As the tax year comes to a close on 5 April, it’s a great time to get your finances in order and take advantage of any available tax breaks. Whether you’re employed, self-employed, or have investments, here are some simple year-end tax tips to consider.
- Use Your ISA Allowance
Every tax year, you have an Individual Savings Account (ISA) allowance, which is currently £20,000. Any money you save in an ISA is tax-free, including interest and investment growth. If you haven’t used your full allowance, now’s the time to do so as it doesn’t roll over to the next tax year.
- Maximise Your Pension Contributions
Contributing to your pension is a tax-efficient way to save for the future. You can contribute up to £60,000 a year (or 100% of your earnings, whichever is lower) and receive tax relief. If you’re a higher-rate taxpayer, you could effectively reduce your tax bill by making a pension contribution before the tax year ends.
- Consider Capital Gains Tax Allowance
If you’ve sold assets like shares, property (that’s not your main home), or other investments, you may need to pay Capital Gains Tax (CGT). The annual CGT allowance for the 2024/25 tax year is £6,000. Any gains above this threshold will be taxed, so if you have assets to sell, consider using up your allowance before the new tax year begins.
- Review Your Tax Code
It’s worth checking your tax code to make sure you’re being taxed correctly, especially if you’ve changed jobs or had multiple sources of income during the year. An incorrect tax code could mean you’re paying too much (or too little) tax.
- Claim Work-Related Expenses
If you’re employed and have incurred work-related expenses (such as travel, tools, or uniforms) that your employer hasn’t reimbursed, you may be able to claim tax relief. You can do this through HMRC’s online portal.
- Use Your Marriage Allowance
If you’re married or in a civil partnership and one of you earns less than the Personal Allowance (£12,570), you may be able to transfer £1,260 of your Personal Allowance to your partner. This can reduce their tax bill by up to £252 a year.
- Plan Charitable Donations
If you’ve made charitable donations throughout the year, make sure you’ve claimed Gift Aid where applicable. This allows charities to claim an extra 25% on your donation from the government. If you’re a higher-rate taxpayer, you can also claim additional tax relief on your donations.
Final Thoughts
Taking a few moments to review your finances before the end of the tax year can help you maximise tax savings and ensure you’re not leaving any money on the table. If your situation is complex, consider speaking to a financial advisor or tax professional for personalised advice.
Don’t wait until the last minute — a little planning now can lead to significant savings in the long run.
If you want any further help or guidance please feel free to get in touch with our team for a free initial consultation.