Tax Rebates

The Best New Year�s Resolution: Review Your Finances

The recession may officially be over, but few of us are really out of the water. Month by month we all feel the pinch of higher utility bills, increased living costs and tighter budgets. The simple fact is that few people have a coherent enough understanding of finance to make serious dents in a deficit (unless it’s easy to spot that £300 a month sushi habit).

Reviewing your tax situation might sound a little boring (isn’t the huge company that pays my wages capable of doing that with their own tax calculator?) but understanding how your paycheque is formed is a great way to begin identifying potential savings.

Get smart and seek out tax breaks. Start a little tax-free saving in the form of an ISA. In early 2010 the annual limits for tax-free ISA savings were raised to £7,500 for under-50 and £10,500 for over.

Check out our salary calculator and see if you could possibly be due a tax refund. For example, working students are generally placed on a higher tax code than necessary. Since they should be paying minimal contributions, a tidy tax refund could be in order. The 2009-2010 tax year saw HMRC switch to a revamped system for distributing tax codes; errors were rife so be sure to check yours.

Review every facet of your finances rigorously. Are you getting the best deal on car insurance? Could you benefit from changing banks? Are you paying too much for your home phone, mobile phone, TV, broadband, house insurance, food shop, etc? Don’t be afraid to make real changes – even the smallest savings add up.