The UK tax year ends on 5 April each year. A little planning before this date can help you reduce your tax bill, use valuable allowances, and avoid last-minute stress.
Here’s a simple guide to getting organised before the deadline.
1. Use Your ISA Allowance
Each tax year, you can invest up to £20,000 into ISAs. This allowance doesn’t roll over. You could consider:
- A Cash ISA
- A Stocks & Shares ISA
- A Junior ISA for children
If you don’t use your allowance before 5 April, you lose it. ISAs remain one of the most tax-efficient ways to grow savings, as investments are free from income tax and capital gains tax.
2. Review Pension Contributions
Pension contributions can reduce your taxable income and may give you valuable tax relief. For most people, the annual allowance is £60,000 (subject to earnings and tapering rules). Contributions must be paid before 5 April to count for this tax year.
Making a pension contribution could:
- Reduce higher-rate tax liability
- Help bring income below key thresholds
- Boost long-term retirement savings
If you’re unsure how much you can contribute, guidance from HM Revenue & Customs can clarify the current rules or speak with us.
3. Consider Capital Gains Tax (CGT)
Everyone has an annual Capital Gains Tax exemption. If you’ve sold investments or assets this year, check whether you’ve used it.
Before year end, you might:
- Realise gains within your allowance
- Offset gains with losses
- Transfer assets between spouses to use both allowances
Tax rules can change, so planning ahead is important.
4. Make Use of Inheritance Tax (IHT) Gifting Allowances
You can give away up to £3,000 each tax year free from inheritance tax. If unused, you may be able to carry forward one previous year’s allowance.
Other small gift exemptions may also apply. Regular gifting from surplus income can also be effective, if structured correctly.
5. Dividend and Income Planning (Business Owners)
If you’re a company director or business owner, review:
- Dividend payments
- Salary levels
- Pension contributions from the business
Small adjustments before 5 April can make a significant difference to your overall tax position.
6. Check for Tax Traps
Some common thresholds to watch:
- The £100,000 income level (where personal allowance starts reducing)
- Child Benefit high-income charge
- Pension tapering for very high earners
Even a small pension contribution before year end can sometimes restore lost allowances.
7. Don’t Leave It Too Late
Providers can become very busy in March and early April. ISA transfers, pension contributions, and investment transactions can take time to process.
Starting early gives you more options and reduces the risk of missing deadlines.
Final Thoughts
Tax year end isn’t about rushing into decisions , it’s about making sure you don’t waste valuable allowances.
A short review now could:
- Reduce your tax bill
- Increase long-term savings
- Improve overall financial efficiency
If you’d like help reviewing your position before tax year end, speak with us to ensure everything is structured correctly and in line with current rules.