Taxes, unfortunately, are unavoidable and yet there are lots of ways to cut tax for single people.
From council tax reductions to being clever with your savings, and renting out a spare room, here CashLady looks at how to cut taxes and earn more money tax-free when your finances are completely your own.
Reduced council tax for single people
Single person discount
Council tax is charged on the basis of two adults living in one property and so an annual discount of 25% is offered to people living alone.
This saving is substantial, amounting to an average of around £400 per year for a single person.
And it’s not just single people who are eligible for the discount. You may also qualify if you live with someone who is:
- apprentice studying for a recognised qualification
- a young person (under 25) in approved training
- a full-time student (attending university or college, or under the age of 20 and studying A-levels or their equivalent)
- an 18 or 19-year-old in full-time education
- a student nurse
- resident hospital patients
- people living in care homes
- people who are severely mentally impaired
- people staying in hostels or night shelters
- carers (providing at least 35 hours’ care a week) if they are not the main resident’s husband, wife or civil partner
- monks and nuns
- members of visiting forces
- individuals with diplomatic privileges and immunities.
What to do if you are entitled to a single person’s discount
If you believe that you are due a single person’s discount on your council tax, then in the first instance contact your local council where you pay your tax.
According to Which, the council can ask you for supporting evidence and has two months to decide whether you are eligible.
You may then be entitled to a rebate on previous year’s tax too.
If you disagree with the council’s verdict, you can appeal to a valuation tribunal. For the address of the tribunal, visit the Valuation Tribunal Service website.
Council Tax Reduction for low-income earners
If you’re single and on a low income then you may be eligible for an even larger discount on your council tax, in some cases a whopping 100%.
Council Tax Reduction (CTR) is paid as a rebate on your council tax bill and has been designed to help people with low incomes and little savings, who are struggling to pay their council tax.
Each local authority has different criteria for who is eligible to claim Council Tax Reduction. The size of the rebate given to you depends on your circumstances, such as:
- whether you live alone or with other adults in the same property.
Apply on the Government website here.
Renting out a spare room to save on tax for single people
Boost your tax-free income by renting a spare room in your house for up to an extra £7,500 each year, tax-free.
The Government ‘rent a room scheme,’ lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home.
This amount is halved if you share the income with your partner or someone else and so if you are single then that tax-free income is all yours.
Take advantage of tax-free savings
Saving is important when you are single and don’t have a partner to fall back on in case of financial emergency.
Ensure that you get the most for your savings by swatting up on tax-free saving and considering an Isa.
This April saw the amount you can save into an Individual Savings Account (Isa) rise from £15,240 to £20,000– its highest level ever.
There was also the launch of a Lifetime Isa (Lisa), helping young people save for their retirement or to buy a home.
The Lisa is for people aged 18 – 40 who will be able to save up to £4,000 a year and receive a government bonus of 25 percent.