The UK tax system offers numerous reliefs, allowances, and breaks that can significantly reduce your tax bill — but many people are unaware of what they can claim. This guide covers every major tax relief available and how to make sure you are not paying more than you need to.
Pension Tax Relief
The single most valuable tax relief for most people. When you contribute to a pension, the government adds back the tax you paid on that income:
| Tax Rate | You Pay | Tax Relief Added | Total in Pension |
|---|---|---|---|
| Basic rate (20%) | £80 | £20 | £100 |
| Higher rate (40%) | £60 | £40 | £100 |
| Additional rate (45%) | £55 | £45 | £100 |
How to Claim
- Basic rate relief — added automatically by your pension provider
- Higher/additional rate relief — claimed through Self Assessment or by contacting HMRC
- Salary sacrifice — your employer reduces your gross salary before tax, giving you relief on both income tax and National Insurance
Many higher rate taxpayers miss claiming the extra relief. If you contribute £10,000 gross to a pension and pay 40% tax, you can reclaim £2,000 through Self Assessment.
Read our full pension tax relief guide for details.
Marriage Allowance
If one partner earns less than £12,570 and the other is a basic rate taxpayer, the lower earner can transfer £1,260 of their personal allowance to their partner — saving £252 per year.
You can backdate claims for up to four years, potentially receiving a lump sum of over £1,000.
How to Claim
Apply online at gov.uk/marriage-allowance. See our marriage allowance guide.
Employment Expenses
If you spend your own money on things needed for your job, you may be able to claim tax relief:
| Expense | Relief Available |
|---|---|
| Professional subscriptions and fees | Full amount |
| Tools and equipment for work | Full amount |
| Uniforms, work clothing and laundry | Flat rate or actual cost |
| Working from home (required by employer) | £6/week flat rate or actual costs |
| Travel for work (not commuting) | Mileage rates or actual costs |
How to Claim
- For claims under £2,500 per year, you can use HMRC’s online service (P87 form)
- For larger claims, use Self Assessment
Gift Aid
When you donate to a registered charity with Gift Aid, the charity reclaims basic rate tax (25% on top of your donation), and higher/additional rate taxpayers can reclaim the difference:
| Donation | Charity Receives | Your Extra Relief (Higher Rate) |
|---|---|---|
| £100 | £125 | £25 |
| £500 | £625 | £125 |
| £1,000 | £1,250 | £250 |
Higher and additional rate taxpayers claim their extra relief through Self Assessment.
Capital Gains Tax Annual Exempt Amount
The first £3,000 of capital gains each year (2025/26) is tax-free. This applies across all assets — crypto, shares, property, and other investments.
Use this annually through regular portfolio maintenance — selling investments at a gain within the exemption and reinvesting via your ISA.
Venture Capital Schemes
Tax reliefs for investing in small, high-risk companies:
| Scheme | Income Tax Relief | CGT Exemption | Loss Relief | Annual Limit |
|---|---|---|---|---|
| EIS | 30% of investment | Yes (if held 3+ years) | Yes | £1 million |
| SEIS | 50% of investment | Yes (if held 3+ years) | Yes | £200,000 |
| VCT | 30% of investment | Yes | No | £200,000 |
These are high-risk investments — the tax relief compensates for the possibility of losing your entire investment.
Rent-a-Room Relief
If you rent out a room in your home, the first £7,500 per year of rental income is completely tax-free. This applies to lodgers and platforms like Airbnb (provided it is a room in your main residence, not a separate property).
Trading Allowance
The first £1,000 of trading (self-employment) income is tax-free — you do not need to register for Self Assessment. This covers occasional freelance work, selling at car boot sales, and small side hustles.
Similarly, the first £1,000 of property income (the property allowance) is also tax-free.
Charitable Donations from Your Estate
Leaving at least 10% of your net estate to charity reduces the inheritance tax rate from 40% to 36% on the rest of your estate.
Tax-Free Childcare
For every £8 you pay into a tax-free childcare account, the government adds £2 — up to £2,000 per child per year (£4,000 for disabled children). See our tax-free childcare guide.
Summary: Reliefs You Might Be Missing
| Relief | Potential Annual Saving | How to Claim |
|---|---|---|
| Higher rate pension relief | £100–£10,000+ | Self Assessment |
| Marriage allowance | £252 | Online application |
| Employment expenses | £50–£500+ | P87 or Self Assessment |
| Gift Aid (higher rate) | Varies | Self Assessment |
| Working from home | £62–£125 | P87 online |
| Rent-a-room | Up to £1,500 | Automatic (just keep under £7,500) |
| CGT annual exempt amount | Up to £600 (basic) / £600 (higher) | Use it each year |
| Trading allowance | Up to £200 | Automatic (under £1,000) |
If you are a higher or additional rate taxpayer, filing a Self Assessment return even when you do not strictly need to can be worthwhile to claim reliefs that are otherwise missed.