The single person's income tax allowance for the year to 5th April 2008/2009 is £5,435 (2007/2008 - £5,225). If your total income is less than this during the tax year then there's no tax to pay. Neither should you have to pay tax on any interest you've earned on your savings. So if you're on a low income then your bank or building society can provide you with Inland Revenue form R85 to apply for your interest to be paid gross.

Income tax bands 2007-2009

The self-employed can claim business expenses against their income. So make sure you include all possible justifiable business expenses on your self-assessment form. This also applies to capital allowances for expenditure on plant and equipment, including computers and tools, for example, used for your business. Don't forget pension payments either. You may be able to pay further contributions to your pension, which can soak up some unused tax relief.

One other point to remember, if one spouse is a tax payer and the other is not or pays tax at a lower rate it is worth considering switching some investments to take advantage of their unused tax allowances.

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