Ten tips to drive your bill down: Common sense and inside knowledge can save tax. Sue Fieldman steps through the maze

WILLIAM PITT introduced income tax in 1799 - it was a simple little tax of 10 pence in the pound to pay for the Napoleonic Wars. Now, nearly 200 years later, we are taxed from the moment we get out of bed in the morning.

There is income tax on your income, VAT on your spending, council tax on your home, and capital gains tax on your assets.

National Insurance is also in reality a tax, and don't forget the excise duty on wine, spirits and tobacco.

Buy a house and there is stamp duty to pay, drive a car and you have road tax, take out insurance and from 1 October there is insurance premium tax. If you fly off on holiday to escape the tax regime, there is a new air passenger duty.

You cannot even die in peace. Inheritance tax comes back to haunt you and your family.

The tax system is supposed to be getting simpler. User-friendly tax returns have been designed to encourage us to reveal all. And from 1996/7, taxpayers who receive returns can work out their own income tax and capital gains tax, instead of the Inland Revenue making the first move.

But there is a path through the tax jungle. All you need is some common sense and a bit of insider knowledge.

Everyone can save tax, even if your tax affairs are straightforward and you do not have to complete a tax return.

Michael Norrie, a chartered accountant from Tonbridge, Kent, advises employees to keep an eagle eye on their coding notice. Recent Budget changes have complicated pay-as-you-earn codings. As a result many codes issued for 1994/5 are incorrect.

Liz Cohen, tax partner with the solicitors Nabarro Nathanson, advocates a little matrimonial harmony to keep the taxman from the door. She says there is now no tax advantage in divorce or separation.

Tax planning may be peopled by accountants and solicitors, but it is not all doom and gloom. You can even get some light-hearted relief in the tax-saving process.

TEN TAX TIPS

SPICE up your domestic life and take in a lodger. If you let out furnished rooms in your main home, the first pounds 3,250 of gross income in the tax year is wholly tax-free.

BUY some fine wines, and enjoy a liquid asset with tax appeal.

If an asset increases in value you may have to pay capital gains tax if you sell it. But everyone has a yearly tax-free amount of gains. It is currently pounds 5,800.

If your wines appreciate in value, you can sell them and not pay any tax on the gain, provided of course that the wines were bought for your own use and not with a view to trading or making gains.

A spouse also has the same annual exempt amount. A married couple could really indulge their wine whims - all in the name of tax planning, of course.

IF you are going skiing next winter, then consider flying to a European Union airport rather than to a Swiss one.

Many French skiing holidays are based on Geneva airport. The new air passenger duty will be pounds 10 if you fly to Geneva, but only pounds 5 if you fly to Lyons in France.

ASK your employer for a loan. Under the rules introduced by the November 1993 Budget your employer can lend you up to pounds 5,000 and no taxable benefit arises.

IF you did not pre-pay your VAT on fuel before 1 April 1994, it is still worthwhile considering a pre-payment just before 1 April 1995. You will then not have to pay the rise in VAT from 8 per cent to 17.5 per cent that will be levied on fuel bills after that date.

A HUSBAND and wife can save hundreds of pounds of income tax if they make sure that they each use their basic personal allowance ( pounds 3,445).

OBTAIN a copy of your P11D - the return of benefits in kind statement - from your employer. There is no obligation on your employer to give you a copy, but without it you are not in full possession of your detailed taxable earnings for the year.

DON'T waste your children's tax allowance. All children from the day they are born have their own personal tax allowance ( pounds 3,445).

If you open a building society account for them make sure you ask for a Form R85 to allow interest to be paid without tax being deducted.

You can even use your children to save tax for you. If a parent gives money to a child and it does not generate more than pounds 100 a year income, then it will not be included in the parent's taxable income.

MAKE a will. A simple will costs about pounds 50, but could save your family thousands of pounds of inheritance tax if it is drafted properly.

REMEMBER to send in your tax return before the 31 October deadline. Otherwise, you might suffer some painful penalties.