC tax rebate for expenses like business mileage, professional subscriptions, and necessary tool replacements. The more you spend on eligible expenses and the higher your tax band, the more tax you can reclaim. If your claims exceed £2,500, a Self Assessment tax return is necessary, which RIFT can handle for you.

    Check out our tax refund claim checklist for more information on HMRC tax rebates, and to see how RIFT gets that money back in your pocket.

    Tax Refund claim checklist

  • How does UK tax work?

    Whether you work part-time around your studies or do some temping or casual work in the holidays, when there’s money coming in Her Majesty’s Revenue and Customs (HMRC) wants to know about it. If you’re working for an employer, then you’ll usually have tax taken off your pay through the Pay As You Earn (PAYE) system. Under PAYE, HMRC basically swipes a slice of your cash directly from your employer before you get it. It’s a pretty simple system when it works properly, but there are a few wrinkles that can see you paying more than you should.

    When you’re your own boss, things are a little different. HMRC won’t necessarily chase you for every penny you make selling things online or whatever. If you’re making over £1,000 a year, though, the taxman will probably decide you’re running a business. That means you’ll have to register yourself as self-employed and start filing Self Assessment tax returns every year. Basically, HMRC will want to hear about all the money you’ve got coming in and going out of your business. You’ll only be taxed on your profits, so the cash you splash just to stay afloat can often bring down your total tax bill. Self Assessment comes with a set of deadlines to hit and rules to obey. The penalties for getting it wrong can be pretty nasty, too, so always go in with your eyes open.

    There are other kinds of tax as well, like the Value Added Tax that gets lumped onto most of the things you buy or Council Tax you pay on the value of your property. For most students, though, it’s Income Tax that trips them up, so it’s really worth getting comfortable with the system early.

    What about national insurance?

    National Insurance isn’t exactly a tax, but it’s still pretty much collected like one. It’s used by the government to cover the costs of things like state benefits and pensions. If you don’t keep your payments up, for instance, then you might find yourself out of luck (and pocket) when you hit State Pension age. Employed people pay Class 1 NICs, again collected by their employers. Self-employed people pay Class 2 (flat weekly rate) and Class 4 (based on profits) NICs.

    Beyond England

    Another quick thing to keep in mind is that tax systems aren’t necessarily always going to be the same through the whole UK. Scotland, for example, has had its own Income Tax scheme since 2017. The rates and thresholds it sets are different from England’s. Wales can also partially set its own rates, by essentially lowering the amount of tax the UK government collects, but adding in a Wales-only tax rate on top. In practice, so far, it makes no difference to the total tax paid, but that could change in the future.

  • How long does it take to get a p45?

    Your employer has to give you a P45 when you leave a job for any reason. That said, depending on your situation, you might not get your P45 on the exact day you leave. Generally, though, you ought to get it very soon after your tax and other deductions are sorted out for your final pay period at the job.

  • How long is a P45 valid for?

    A P45 only counts for the specific tax year it refers to. Tax years run from the 6th of April in one calendar year to the 5th of April in the next. If you start work at a new job in the same tax year as you left your old one, you can show your P45 to your new employer so they can put you on the right tax code.

  • How much do I need for a deposit?

    Just like house prices, mortgage deposits can vary greatly. Generally, you can borrow up to 95% of a home’s market value - meaning you’d only need to make up the other 5% with your deposit. One thing to keep in mind is that, because you’re borrowing a larger amount of money, your repayments could cost a lot more than if you were to pay a bigger deposit.

    Quite often, the best mortgage rates only become available if you pay a minimum deposit of 20%. Over time, this could work out cheaper as you’d pay less interest over the duration of your mortgage. Some banks may also have hidden clauses that require you to put a minimum deposit down. Some examples are if you’re a first-time buyer or your home isn’t a new build - so it’s definitely worth doing your research before applying.

    With all this in mind, it's finally time to look at the fun stuff - properties. Property values around the UK also vary in value depending on where you’re looking to buy. According to the Office of National Statistics, the average house price in London comes in at just under half a million pounds. While if you were to look in the North East, you’d be looking at around £145,000.

  • How much can I borrow?

    This is a big question, and it’ll shape basically every decision you make when you’re buying your home. Generally speaking, you can expect a bank to set a cap of 4.5 times your yearly salary. If you’re combining 2 people’s incomes for your calculations, you might find they set it at 3.5 times that combined figure.

    So, for a mortgage based on a single salary, you're probably looking at a maximum of:

    • Single salary of £20,000 per year: £90,000 mortgage
    • Single salary of £30,000 per year: £135,000 mortgage

    If you're a couple using both incomes for the deal, those maximum figures would be:

    • Combined income of £20,000 per year: £70,000 mortgage
    • Combine income of £30,000 per year: £105,000 mortgage

  • How much does a baby cost?

    It’s all too easy to get carried away with the cute stuff! Some UK sources report people spending anywhere between £6,000 and £12,000 in a baby’s first year. 

    Child Poverty Action Group’s ‘Cost of a Child’ report estimates the cost of raising a child until the age of 18 is £71,611 for a couple and £97,862 for a lone-parent family. If you also have childcare costs, that bill can be as high as £185,413.

    In the first month alone, you can expect to spend around £500. MyVoucherCodes have worked that out as:

    • £23.52 on nappies
    • £243 on clothing
    • £53.51 on feeding equipment
    • £183.51 on things like toys and furniture

    …and 64% of those asked said they weren’t prepared for that spending. The good news is that there are a few ways you can keep those costs down…

  • What are baby essentials and what aren't?

    There are so many nice things you can buy for babies it can be difficult to know when to stop! But if you can resist all that cuteness, you’ll be doing your bank balance a favour. Don’t forget, babies go through growing stages quickly so some items you’ll only need for a short period.

    If you’re money conscious, think value for money first and foremost.

