Top 10 Ways to Cut Your Tax Bill in the UK: Expert Financial Adviser Tips

Building wealth is an accomplishment—but retaining and growing it is an entirely different challenge. Taxation, if left unaddressed, can significantly erode your assets. With the top rate of income tax currently sitting at 45% in the UK, a robust tax strategy is just as critical as a strong investment plan.

Working with a financial adviser can ensure your tax strategy is tailored to your personal situation, maximising opportunities to minimise both current and future liabilities. Below, we explore ten practical steps for high earners to reduce their tax burden.

Book a meeting with an adviser today to get personalised guidance on any of the strategies below.

The Value of Tax Planning

If you’re seeking to pay less tax in the UK, tax planning should be a central part of your financial strategy. This involves utilising every available relief, exemption, and allowance to reduce the amount of tax payable—while enhancing your overall investment return.

Partnering with a certified financial adviser can help you stay informed about evolving tax rules and ensure you’re not missing out on valuable tax-saving opportunities. Whether you’re focused on your pension, capital gains, or inheritance planning, having a strategy in place makes all the difference.

Key UK Taxes at a Glance

Before diving into tax-reduction tactics, here’s a quick reminder of some of the core taxes affecting high earners in the UK:

Income Tax: Ranges from 0% to 45%, depending on your income bracket.

Capital Gains Tax (CGT): Between 18% and 24% on gains above the annual allowance of £3,000.

Inheritance Tax (IHT): Charged at 40% on estate values above £325,000.

Understanding how these taxes work is crucial for effective planning. A top-rated independent adviser can help structure your finances accordingly.

When Should You Start Tax Planning?

Ideally, tax planning should be an ongoing process, not just a year-end scramble. Reviewing your strategy early in the calendar year—and again before the 5 April tax year-end—ensures you’re making the most of available allowances.

Most tax reliefs operate on a “use it or lose it” basis, so it’s essential to act before time runs out. To ensure you don’t miss any opportunities, it’s best to book a meeting with an adviser as early as possible.

10 Ways to Reduce Your Tax Bill

1. Preserve Your Personal Income Tax Allowance

Everyone in the UK is entitled to a personal allowance of £12,570. But if your income exceeds £100,000, this allowance is reduced—often eliminated entirely.

One strategy to reclaim your allowance is by making pension contributions, which reduce your taxable income. Working with a financial advisor near me can help you plan tax-efficient pension contributions that also support your long-term retirement goals.

2. Use the Marriage Allowance

Married couples and civil partners may transfer up to 10% of their unused personal allowance to the higher-earning spouse, potentially saving up to £250 annually—and up to £750 if backdated three years.

A certified financial adviser can help determine if you’re eligible and how to apply.

3. Optimise Your Personal Savings Allowance

Depending on your income tax band, you could receive between £500 and £1,000 in savings interest tax-free. Couples can combine their allowances for greater efficiency. A financial adviser can review your savings strategy to make sure you’re not paying unnecessary tax on your interest income.

4. Maximise ISA Contributions

ISAs are one of the simplest and most powerful tax wrappers available. You can contribute up to £20,000 annually, with returns free from income tax, capital gains tax, and dividends tax.

Whether it’s a Stocks & Shares ISA, a Lifetime ISA, or an Innovative Finance ISA, an independent adviser can help structure your portfolio to take full advantage of this allowance.

Ready to get more from your savings? Book a meeting with an adviser to explore your ISA options.

5. Use the Dividends Allowance

From the 2024/25 tax year, you can earn up to £500 in dividends without paying tax. This is particularly useful for business owners or investors in dividend-paying stocks.

A financial advisor can help you restructure how you draw income from your business or investments for optimal tax efficiency.

6. Make Full Use of Pension Contributions

You can contribute up to £40,000 annually into a pension, or more by using carry-forward rules from previous years. Not only does this reduce your taxable income, but it also builds your retirement savings in a tax-advantaged environment.

High earners may face the tapered annual allowance, so consulting an independent financial adviser is essential for tailored pension advice.

Don’t miss out on valuable pension allowances—book a meeting with an adviser to optimise your retirement plan.

7. Plan for Capital Gains Tax

If your assets appreciate in value, gains beyond £3,000 are taxable. Strategies such as asset transfers between spouses and reinvesting into ISAs can help manage liability.

A top financial adviser can also guide you through more advanced approaches, including using EIS or SEIS investments to defer or eliminate CGT entirely.

8. Explore Enterprise Investment Schemes (EIS)

EIS investments offer 30% income tax relief, CGT deferral, and potential IHT exemptions. Ideal for high earners seeking to reduce tax while supporting innovative UK companies, EIS offers a range of reliefs.

As these investments are high-risk, working with a certified adviser is crucial to ensure they align with your risk profile and financial goals.

9. Leverage the Seed Enterprise Investment Scheme (SEIS)

SEIS provides even more generous tax reliefs than EIS, including 50% income tax relief and CGT reinvestment relief. You can now invest up to £200,000 annually into qualifying startups.

An independent financial advisor can help evaluate SEIS opportunities and structure your investments for maximum tax benefit.

10. Consider Venture Capital Trusts (VCTs)

VCTs allow you to invest up to £200,000 per year with 30% upfront income tax relief. Any dividends and capital gains from the VCT are tax-free.

These schemes can be a valuable addition to a diversified, tax-efficient portfolio. Speak with a top-rated independent adviser to assess whether VCTs suit your situation.

Interested in VCTs or early-stage investments? Book a meeting with an adviser for personalised insight.

Final Thoughts

The UK tax system is intricate, and without careful planning, it’s easy to pay more tax than necessary. Whether you’re navigating income tax, capital gains, or pension planning, an effective strategy developed in partnership with a certified financial adviser near me can protect your wealth and help it grow further.

Take control of your tax planning today—book a meeting with an adviser and make the most of this tax year.

Founded in 2017, Fintuity has fast become one of the only digital Independent Financial Advisers (IFA) in the United Kingdom.  Fintuity offers a wide range of financial advisory services including pensions, protection, investments and mortgage advice. The key difference is that as an exclusively digital service, we can offer significant savings and a service that is direct to you and on demand.