?1. Tax advantaged investments

You can use a special tax break for some types of venture capital scheme; specifically enterprise investment schemes (EISs), seed enterprise investment schemes and social investment tax relief schemes (but not venture capital trusts). These types of investment aren?t readily available, although EISs are the easiest to find.?Investing in an EIS or one of the other schemes qualifies for a flat rate tax relief, which can be carried back to the previous year.

Reduce your tax bill: An example.

Jan?s self-assessment tax bill for 2016/17 is ?15,000, of which ?9,000 has been paid on account on the usual due dates (?4,500 on 31 January 2017 and 31 July 2017). She must pay the balance of ?6,000 no later than 31 January 2018, plus a payment on account for 2017/18 of ?7,500. This will make a total tax bill of ?13,500.

On 20 January 2018 she invests ?10,000 in an EIS fund run by a well-known investment bank. The tax relief given for EISs is 30% of the amount invested. Jan amends her 2016/17 tax return to claim the ?3,000 relief against her 2016/17 tax bill, reducing it to ?12,000. As Jan has already paid ?9,000 on account, the balance remaining is now only ?3,000, while the payment on account for 2017/18 is now ?6,000. This will therefore make a total tax bill of ?9,000 instead.

2. Gift aid

If you?re a higher rate taxpayer you?re entitled to 40% tax relief on gift aid payments. Basic rate tax relief is received as a reduction in the amount you pay, and the remainder comes from a reduction in your tax bill. You can claim the latter as if you made the gift aid payment in the previous year, providing you do it by the self-assessment deadline.

Reduce your tax bill: An example.

Stan was a higher rate taxpayer for 2016/17. His self-assessment tax bill for that year is ?3,000, and he has paid ?2,000 on account. In December 2017 he gives ?800 to charity, i.e. ?1,000 less basic rate tax relief of ?200. He amends his 2016/17 tax return to carry back the gift aid payment. This reduces his self-assessment bill to ?2,800 and thus his payment on account for 2017/18 by ?100. This is a total reduction of ?300 on his 31 January 2018 tax bill.

Tip:?A gift of annual membership to the National Trust, zoo or similar charitable organisation makes a nice Christmas gift, especially as it comes with tax relief for the buyer and the opportunity to carry it back to the previous year to reduce your 31 January payment. You could also pay gift aid payments you intended to make next tax year, to before 31 January 2018, to take advantage of the tax relief carry back option.