    Cot or cot bed – for safe and comfortable sleeping.

    Bedding and blankets – pillows and duvets are not safe for small babies.

    Baby clothes – a week’s worth of stretch suits and baby vests are essential. Cardigans and clothes for layering are recommended. ‘going out’ clothes are a nice to have but not essential. If the weather’s cold, you’ll also need a hat and mittens.

    Sterilising or feeding equipment – If you’re bottle feeding, you’ll need to keep everything sterile. 

    Pram or pushchair - to choose a suitable model, think about where you’ll be going and whether you’re using the car or public transport. New babies need a fully reclining pram or pushchair so that they can lie flat.

    Car seat – if you have a car, a car seat is a legal requirement.

    Travel systems can be a good investment as they have a car seat and can grow with your baby’s changing needs.

  • How can I work out my budget?

    Your baby budget will depend on your income and other outgoings. Working out what it is means you can stay within it and not get into debt with a new baby.

    The most important thing to factor in is how your income might change. If you can take advantage of full maternity and/or paternity leave with pay, that makes life a whole lot easier. If not, or you want to take more time off work without full pay, it’s time to plan ahead.  

    Use this baby costs calculator to work out your baby budget

  • What help can I get?

    Knowing what you’ve got coming in is essential to planning your parental leave – and being able to afford it. If you’re working, you will most likely be entitled to maternity or paternity pay. Lots of employers offer enhanced maternity terms and conditions above the statutory payments on offer.  

    Maternity Leave

    According to gov.uk, eligible employees can take up to 52 weeks’ maternity leave. The first 26 weeks is known as ‘Ordinary Maternity Leave’, the last 26 weeks as ‘Additional Maternity Leave’.

    The earliest that leave can be taken is 11 weeks before the expected week of childbirth, unless the baby is born early.

    • You’ll get £156.66 a week or 90% of your average weekly earnings (whichever is less) for 39 weeks if you’re employed or have recently stopped working.
    • You can get Maternity Allowance for up to 39 weeks. This means if you take the full 52 weeks Statutory Maternity Leave, your final 13 weeks will be unpaid.

    Self-Employed

    You can get between £27 to £156.66 a week for 39 weeks if you're self-employed. How much you get depends on how many Class 2 National Insurance contributions you've made in the 66 weeks before your baby is due. Find out more about maternity leave and your entitlement here .

    Paternity Leave

    If you’re employed, you may be entitled to two weeks paid time off – find out more here.

    The statutory weekly rate of Paternity Pay is £156.66, or 90% of your average weekly earnings (whichever is lower). Any money you get is paid in the same way as your wages, for example monthly or weekly. Tax and National Insurance will be deducted.

    If you’re self-employed, the bad news is you’re not entitled to a statutory paternity payment. The good news on the other hand is that, if you can afford it, you can take as much time as you like. That’s why a little financial planning can go a long way!

    Plus, if you’re self-employed, you may be due a tax refund which would go a long way to helping you take care of the cost of a baby – find out more in out Tips & Tricks section below. Focus on the due date and put plans in place to help manage your work – and your cash flow. Babies don’t always play ball when it comes to dates and times, so you’ll also need to be flexible.

  • Money saving tips & tricks

    Planning for a baby includes considering how you’ll pay for the things you need, and also affording the time to enjoy this very special moment in your family’s life.

    And the time to do that is before baby gets here. If you haven’t already, use the free baby costs calculator above to work out your baby budget. Once you have a good idea of your budget, you can begin to allocate it. That means being savvy with all of your spending. And for spending read saving…

    1. Get your house in order

    Decorating a nursery can wait! Take a little time to check your household bills, making sure you’re on the right tariff, and see where you can save on groceries. Having another mouth to feed is another good reason to be smart about your supermarket shop. Use comparison sites to get a better deal and think about those subscriptions – there may be a few you can cut back on.

    1. Think about breastfeeding

    It’s your choice, of course, but it’s worth considering that breastfeeding is pretty much free! There’s no expensive formula or feeding equipment to buy. Breastfeeding even for the first few months will save you money at an expensive time.

    1. Try reusable nappies

    Yes disposables are super handy but they’re also super expensive! Reusables are still more cost-effective when you count in the costs of washing and drying. And disposables are terrible for the environment. Do the world and your bank balance a favour and find out more from the nappy experts online – there’s lots of advice out there on the best brands for you.

    1. Ask family and friends

    Perhaps your best source of second-hand goods, family and friends are often incredibly generous when it comes to passing on or selling you the essentials for a good price. Another advantage is that you’ll know the equipment has been well looked after.

    1. Use Facebook Marketplace

    A lot of baby equipment only gets used for a short amount of time so is often in really good nick when a baby outgrows it. Check Facebook or other similar local sites for items such as car seats and clothing bundles.

    1. Find your local parents’ groups

    They know where the good, free and discounted stuff is AND of course you’ll meet lots of new friends who can share support, hints and tips about raising a family.    

    1. Hit the sales

    The big supermarkets often have baby events when they offer bulk buy special deals. And you’ll also find that when new stock comes in, last season’s stuff gets discounted. Fashion changes quickly too so when a new trend comes around, there are bargains to be had. 

    1. Let friends and family buy the toys

    That’s what they’re for! Especially at birthdays and Christmas. Very young babies won’t need too much stimulation so don’t get carried away with all the bells and whistles.  

    1. Shop around

    Use price comparison sites. Check prices online and in store. Use discount codes.

    Search Bumdeal for the best priced nappies for your baby, right now.

    1. Have a clear out

    You can boost your budget – and clear space in your house – by reselling old toys and baby equipment. When your child outgrows a car seat, for example, unless you’re keeping it for the next one (!), think about passing it on or putting it on Facebook – it’s free!

    1. Find out if you’re due a tax refund

    Would a tax refund help?

