Reducing your tax bill legally is about using the reliefs and allowances that HMRC provides. Here are ten proven strategies that work for 2026.
First, maximise your pension contributions. Every £1 you put into a pension saves you at least 20p in tax, or 40p if you are a higher rate taxpayer. Salary sacrifice saves an additional 8% in NI. A higher rate taxpayer putting £10,000 into their pension through salary sacrifice saves £4,800 in tax and NI.
Second, use your ISA allowance. The £20,000 annual ISA allowance means all investment returns — dividends, interest and capital gains — are completely tax-free. Over a lifetime of investing, this can save tens of thousands in tax.
Third, claim marriage allowance if one partner earns under £12,570 and the other is a basic rate taxpayer. This transfers £1,260 of personal allowance, saving £252 per year, and you can backdate it four years for a total saving of £1,260.
Fourth, make gift aid donations. These extend your basic rate band, which is particularly valuable if you are near the higher rate threshold or the £100,000 personal allowance taper.
Fifth, claim work from home allowance. You can claim £6 per week (£312 per year) without evidence if your employer requires you to work from home, saving up to £125 per year.
Sixth, use your trading allowance. The first £1,000 of self-employment or side hustle income is tax-free under the trading allowance.
Seventh, time your income. If you control when you receive income, timing it to fall in a lower-tax year can save thousands.
Eighth, use your capital gains tax allowance. The annual exempt amount is £3,000, and couples can combine theirs for £6,000 of tax-free gains.
Ninth, consider salary sacrifice for benefits like cycle-to-work schemes, electric car schemes, or childcare vouchers. These reduce your taxable income.
Tenth, keep records of all allowable expenses. Many people overpay tax simply because they do not claim expenses they are entitled to.
Use our take-home pay calculator and salary sacrifice calculator to model these strategies.