Find out how to better manage your personal finances as the cost of living crisis follows us into 2023. Photo: getty
Few will be seeing their personal finances end the year in better shape than they started, as the combination of higher mortgage payments, bills, transport and food shopping costs forced many UK households to rethink their budget.
From getting ahead of tax changes to creating a budget you can stick to and paying off debt, here are 10 top tips from Alice Haine, personal finance analyst at DIY investment platform and coaching service Bestinvest, to help put yourself on the best financial footing possible for the new year.
Check your tax code to make sure you aren’t paying too much
Thanks to the raft of tax changes unveiled by Jeremy Hunt in the Autumn statement, the UK is set for a lengthy period under a historically high tax burden.
With the personal allowance and higher rate income tax thresholds now frozen until 2028 and the 45p top rate of income tax set to kick in at £125,140 from April, rather than the current level of £150,000, making sure you are paying the right amount of tax is vital.
Visit www.gov.uk/check-income-tax-current-year to check your tax code and other income details to make sure it is correct for your circumstances.
Read more: 2022: Year in review
Millions of tax codes are wrong every year and it is your responsibility, not your employer’s or HMRC’s, to check it. You might find you have been overpaying tax, or underpaying, with one having a more obvious benefit than the other. This can happen if you change jobs, earn money from more than one source, such as a part-time job or a property portfolio, or have recently retired.
And don’t forget the end of January deadline for filing your self-assessment tax return, or you could face a late filing penalty.
Take note: Checking your code could see you receive a generous rebate, though if you’ve been paying too little you may be out of pocket too.
Get to grips with your tax allowances and save £1,000s
Getting up to speed on all the tax allowances and tax reliefs that apply to you could give your finances a nice little boost. Some people assume the UK’s tax system is far too complex for them to understand, but by not doing their research they are effectively saying no to free money and paying tax on things they don’t need to.
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