    An average 4-year tax refund from RIFT comes in at around £3,000. That could be enough to help you take unpaid time from work, make sure the mortgage is paid or help you get through baby’s expensive first year.

    2 out of 3 people don’t know they qualify for a tax refund – check if you do by answering 4 quick questions and start your claim for FREE here.

     

  • How much notice should I get?

    There are some specific laws about redundancy notice, meaning the length of time between them telling you about it and your last day of work for the business. The exact minimum notice period spends on how long you’ve worked there. Here’s how it breaks down:

    • Between a month and 2 years: One week’s notice.
    • Between 2 and 12 years: a week’s notice per year you’ve worked there.

    There’s a cap of 12 week’s notice, meaning they don’t need to give you more time if you’ve worked there over 12 years. However, your contract may say you’re entitled to more, so make sure you check that thoroughly.

    Another thing to check your contract for is any mention of ‘alternative’ notice periods. In some cases, for instance, your employer might offer you pay ‘in lieu’ of notice. That is, you could be offered a lump sum of cash instead of working out your notice. Keep in mind that this isn’t a complete windfall, though. It still counts as taxable income as normal.

    Another term you might hear floating around is ‘gardening leave’. Basically, this just means you’ll continue to get your normal pay throughout your notice period, but you won’t actually have to do any work for it. Technically speaking, you’ll still be an employee during this time, though – and you could actually be called back in to work if your employer needs you unexpectedly.

  • How much redundancy pay can I get?

    If you’ve been in the same job for a minimum of 2 years, you qualify for redundancy pay. You’ll have to apply for it inside 6 months from when your redundancy started, though. There are several factors that play into how much you’ll get, from your age and salary to the length of your time with the company, so let’s talk about those next.

    The first thing to know is that there’s an upper limit to how much your employer needs to pay you. When they work out how long you’ve been in the job, for instance, there’s a 20-year cap on the calculations, and only complete years count toward it:

    • If you were made redundant before the 6th of April 2022, then your weekly redundancy pay’s capped at £544 per week, with a maximum statutory pay of £16,320.
    • If your redundancy came after the date above, your weekly pay cap is £571, with maximum statutory pay of £17,130.

    Again, though, you should always check what your contract says about this. It might turn out that you’re entitled to more.

    Next, your age comes into play. For each week of redundancy pay you’re due (remember each week equates to a year of working in the same job), you can get:

    • Half a week’s pay if you were under 22 years old.
    • A full week’s pay if you were between 22 and 40.
    • A week and a half’s pay if you were at least 41.

    Keep in mind that the redundancy pay you’re entitled to for a given year of work depends on the age you were at the time, not the age you were at redundancy. This means that different years of work could entitle you to different amounts of redundancy pay.

  • How much to save

    With 50% of young people now going to university, a flip of a coin would give you the same chance of your child wishing to go into higher education. To give some perspective on how much that £5,000 a year would’ve cost when you were younger, we’ve roughly worked it out by decade.

    • In 1970, £303 would be the equivalent of £5,000 today
    • In 1980, it would be just under £1,100
    • In 1990, this would rise to just over £2,000

    Depending on when you turned 18, it may be worth asking yourself if you would’ve had these amounts saved.

    Savings through the decades

    Even without university fees, just supporting a child until they reach 18 can cost a significant amount. A study by Child Poverty Action Group found the cost of raising a child to the age of 18 to be over £160,000 for a couple and £193,000 for a lone parent. That works out to be £9,000 a year for couples and £10,750 for a lone parent.

    With the right information, you can help manage your money and plan for the future. If just starting out, we’d suggest watching our How to Save Money in the Bank video that goes into more details on how to save for short, mid and long term life goals.

    It’s really important that we stress that this is a summary of the common scenarios that parents may face and not a definitive list. Often these amounts can differ depending on your personal circumstances. And remember, these are just a few of the options available to you. If you’re ever in doubt, speak to a financial advisor.

  • Here’s some of the extra costs that tend to trip people up:

    • You’ll need a deposit for the new place, which you’ll be able to get back if you stick to the rules of your agreement.
    • Council tax: read our guide, “Council Tax Debt Help: Where Do I Start” for tips on making sure you’re not being overcharged.
    • Service charges, if you’re buying a flat or studio apartment.
    • Weekly food and other shopping costs.
  • How to budget for stamp duty

    Stamp Duty’s a cost that’s all too easy to overlook when you’re sorting out your finances to buy property. Your mortgage lender, for instance, won’t step in to offer extra cash to cover it. This means you’ll have to make your own arrangements, setting aside what you’ll need in advance. While you’re at it, think about the other “hidden” costs of buying a home. Solicitor’s fees, removal bills and so on all need to be taken care of and budgeted for.

    Working out beforehand what you’ll end up paying is absolutely essential here, to avoid some very nasty surprises down the line. You should also put some thought into what you could do to bring some of those costs down. As we’ve already discussed, buying a house that’s worth less than £300,000 as a first-timer means you won’t get lumbered with any Stamp Duty. Beyond that, you could potentially reduce your up-front deposit to help cover your SDLT charge – although you’d probably find it harder to get a good rate from a lender that way. A better approach in general would be to think of Stamp Duty as if it were an extra lump to pay alongside your deposit so you can work it into your budgeting from the start.

    As for the budgeting itself, there are some basic strategies that can pay off pretty reliably. In fact, you should probably be using some of them anyway, just to keep control over your everyday finances. Bringing down any rent you’re paying can be a big help - perhaps by moving to a cheaper place while you save up a deposit, for instance.

    As for basic money management, we’ve talked about the 50/30/20 rule and zero-based budgeting in a few of our other articles, and they’re definitely worth putting into action when you’re planning to buy property. You could also check out our guide, “Easy Ways to Save for a House on a Low Income”, which covers several other options you might want to consider.

    Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • How to calculate stamp duty

    As of 2021/22, the Stamp Duty Land Tax rates on residential properties are:

    Up to £1250,000: 0%
    The next £125,000 (the portion from £125,001 to £250,000): 2%
    The next £675,000 (the portion from £250,001 to £925,000): 5%
    The next £575,000 (the portion from £925,000 to £1.5 million): 10%
    The remaining amount (the portion above £1.5 million): 12%

    So, using an example from the government's own website, the SDLT you'd have to pay on a house worth £295,000 would look like this:

    0% on the first £125,000= £0
    2% on the next £125,000= £2,500
    5% on the final £450,000= £2,250
    Final total= £4,750

    Those are the basic rules that most people need to remember when they’re buying a home. However, there’s some extra help built into the system for first-time buyers.

    If you're covered by that rule, and you're buying a property worth £500,000 or less:

    • You won't have to pay SDLT at all on homes up to £300,000 or on the first £300,000 if it's worth more than that.
    • Even if the property's worth more, you'll only be charged 5% on the portion of the value from £300,001 to £500,000.
  • How do I get a p45?

    Basically, you just need to sit back and wait. Your old boss is legally required to shoot you a P45 after you’ve moved on. Obviously, you won’t have a P45 when you start your first job - but your new employer should sort you out there. When you’re starting PAYE work for the first time, they’ll give you a Starter Checklist to complete. You’ll need to get this done as early as possible so your boss can get your tax code squared away and you can be paid properly. You’ll also end up going through a Starter Checklist if you lose your original copy, because you can’t just get a replacement P45. The same goes if you haven’t had a PAYE job in more than a year, or if you start a second job without giving up your first.

    Assuming this isn’t your first job, and your old boss doesn’t send you a P45, you need to start kicking up a fuss. That means nudging them directly to request your P45 – and doing it repeatedly if necessary until you get your form. They’re breaking the law if they don’t send it, so don’t be afraid to shout out.

    Read our guide: Tax and Your First Job

  • How to make a healthcare tax refund claim

    To be sure your claim's handled properly and effectively, you can have a tax professional get things moving on your behalf, like us at RIFT Tax Refunds. Alternatively, you can kick the process off yourself on the HMRC website.

  • How to save

    Once you know what to expect from your mortgage offer, and what the property you’re buying will cost overall, you can start planning how to save up the rest. Having that specific target in mind will give you a good idea of how long it’ll take to save what you need.

    If you’ve read any of our other articles on winning strategies for savers, then you’ve probably already heard us talk about zero-based budgeting and the 50/30/20 rule. You can get the full details by checking out 4 Fixed Income Saving Strategies – Combine to Win! But here are the basics in brief:

    • Zero-based (or zero-sum) budgets mean working out where every penny of your income’s coming from, and where every penny of it’s being spent, saved or invested.
    • The 50/30/20 rule is a way of dividing your income into needs, wants and savings. 50% goes on essentials, 30% can be blown on “fun stuff” and the remaining 20% is saved.

    Another essential saving tip is to pay down your debts as soon as you can. In the long run, interest on money you owe will almost always stack up faster than on money you save. Over time, your debts get heavier, and can easily end up outweighing the benefits of saving.

    With saving, little and often is usually a stronger strategy than occasionally dumping in larger amounts. See our 12 Everyday Money Saving Hacks article for some tips on how to develop good saving habits. It all mounts up with time.

    You should also consider whether you could cut the costs of any rental deal you’re on. Rent can eat a huge chunk out of your monthly earnings, and can be very painful when you’re trying to save for a house. If you’re living on your own, for instance, you might try looking into a flat-share arrangement instead. If you don’t already know anyone you could team up with, there are flat-sharing websites that can help you out. A variation on this is co-living, where you share things like kitchens and shared spaces in a purpose-built property but still rent your own room.

    The main thing is to keep your expectations realistic and be patient - and remember to celebrate your saving successes! When you’re on a lower income, any saving you do is a definite win. Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

    Free budget planner

  • Instant Access Savings

    Otherwise known as Easy Access accounts, these accounts are great for stashing away money for the short term. As you can usually withdraw from these accounts at a moment's notice and without charge, they come in handy in unexpected circumstances. Broken boiler? Simply transfer the money over to avoid using your credit card. Now we know that building up a safety blanket isn’t easy for some. A 2020 survey by Shelter and YouGov showed that nearly 40% of UK households are a single paycheque away from homelessness. Try your best to put away whatever you can into Instant Access savings. This way you can reduce the impact of unexpected bills. If you ever find yourself dipping into these savings, you may want to build your funds back up to the previous amount to provide some much-needed security.

  • Mid-Term Savings

    Although instant access savings are great for withdrawing money easily, they do come with some downfalls. If the rate of inflation is higher than the rate of interest, your money will lose some of its spending power the longer you leave it there. Let’s say you had £1,000 saved and inflation was higher than interest rates by 3%. If this was true for a year, your money would be worth £30 less. This is where mid-term saving methods come in handy.

    Financial advisors often define mid-term goals as an upcoming expense that will take place between three to ten years from now. This could be a new car, a wedding, a dream holiday or even a first home deposit. If saving for your first home, a Lifetime ISA (or LISA) could be right for you. You can deposit up to a maximum of £4,000 a year with a government boost of 25%. If you deposit the maximum amount in a financial year, you’d end up with £5,000 in total. Even better - any returns that you make from interest are completely tax-free. However, if you were to withdraw for any other reason than buying your first home, retirement or terminal illness you would lose the government boost. If you already own a home or aren’t looking to buy just yet, bonds are often seen as a good option by financial advisors. We’ll go over two types: Fixed-Term Bonds and Government Bonds. Fixed-term bonds, otherwise known as a fixed-rate savings account, works by locking your money away for a set amount of time and paying you a set interest rate for that time. Depending on the bank, you can either choose how long you lock your money away for or they may choose set intervals. 

