Understanding the law and tax exemptions


Most people have to pay a range of taxes depending on their particular circumstances. However, tax exemption law does allow you to avoid paying some taxes if you fulfil a number of criteria. You can, for instance, get an exemption from paying council tax if you live in certain types of dwelling. The leaflet ‘Council Tax - a guide to your bill’ gives more details about this.

Tax exemption law also allows for some people to avoid paying road tax. You may be exempt if: 

  • You are disabled and meet certain criteria
  • You use a invalid carriage or powered wheelchair
  • You drive a vehicle that was built before 1973
  • You drive an electric vehicle

Note that even though you are using the tax exempt law to avoid paying road tax, you must still display a valid tax disc that is marked as ‘free’ or shows that you are disabled. Checks will still be made about your tax disc, so always ensure this is up-to-date and properly displayed to avoid any fines.

Other forms of tax that you might be exempt from may include inheritance tax if the estate you are looking after has assets below £5,000. In this case no inheritance tax would be due. You can also avoid paying tax under tax exemption law if you are self-employed but earning small amounts of money. You can avoid paying class 2 National Insurance by obtaining a Small Earnings Exception Certificate.

It is important when interpreting all tax exemption law to ensure you fully meet the strict criteria that each tax exemption lays down. If you are in any doubt about your legal position regarding a tax exemption always take legal advice as early as possible. This is important, as if you are later found not to meet the criteria for the tax exemption you are claiming for, HM Revenue & Customs may prosecute you under tax evasion laws.

If you would like to obtain legal advice about tax exemptions, Contact Law can put you in touch with a local specialist tax solicitor free of charge. So, if you have any questions or would like our help in finding local tax solicitors please call us on 0800 1777 162 or complete the web-form above.

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