3 Legal Ways to Pay Less Tax in the UK | PayAfterTax.co.uk
Step 3 of 4
Method 1 — Most impactful

Salary sacrifice: reduce taxable income at source

By directing part of your salary into a pension or childcare vouchers before tax is calculated, you shrink the amount HMRC can tax. On a £40,000 salary, increasing pension contributions by 5% saves roughly £800/year in income tax plus National Insurance.

This is completely legal and encouraged by HMRC. Your employer pays less NI too — many will match extra contributions as a result.

Typical saving: £500 – £2,500/year
Method 2 — Fastest to action

Check and correct your tax code with HMRC

If your tax code is wrong, you could be paying hundreds more each month than you should. The most common mistake: an emergency code (ending in W1 or M1) that stays active long after it should have been corrected.

Checking takes 5 minutes via HMRC’s online portal. If you’ve overpaid in the last 4 tax years, they will refund you directly.

Potential refund: up to £4,000 backdated
Method 3 — Ongoing benefit

Claim work-related expenses you’ve been ignoring

HMRC allows deductions for expenses your employer doesn’t reimburse: working from home (up to £312/year), professional subscriptions, uniform maintenance, and business mileage. These can be backdated up to 4 tax years.

Typical claim: £200 – £1,500
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You can do all of this directly with HMRC

Visit gov.uk/income-tax, sign into your Personal Tax Account, and check your code, previous overpayments, and eligible expenses — all in one place. Many workers find unclaimed refunds waiting for them. It’s your money. HMRC will not chase you to take it back.

One last thing most workers miss entirely

There’s a fourth option that works differently — and it’s now the easiest way for UK employees to optimise their tax position in 2026. It takes under 10 minutes to set up.

Show me the final method →

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