     

    The perks of these accounts are that the interest rates are often higher than instant access savings and because the interest rate is fixed, you’ll know exactly how much you will earn. However, as the accounts are designed to be fixed-term, you may have to pay a penalty fee if you need to access your money before the agreed time. For this reason, it’s important to only put away money that you know you won’t need for that time. Government bonds, known as gilts in the UK differ slightly from fixed-term bonds. In the case of gilts, your money is loaned to the government in exchange for interest. Governments will often use these loans to finance projects such as infrastructure outside of the taxes they raise. Once your money is given to a government, you will be given a coupon that will pay you a set level of interest at regular intervals. Once the bond reaches its maturity date, your original sum of money known as the principal will be returned to you. For instance, if you invested £5,000 into a 5-year gilt with an annual interest rate of 5%, you’d receive £250 a year for 5 years before receiving your initial £5,000 back. Different bonds have different maturity dates so it’s important to pick an amount of time that you will not require the money back. Although all investments carry some element of risk, established economies are seen as low-risk when compared to other countries. In the case that you did need to get some money back, you can sell your bond on the open market but as with all investments, you can lose money as well as make it.

  • Long-Term Savings

    Long-term goals are anything that you wish to achieve over 10 years from now. The main examples are helping your kids out or retirement. Now, there’s a reason that we’ve not mentioned compound interest so far. This is because it often takes over 10 years to see any notable difference. Put simply, compound interest is when you earn interest on the money that you’ve saved AND on the interest that you’ve earned.  Imagine compound interest as a snowball rolling down a hill. As it collects more snow or interest in this case, the snowball will gradually grow in size. The longer you leave it to collect interest, the bigger your savings will grow. To calculate how long it will take to double your money you can use the Rule of 72. Simply divide 72 by the interest rate. If interest rates are 2% on average, it would take 36 years to double your savings if left untouched. However, in recent years the interest rates of banks have been significantly lower than this - meaning that it would take more than a lifetime to double your savings. 





    Investing in the stock market is often suggested as an alternative for the mid-to-long term. Stock-market investments tend to do better than cash if left long enough to ride out any highs and lows of the market. Typically speaking, this is said to be a minimum of 5 years. Now that is not to say that stocks come without risk. There is a possibility that you could lose the entirety of your investment as well as make a large profit. There are certain types of investing that are said to reduce this element of risk. By spreading your money across a number of markets and industries, something known as diversification, you can reduce the likelihood of your entire investment losing its value. It’s really important that we stress the importance of never investing money that you simply cannot afford to lose. If you do choose to invest, make sure you do it responsibly. And remember, these are just a few of the options available to you. Certain methods of saving are suited for both personal and financial circumstances. So if ever in doubt, speak to a financial advisor.

     

    Read our guide: Are financial advisors worth it?

  • 2023/2024 Income Tax Brackets

    The income tax bands for England and Northern Ireland in 2023/2024 are as follows:

    • Personal Allowance: Up to £12,570 tax-free
    • Basic Rate: £12,571 to £50,270 is taxed at 20%
    • Higher Rate: £50,271 to £150,000 is taxed at 40%
    • Additional Rate: Anything over £150,000 is taxed at 45%

    Scotland and Wales have their own tax bands. Wales generally aligns with England and Northern Ireland, while Scotland has unique rates.

    • Scottish Personal Allowance: Up to £12,570 tax-free
    • Scottish Starter rate: £12,571 - £14,732 is taxed at 19%
    • Scottish Basic Rate: £14,733 - £25,688 is taxed at 20%
    • Scottish Intermediate Rate: £25,689 - £43,662 is taxed at 21%
    • Scottish Higher Rate: £43,663 - £125,140 is taxed at 42%
    • Scottish Top Rate: Anything over £1125,141 is taxed at 47%

    Tax relief allows you to claim refunds for certain work-related expenses. The amount you can claim depends on your expenses and tax band. For claims exceeding £2,500, a Self Assessment tax return may be required.

  • Incorrect tax code

    Tax codes can be tricky business. In an ideal world, your code will let HMRC know of any circumstances affecting the tax you owe, along with how much you can earn tax-free. However, tax codes change over time, and they might not always keep pace with your situation. If your code changes unexpectedly, you can either kick up a fuss with the taxman to find out why or have an expert look into it for you. What you really shouldn’t do, though, is ignore it and assume it’s someone else’s problem to fix. If HMRC agrees there’s a problem with your code for the current tax year, then any refund you’re owed will come through the PAYE system.

    You might get a P800 letter from HMRC for the previous tax year, which will explain how to get any refund you’re owed. They’ll only send one of these out if they already know there’s a problem, though. If you think you should have been sent a P800 but don’t have one, it’s time to contact the taxman and sort it out.

    If your tax problems go back further, you might still be in luck. You can actually claim tax refunds stretching back up to 4 tax years. You’ll need to be pretty sure of your footing, though, so talking to a professional might be a smart move.

    Check your tax code

  • Index funds

    Here’s where things get a little more technical. When it comes to investments, there really is some truth to the old warning about putting all your eggs in one basket. That’s why the trick most advisers recommend is to “diversify” your investing so you’re not betting everything on one horse. The trouble is, unless you’re a stock market professional with some experience in the game, it’s tough to know where to put your money. If you’re new to investment – and even if you’re not – then an index fund might be a good option to look into.

    Index funds are a kind of “mutual” investment you can use to manage your overall risk. Instead of dumping all your cash into a few hand-picked businesses, an index fund tracks a “market index”. It’s like a cross-section of how a particular market’s moving, instead of handcuffing your money to the fortunes of any one company. A “total stock market index fund”, for instance, is designed to track trends within the overall equity market. It’s like owning a bite of the entire market in a single investment, so if you’re looking to sock away a retirement portfolio, it’s a great way of diversifying your investments.

