Tax Reliefs Can Help With Cost Of Living Crisis

A leading Midlands accountancy firm has shed some light on tax reliefs that businesses and
individuals could make use of in light of chancellor Rishi Sunak’s announcement on May 26.

Claire Lea, director at Prime Accountants Group, said with inflation at a 40-year high, it was important to understand how the £15 billion budgeted by the government will help with the spiralling cost of living.

She said: “We learned from the announcement that the previously-announced energy bill loan has
increased from £200 to £400, to be paid to every household in October.

“In addition, lower income families will receive a one-off payment of £650 and pensioners will
receive £300. A very specific levy was also announced to be targeted at energy firms which will help
fund the increased spending.”

Claire said individuals still have time to claim working from home expenses for the 2021/22 tax year,
which can provide tax relief of up to £125.

Employers can continue to pay their employees £6 per week tax free to reimburse the extra costs associated with home working, provided they are carrying out their duties under ‘homeworking arrangements’ – a tax-effective way for employers to ease the
burden of the rise in living costs for their employees.

Claire added: “If you are able to do so, I’d strongly suggest increasing contributions to your pension schemes, which will definitely provide income tax relief. Where a salary sacrifice arrangement is used, you and your employer can both save National Insurance and can help mitigate the rise in rates.

“However, ensure contributions do not exceed the annual allowance of £40,000, and £4,000 for higher earners.”