UK Tax Tips & Strategies for 2025/26
Expert advice to help you optimise your tax position and make informed financial decisions. Learn about tax traps, allowances, and legitimate ways to reduce your tax liability.
All tax tips are based on current HMRC guidance for the 2025/26 tax year. Tax rules can be complex - always consult with a qualified tax advisor for personalised advice.
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Frequently Asked Questions
What is the 60% tax trap and who does it affect?
The 60% tax trap affects high earners between £100,000 and £125,140. When your income exceeds £100,000, you lose £1 of personal allowance for every £2 of income above this threshold, creating an effective tax rate of 60% on this income band.
How can I avoid the 60% tax trap?
The most effective ways include maximizing pension contributions, investing in EIS/SEIS schemes, using salary sacrifice schemes, and timing income across tax years. These strategies can reduce your adjusted net income below £100,000.
What are the current UK tax rates for 2025/26?
Basic rate: 20% (£12,570 - £50,270), Higher rate: 40% (£50,270 - £125,140), Additional rate: 45% (over £125,140). Scotland has different rates: 19%, 20%, 21%, 42%, 47%.
How much can I contribute to my pension to save tax?
You can contribute up to £60,000 annually to your pension (or 100% of your earnings if less). High earners may face reduced annual allowances. Pension contributions provide tax relief at your marginal rate and reduce your adjusted net income.
What's the difference between EIS and SEIS investments?
EIS offers 30% tax relief on investments up to £1m annually, while SEIS provides 50% relief on up to £200,000. Both schemes also offer capital gains tax exemptions and loss relief. SEIS is for very early-stage companies, while EIS covers slightly more mature startups.