    Index funds have several basic advantages to offer over going fully “hands-on” with your investment choices. For one thing, they can severely cut down the time you spend picking through your individual investments. The portfolio manager of your fund handles a lot of the essential research for you, investing in an index with the kind of stocks you want to put your money into.

    At the same time, you’re diversifying your stocks to help protect your overall investment. Spreading your money around with an index fund means you’re less likely to take big losses if a couple of your investments go bad. Index funds can also be much cheaper than having your own fund manager hand-picking your stocks for you, along with being pretty tax-efficient. Since there’s less buying and selling going on than with an actively managed fund, you won’t be stacking up a load of extra capital gains onto your tax bill.

    Let’s take a look at some of this in action. The Vanguard Growth ETF (exchange traded funds) list tracks the performance of a range of “growth stocks”. These are basically just stocks that are expected to do better than average in their fields, from technology to healthcare. According to Vanguard, this list is ideal if you’re new to the game, because of its lower minimum investment amounts and real-time pricing reports when you buy and sell. It’s a decent balance between having things managed for you and still having control of your transactions.

    With the Standard and Poor’s 500 stock market index (S&P 500), you’re looking at 500 of the most profitable companies in the United States. We’re talking huge names like Apple, Amazon and Microsoft here – companies with long track records of flexing some serious money muscle. Annual returns from the S&P 500 index, as you’d imagine, have historically been strong – around 9% to 10% being fairly typical. Like any other investment, though, things can still go wrong even with world-leading businesses. For instance, in the chaos of the 2007 financial crisis and Great Recession, the S&P 500 dropped 57.7% between October 2007 and March 2009. Even so, it had completely recovered by March 2013. 2020’s COVID-19 pandemic dropped it by half again – but once more it bounced back by the end of the year to hit an all-time high in October 2021. In fact, in the entire history of the S&P 500, no 20-year investment has ever ended up in a loss. As we keep on saying, investment is a long-term game where the real rewards only come with time.

  • Measuring inflation

    The first thing that tends to muddy the water when we talk about inflation is that not everyone measures it the same way. After all, not every price is going up by the same amount at the same time. Depending on which kinds of goods and services you're keeping an eye on, you'll come away with a different idea of how sharply overall prices are going up.

    There's an organisation called the Office for National Statistics that keeps track of inflation (along with a lot of other things). To do this, they pick out a 'basket' of more than 700 things that they reckon a typical buyer will regularly splash out money on. That includes everything from basic essentials like food and transportation to holidays and health costs. By tracking the changes of that make-believe basket from year to year, they work out how much more we're having to pay for them then before. Because it deals with the day-to-day costs of typical people, this way of measuring inflation's called the Consumer Prices Index (CPI).

    Here's where things get a little more complicated. The CPI isn't the only system that's used to work out the overall rate of inflation. The CPIH statistic, for example, includes housing costs for homeowners in its basket as well. There's also another system called the Retail Prices Index (RPI), which uses different goods and methods to come up with its calculations. RPI used to be the main figure people referred to when they talked about inflation, but it's basically been replaced by the CPI now.

  • Inflation rates

    When the rate of inflation hit 10.1% in July 2022, it was treated as a pretty big deal—and if you crunch the actual numbers, it's not difficult to see why. With inflation at 10%, it means you're paying £11 for every tenner you would have spent last year, assuming you're buying the same amount of the same things. That tenner you have in your pocket is therefore worth less than it was the year before, since you can buy less with it. Assume that you're spending £1,000 instead of £10, and suddenly your costs are going up by £100 from one year to the next.

    Because inflation's measured as a percentage, the bigger the purchase the more the price rockets up. In fact, it can still get pretty scary when you work out what all those price bumps on smaller purchases add up to, as well. That's why governments set themselves a target for inflation, aiming to stop it from spiralling out of control. With the inflation target set at 2%, it's then up to the Bank of England to hit the mark. Why 2% instead of 0% or even less? Well, strange as it sounds, having an economy's inflation rate fall too low can actually be a little unhealthy. A negative inflation rate, for instance, would see prices generally dropping over time. A situation like that can actually end up with people slowing down their spending, because they expect costs to be lower if they wait. That makes sense for your personal wallet, but if enough people do it then businesses get into trouble and people can start losing their jobs. Generally, having a low but steady inflation rate is considered healthier for everyone, because it keeps the money flowing through the economy and helps everyone plan out their finances better.

    As for what the Bank of England's got to do with this, they use something called the Bank Rate to influence inflation. Again, this can get a little complicated, but the basic idea is that the Bank Rate is the interest the Bank of England pays to banks and building societies that hold accounts with it. When the Bank Rate goes up, the interest those banks and building societies offer to the rest of us tends to go up too. This encourages people to save more and spend or borrow less (because the interest rates rise on loans as well as savings). In turn, this sucks money out of circulation and generally drags inflation down. Dropping the Bank Rate, on the other hand, encourages people to spend and borrow more instead of saving, which can push inflation rates higher.

  • Why high inflation matters to you

    Obviously, prices rocketing up are a worry for basically everyone. Almost 1 in 6 people who were asked in a survey said that they'd been leaning on credit cards more than usual just to get by while the inflation rate's been high. Over 1 in 5 say they've had to borrow more in a month than they had the year before. When the Bank of England raises its interest rate to try and control inflation, all of that everyday borrowing gets more expensive. The same goes for people paying off mortgages. Higher interest rates mean higher repayments. Close to half the people surveyed said they weren't going to be able to save any money at all in the upcoming 12 months because of skyrocketing prices. With energy costs ramping up by massive amounts, 2 in 5 said they were going to have serious problems paying their gas and electricity bills.

