Tax planning for beginners starts with one simple idea: don’t pay more tax than you have to. Every year, thousands of UK workers hand over too much to HMRC – not because they need to, but because they don’t realise what they can claim.

Good tax planning means making sure you're not missing out on tax reliefs or overpaying by mistake. It’s not just for business owners or accountants. If you earn a wage in the UK, it matters to you.

In this guide, you'll get clear, practical tax tips for beginners. We'll show you simple, legal ways to manage your money better and keep more of it where it belongs – in your pocket.

What is tax planning?

Tax planning means organising your finances so you only pay the tax you legally owe. In the UK, this means using the rules to your advantage without breaking them.

Let’s clear something up: tax planning is legal. HMRC even encourages it. The confusion comes from mixing up three very different things:

  • Tax planning: legal, sensible and encouraged.
  • Tax avoidance: bending the rules to reduce tax. Legal, but often under scrutiny.
  • Tax evasion: illegal and risky.

When we talk about tax planning for beginners, we mean the smart, legal steps that help you avoid overpaying. Things like claiming work expenses, topping up your pension, or using your tax-free savings allowance.

Why tax planning matters

Tax planning pays off now, not just later. Learning how to plan your tax doesn’t need to be complicated. A few changes could mean you keep more of your income.

UK tax bands and allowances

Everyone gets a £12,570 Personal Allowance. This is the amount you can earn before paying Income Tax. After that:

  • 20% basic rate up to £50,270
  • 40% higher rate up to £125,140
  • 45% additional rate above that

If you’re not using your full allowance or tipping into a higher band, you're likely paying too much.

Small changes, big savings

  • £20,000 salary: Claiming work expenses could save you over £300
  • £30,000 salary: Using a salary sacrifice pension scheme could cut tax and NICs
  • £40,000 salary: Shifting income or claiming Marriage Allowance could drop you into a lower band

Long-term gain

Tax planning helps you build savings, boost pensions and protect more income over time.

Key UK tax planning areas for workers

Income Tax and personal allowances

If you don’t use your £12,570 personal allowance, you lose it.

  • Use your allowance: Especially if working part-time or between jobs
  • Watch for band jumps: Bonuses or pay rises can push you into a higher tax band
  • Income shifting: Partners can reduce their joint bill by reallocating income or savings

National Insurance Contributions (NICs)

Class 1 NICs apply once earnings pass £12,570:

  • 8% on £12,570-£50,270
  • 2% above that

Cut NICs by:

  • Salary sacrifice schemes (e.g., pensions, cycle-to-work)
  • Pension contributions taken before tax and NICs

National Insurance Calculator

Work-related expenses

If you pay for travel, tools or training, you may be due tax relief. For example:

  • Mileage for work (not commuting)
  • Protective clothing or uniforms
  • Job-relevant courses or equipment

Many people miss these expense claims, but they could help reduce your tax bill and boost your take-home pay.

Pension contributions

Including pensions in your personal tax planning can lead to bigger savings now and in retirement. In 2025/26, you can contribute up to £60,000 (or 100% of earnings) and get tax relief:

  • Basic rate taxpayers: every £80 contributed becomes £100 with relief
  • Salary sacrifice reduces both Income Tax and NICs

ISAs and tax-free savings

ISAs let you save without paying tax on the returns:

  • Up to £20,000 per year across all ISAs
  • Cash ISAs for short-term saving
  • Stocks & Shares ISAs for long-term growth
  • Lifetime ISAs (LISAs) for first homes or retirement with a 25% bonus

Marriage Allowance

If one partner earns below £12,570, you may qualify to transfer part of their allowance:

  • Save up to £252 a year
  • Backdate up to four years for over £1000 in refunds
  • Quick to claim online

Marriage Allowance

Common UK tax planning mistakes workers make

  1. Not claiming work expenses – Missing out on tax relief for uniforms, tools or travel.
  2. Missing pension tax relief – Especially for higher-rate taxpayers who need to claim extra relief.
  3. Ignoring Marriage Allowance – Many couples don’t realise they qualify.
  4. Getting hit with emergency tax – Often triggered by new jobs or multiple jobs.
  5. Not checking your tax code – Wrong codes mean wrong tax.

When to start tax planning (spoiler: now!)

Start now. Don’t wait for deadlines. Waiting until January 31st – the Self Assessment deadline, is too late to make changes that affect how much tax you pay. The UK tax year runs from 6 April to 5 April, so planning ahead puts you in control.

Think about how big life events like a job change, going self-employed or getting married could affect your finances. Building good habits early, like checking your tax situation regularly, means fewer surprises and more money where it belongs — with you.

Red flags: you might be overpaying UK tax

Not sure if tax planning applies to you? These common situations catch out thousands of UK workers every year. If any of the following sound familiar, there’s a good chance you’re overpaying:

  • Changed or held multiple jobs
  • Paid for work costs yourself
  • Never claimed expenses
  • Still on emergency tax
  • Recent relationship change

Stop overpaying HMRC – get your money back

If you’ve paid for work-related costs, you could be owed up to £3,000. RIFT are experts in UK tax law. We’ll help you:

  • Spot overpaid tax
  • Fix wrong tax codes
  • Claim every penny you’re entitled to

If you’re just getting started, think of this as tax planning for beginners. It’s all about taking simple steps that work. Use our tax calculators or talk to us today. We work on a no win, no fee basis – so there’s nothing to lose.