The 2024/25 tax year ends on Saturday 5 April 2025. Many tax allowances work on a "use it or lose it" basis. If you don't use them by 5 April, they are gone.
This checklist covers the main things to look at in the next three weeks. Not all of them will apply to you.
For everyone
Use your ISA allowance. You can put up to £20,000 into ISAs this tax year. Any interest, dividends or gains inside an ISA are tax free.
Pay into your pension. Your own contributions get tax relief up to the amount you earn, or £3,600 a year if you earn less than that. Separately, total pension savings, including your employer's, are limited by the annual allowance, usually £60,000. You may be able to carry forward unused allowance from the last three tax years.
Check if your income is just over £100,000. HMRC uses your adjusted net income for this test. Above £100,000, you lose £1 of your personal allowance for every £2 of income. A pension contribution or a Gift Aid donation can reduce your adjusted net income and restore the allowance.
Check the Child Benefit charge. If your income is over £60,000 and you or your partner get Child Benefit, you may have to pay some of it back. Pension contributions can reduce this too.
Claim Marriage Allowance. If you are married or in a civil partnership, one of you earns less than £12,570 and the other is a basic rate taxpayer, you can transfer £1,260 of personal allowance. This one does not end on 5 April: you can backdate a claim for up to four years.
Use your Capital Gains Tax allowance. The first £3,000 of gains this year is tax free. If you plan to sell shares or other assets, think about the timing.
For business owners
Company directors: review your dividends. Dividends paid by 5 April use this year's tax bands and your £500 dividend allowance. Check how much of your basic rate band you have left before you take more.
Selling your business? Check the timing. Business Asset Disposal Relief is charged at 10% on disposals before 6 April 2025. From 6 April 2025 the rate rises to 14%, and to 18% from April 2026. Special rules apply where a contract is signed before a rate change but completes after it, so take advice before you sign.
Sole traders: plan equipment purchases. If your accounts run to 5 April, buying equipment you need before then can bring the tax relief forward by a year. How this works depends on whether you use the cash basis or traditional accounts. Only buy what the business needs.
Employers: get payroll ready. Employer National Insurance rises to 15% on 6 April 2025 and starts at £5,000 of pay. See our earlier posts on what this costs and how to manage it.
Holiday let owners: know what is ending. For individual owners, the special tax rules for furnished holiday lets end on 5 April 2025. For companies they end on 31 March 2025. After that, these lets are taxed like other rental property.
Summary
You have until 5 April 2025 to use this year's allowances. The main ones are ISAs, pensions and the Capital Gains Tax allowance. Business owners should also check dividends, any sale plans and payroll for April.
If you would like us to go through your position before 5 April, book a call or contact us.