    Looking at the biggest forces pushing prices up throughout 2022, some of the biggest factors are housing and utilities (water and energy), food and drink (non-alcoholic) and transport. Those costs alone are causing over 50% of the rise in the CPIH. For most of us, these are things we really can't afford to cut back on. In budgeting terms, that means a lot of those costs sit in the "essentials" category, which you'd normally want to put about half your household income toward. You can learn more about building a better budget in our article, "Tips to Beat the Rising Cost of Living", which also covers important tips on dealing with debts.

    Guide: Beat The Cost of Living

    Meanwhile, keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.

  • Information you need for a healthcare tax rebate

    It takes the following basic information to process most healthcare tax rebate claims:

    • A list of all the places you've travelled for work
    • Receipts for your expenses if you have them
    • Your contract of employment
    • Copy of your photo ID
    • Proof of address
    • Wage slips
    • Other supporting documents like your MOT certificate, P60 or P45

    You'll also need to set up a personal tax account. It's free and lets you keep tabs on all your key tax details. That includes all information from employers, banks and building societies and other government departments

  • Inheritance Tax

    When someone passes away, Inheritance Tax (IHT) comes into play, but there are thresholds and exemptions to consider. The standard IHT rate is 40%, applicable only if the estate's total value exceeds £325,000. However, certain conditions can reduce or eliminate IHT:

    • Transfers to spouses, civil partners, charities, and amateur sports clubs are exempt from IHT.
    • Passing your home to your children or grandchildren can increase the threshold to £500,000 if your estate is under £2 million. The unused portion can combine with your partner's, potentially reaching £1 million.
    • Gifting assets before death can also affect IHT. If you give away more than £325,000 within seven years before your passing, your beneficiaries might face IHT, but the rate could be lower than 40%. An annual "gift exemption" of £3,000 allows tax-free giving while alive.

    It's crucial to report any inheritance to HMRC, even if IHT doesn't apply. Typically, the estate itself covers IHT expenses, managed by the executor. However, additional taxes may arise from rental income if you inherit a rented property.

    Find out the Inheritance tax hotspots and how high house prices hit even is passing to a child or grandchild.

  • Instalment Credit

    Instalment credit is another system where you make fixed, regular repayments against the amount you’ve borrowed. Your bank or finance company sets the terms and lays out the kind of interest you’ll be racking up on what you owe. You’ll probably find yourself facing penalty charges if you don’t keep up the agreed repayments, but unlike a revolving credit deal you’ll have a clear plan in front of you for paying up. In fact, many people use instalment credit agreement as a way of ‘consolidating’ other debts into a single, simple repayment plan.

  • Insulate your home: save up to £225 a year

    Insulation’s a really important thing to get right if you’re serious about bringing down your heating bills. Up to 40% of your home’s total heat loss goes straight through the walls, with another 25% through the roof. By comparison, windows and doors account for about 20% - and even your floors lose you 10%.

    Of course, insulation’s not cheap, but it does pay off over time. It all depends on your situation. Internal solid wall insulation, for instance, can run you about £7,400 in an average semi-detached house. At a saving of £225 a year, you’re looking at over 30 years before it pays for itself. That said, fitting up to 270mm of loft insulation in a typical semi could only cost you £300, while saving you £150 a year in lost heat and cutting down your annual carbon output by 600kg. Even just insulating under your floorboards could save around £40 per year.

    The point of all this is to realise that your home could well be leaking money unnecessarily. Those leaks could be from dodgy insulation, wasteful energy use or even just sticking with the wrong supplier. Either way, you can take control of it and start bringing your heating bills down. It doesn’t have to involve massive home renovations, either. Even just a few changes in your habits can help.

    Keep safe and warm this winter – and keep checking back here for more tips and updates. Remember – you’re always better off with RIFT.

  • Insurance and VED

    There’s another cost to consider when you’re looking into car mods. Making the right changes to your vehicle can make it more efficient and cheaper to run. It could even qualify you for cheaper insurance. However, a mod can also make your insurance provider a little nervous about the kind of driver you are—and you’ll feel the impact of those nerves in your wallet.

    • The good...

      Generally, insurers like mods that make cars safer or more efficient. Anti-theft mods, anti-roll bars and better brakes can all be good options for keeping your premiums under control.

    • ...and the bad

      Performance-boosting mods like supercharged engines will tend to hike your insurance payments up, along with things like lowered suspension, spoilers and even custom paint jobs. Insurers like safe drivers with cars that aren’t begging to be stolen. Anything that makes you look like a risky option is likely to pump up your premiums.

    Always talk any mods through with your insurance provider before you buy them. The same goes for the DVLA. Since modding your car can alter the VED you have to pay.

  • Intermediate level

    We’re getting into territory where you’ll need more skills, time, and patience. You’ll also need your laptop for most of these intermediate level ideas:

    • Dropshipping

    Dropshipping is a reasonably new way of selling products online. It’s when you take orders from customers - through your website, for example - and another company fulfils that order. You’re not making the products yourself, or having to put in stock orders and then hold that stock until somebody buys it.

    For example, say you want to dropship car accessories - like seat covers. Rather than put an order in for 1,000 seat covers and then have to find 1,000 customers to buy them, you can dropship them. You list the seat covers on a website you’ve set up. You take the order, and send it to the manufacturer, who sends the seat cover to your customer. You charge the customer £10. The manufacturer charges you £5 for the product and £1 for delivery. You pocket £4!

    It’s not quite as easy as it sounds. The manufacturer will supply that same seat cover to other dropshippers - so you’ll need to find a way to stand out. So think about what you want to sell - and who to. Then get on the search engines - you’ll find plenty of manufacturers who dropship, as well as tips to stand out in your niche.

