Explore your tax relief options outside of ISAs

QAISAs always seem to be the big thing at the end of the tax year, but I’ve already done mine. Are there any other good ways of saving tax before April? YOU’RE right, there can be too much focus on ISAs at the end of the tax year and insufficient attention paid to other ways of saving tax.

With ISAs, especially with interest rates so low, more people should be looking at stocks and shares rather than cash accounts, provided they have sufficient risk appetite to do so.

There’s also a lot to be said for investing in an ISA at the beginning of the tax year to get the tax benefit sooner – or on a monthly basis through the year.

If you are a higher earner, contributing to a pension can be very attractive way to cut your tax bill.

For every £80 you put into a pension plan, the government automatically adds £20 of basic-rate tax relief, giving a total investment of £100. But a higher-rate taxpayer can claim another £20 (normally through their tax return) giving them 40 per cent relief overall.

If you have an employer who will top up your contributions to a workplace pension, this can provide even better value.

Pensions can be very complicated, and some people will be hit by limits on contributions or total pension savings (called the “lifetime allowance”). There is also speculation that the government plans to scrap higher-rate tax relief on pension contributions, so it may well be worth grabbing the 40 per cent relief while you can.

Riskier investments such as Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs) offer further ways to cut your tax bill. Both give 30 per cent income tax relief on the amount you put in, as well as other tax breaks.

Donating to charity can also reduce your tax. With Gift Aid, for example, the charity receives basic-rate relief on your donation, while higher-rate taxpayers can reclaim an equivalent amount of relief through their tax return.