Earnr AI, your new tax assistant, is here. Check it out now!
Stressed by tax?
Get Earnr Pro

Tax Efficiency

[tæks ɪˈfɪʃənsi]



Tax Efficiency is the process of legally reducing the amount of tax to pay. It can be achieved by using certain products and allowances that have tax benefits.

More detail:

Tax Efficiency is the process of legally minimising the amount of tax an individual pays. This is different from tax evasion, where an individual deliberately hides information or misleads HMRC to avoid as much tax as possible.

One way a more tax-efficient outcome can be achieved is to make use of tax-efficient savings and investment products. For example, it is possible to save up to £20,000 in an ISA in the 2023/24 Tax Year. Interest on cash in an ISA is tax-free. If an ISA was not used, tax might have to be paid on some of the Savings Interest earned in a different type of savings account.

Other ways of being tax-efficient include using Pensions and other Allowances.

Tax Efficiency is particularly important for higher earners who fall into the higher tax bands.

The tax-efficient outcome is not the same for every individual. Hiring an Accountant or using a service like the one Earnr provides can help an individual become more tax-efficient, as they can use their expertise to help you through the tax process.

Back to Taxionary

You might also like...

decorative image for a blog

Submit your 22/23 Tax Return Before January 31st

January 31st is the deadline for submitting 2022/23 tax returns. It's a good idea to complete your tax return ahead of this deadline to avoid mistakes and potential penalties. This article shows why its a good idea to submit your tax return early and how Earnr can help you if you are stuck.

Read more
decorative image for a blog

We asked Earnr AI why you should use Earnr…. here’s what it said…

We recently introduced our newest addition to the Earnr team; our AI chat bot, Earnr AI. In this article we put Earnr AI to the test and asked it why you should use Earnr as your tax companion, bookkeeping tool and tax return assistant. Read it's excellent response!

Read more
decorative image for a blog
December 20, 2023
Tax essentials

Why should you submit your tax return over the Christmas period?

The festive period is often thought of as the busiest time of the year with the run up to Christmas and New Year. Whilst this period can feel hectic at times, it can also be seen as the perfect time to complete your tax return. In this article we explain why this Christmas time is the best time to submit your 22/23 tax return.

Read more
Earnr logoDownload earnr