    • Etsy

    Etsy is aimed at crafty types - but you can sell all sorts. For example, you could pay a graphic designer to create a cool t-shirt design, then sell the t-shirts on Etsy for a profit. You don’t even need to invest in tonnes of stock. Once you have your design, you can use print-on-demand services. It’s a similar principle to dropshipping, but takes it one step further - the merchandise doesn’t physically exist until somebody orders it. So when somebody orders your t-shirt design, you send the order to the print house. They print it up and ship it to your customer, and you make a tidy profit. Keep your costs down by sticking to basic black or white t-shirts and you can easily make a £5 to £10 profit per t-shirt.

    Selling on Etsy? Read this

    • Freelancing sites

    Sites like Upwork can be great places to pick up small jobs if you have skills like graphic design, or can write, for example. But there are also loads of simple jobs advertised - like collating spreadsheets - that don’t require pro-level skills. 

    • Fiverr

    Sites like Fiverr are a similar deal. You advertise your skills, people pay for them. It’s less professional than the likes of Upwork. While there are professionals selling their digital skills, there’s also quite a lot of…plain weird stuff up for grabs on Fiverr. Anything you could dream of asking somebody to do on camera, for example - there’s almost certainly somebody on Fiverr willing to do it for money. The point is, if there’s an odd digital skills niche you think you can fill, Fiverr could be the place for you. And while basic skills and products go for $5, hence the name, there’s no limit to what you can upsell people on. That’s how some users have apparently made six-figure sums through the platform.

  • Investment funds and predicted performance

    Finding the best beginner investment fund can be a tricky business if you’re not a money expert. You’re setting out to make your cash work for you, and that’s generally a smart move. On the other hand, when you make an investment you’re taking a calculated risk with your money. You’ve got to go in with your eyes open, and you’ve got to learn to make good decisions. So let’s dig into this a bit.

    The main thing you need to understand is that we’re not talking about dead-cert guarantees here. Any time you’re putting your money into stock or investment funds, the price can go down as well as up. You might feel like you’re dipping your toe in on a fairly safe bet, based on past performance. However, remember that last year’s experience doesn’t necessarily tell you much about next year’s prospects. A lot can happen in that time, and there are loads of unpredictable pressures that can push stock prices up or down.

    Picking your first investment fund is about setting your financial “comfort zone”. We’ve already mentioned the level of risk you’re prepared to take. Beyond that, though, a big part of your decision is going to depend on how quickly you’re hoping to see some returns on your money. Smart investing really isn’t about getting rich fast and cashing out in a hurry. In fact, many advisers will warn you away from volatile investments that can rocket in a heartbeat, then plummet just as fast. Instead, the argument goes, the smart move is to look for a return over a longer term – say 5 years or more. It might not sound so exciting, but a longer-term investment will often help you ride out the kinds of short-term turbulence that can see you making a loss otherwise.

     

  • Pensions

    There’s a lot of good stuff to say about pensions. They’re great for minimising the tax you pay on your savings, and a simple, reliable system to build your retirement plans around. They also give you a lot of room to grow. You can get tax relief on up to £40,000 a year of contributions, or up 100% of your taxable earnings if that’s higher, with a tax-free lifetime limit of £1,073,100.

    It’s already a great deal for most people, since it basically tops up your contributions by £20 for every £80 you pay in. If you pay higher rate tax, you can actually claim even more in a Self Assessment tax return. The very top earners making over £100,000 a year get an extra benefit on top, since they can use their pensions to stop themselves from getting a reduced tax-free Personal Allowance. If you’re making £100,000-£120,000 per year, you can find yourself paying out tax of up to 60%, so it’s important to make the most of opportunities like these. 

    So overall, pensions sound great, right? Well, for the most part, yes. They do come with some drawbacks and limitations, though. The big one is that you really can’t get at your money throughout most of your life. You need to be at least 55 before you can make a withdrawal from you pension pot at all – and that age is set to go up to 57 by 2028. If you’re looking to cash in your investment a little sooner than that, you’re better off examining your other options before going all-in on a pension scheme.

    How earning £100k affects your personal allowance

  • Fixed-Rate ISAs

    Individual Savings Accounts are another popular option that most people never really think of as “investments”. The idea of fixed rate ISAs is pretty simple. They’re tax-free savings accounts that lock your money away for a set period in exchange for a set interest rate. You know what you’re getting, and you know when you’re getting it, so they’re usually considered pretty safe.

    With a Fixed Rate ISA, you’re probably going to score more interest than you’d be offered with an easy-access one where you can take your cash out more freely. They’re easy to manage, too. You open your ISA, with a set limit on how much you can dump into it, then earn monthly or yearly interest on it until the term ends and you get it back out. Generally, the longer you’re putting your savings away, the more you stand to get in interest. When rates are low all over, though, there’s probably not a huge difference.

    Again, these sound like pretty safe, low-hassle investments, right? Again, the answer’s yes – with a few quick words of caution. Your interest rate’s locked in from the outset. That means if rates in general rise, you won’t see the benefit. You’re also at the mercy of inflation. When the rate of inflation’s high and the cost of living’s rising, even top-rate fixed ISAs will struggle to keep the value of your investment.

    ISAs, then, can be great when interest rates are high and inflation’s low, but that’s not always the financial climate you’re looking at and it’s all too easy to see any growth getting swallowed up.

  • Exchange Traded Funds (ETS)

    Now we’re getting into what most people think of when we talk about investing. Exchange Traded Funds are investments that track how a particular industry, commodity or other “index” is performing. It’s like holding a range of smaller investments in a basket with the risks and rewards spread out among them. ETFs are pretty easy to buy and sell whenever you want, just like normal stock. As a “marketable security”, an ETF has a given price attached to it and can be traded on a stock exchange.

    ETF prices can obviously go up or down at any time, so the price you paid to buy in the morning could be different from the one you’d be charged in the afternoon. That’s one of the things that makes them different from other “mutual fund” baskets that can only be bought or s