How to save if you've got a large tax bill

Wednesday, 27/08/2014

It has recently been revealed that £22 billion is owed to the government, with the majority (£15 billion) being owed to HM Revenue and Customs (HMRC). This means that there may be a fair few people out there who are currently paying back their underpaid tax in monthly direct debits or trying to get the money together. If you're struggling with the addition of your new monthly direct debit outgoings, there are some great money saving tips this summer that will help you make ends meet until your payment has been made in full.

Take out cash rather than rely on your debit/credit cards

Giving yourself a weekly budget in cash is a great way to stop yourself from making all of the smaller, unnecessary purchases that are all too easy when swiping a card: especially now that we have contactless cards. Seeing your cash supply getting smaller really makes you think about whether that second coffee of the day is worth it!

Consider holidaying in the UK

Whilst many of us would be tempted to spend the quieter moments at work daydreaming about white sand beaches and pina coladas, the reality is that a holiday abroad might not be as achievable when you have a high tax bill. However, if you don't want to keep the kids cooped up all summer, there are some great UK holiday destinations out there. Look into camping in Cornwall or Air B&B accommodations elsewhere on the coast to snap up a bargain this summer.

Have a clear out

eBay is still a brilliant place to sell those unwanted clothes or possessions, but postage can be costly, so it's not as beneficial when selling items that are likely to earn you less than £10. For smaller items that don't seem worth the hassle of eBay, a car boot sale is a great place to go to shift all of those DVDs and books. You might not make a fortune, but children often love playing shop worker and taking the money on your stall, so think of it as a free day out with a bit of profit instead.

Underpayment of tax can simply be as easy as an error in PAYE. To help avoid an unwelcome and unexpected tax bill in the future, make sure that you check your payment position in the future at The The HMRC website

Payday loans are not suitable for, and would be expensive as, a means of longer term borrowing and are not appropriate if you are in financial difficulty.

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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk