Getting Ready for Tax Year End

Are you someone who is prepared or panicked by tax year end on the 5th April? Being ready for this moment is important both personally and for your business. Government often begins new tax rules on the 6th April. This means being prepared for these changes is important.

Reviewing our finances, maximise savings, and meet statutory requirements. Whether you are an individual taxpayer, self-employed, or running a business, proactive planning can help you keep you ahead of the game. Here are a couple of tips.

1. Review Your Income and Taxable Gains

Take stock of all income earned and gains realised during the tax year. This includes:

• Employment income: Check your P60 and payslips to confirm the total taxable income.
• Self-employment earnings: Review profits and ensure accurate records of expenses.
• Investments and capital gains: If you've sold shares, property, or other assets, calculate the gains to determine if Capital Gains Tax (CGT) applies.

Understanding your total income and gains will help you confirm your tax liability and assess whether you’ve utilised available allowances.

2. Make the Most of Your Allowances

The UK tax system offers several allowances that can reduce your liability. Before 5th April, ensure you’ve taken full advantage of these:

• Personal Allowance: Up to ￡12,570 of income is tax-free (2024/25 figures).
• Savings Allowance: Basic-rate taxpayers can earn ￡1,000 in interest tax-free; higher-rate taxpayers can earn ￡500.
• Dividend Allowance: The dividend allowance is ￡1,000 for 2024/25; plan dividend withdrawals accordingly.
• Capital Gains Tax Allowance: The annual exemption is ￡3,000. If you’re close to this threshold, consider spreading gains over multiple years.
• Marriage Allowance: Couples can transfer up to ￡1,260 of unused Personal Allowance if one partner earns below the threshold.

3. Contribute to Pension Schemes

Pension contributions are a tax-efficient way to save for retirement. You can contribute up to ￡60,000 per year (or 100% of your earnings, whichever is lower) while benefiting from tax relief.

Higher-rate taxpayers can claim additional relief on contributions, potentially reducing their tax bill. For those near the annual allowance, consider carrying forward unused allowances from the past three tax years.

4. Use Your ISA Allowance

Each tax year, you can save or invest up to ￡20,000 in an Individual Savings Account (ISA) without paying tax on income or gains. Consider topping up your ISA before the deadline to maximise tax-efficient savings. For children, Junior ISAs allow contributions of up to ￡9,000 annually.

Additional Tips for Businesses

• Expenses: Review all deductible expenses to ensure you’re not overpaying tax.
• Investment in equipment: Consider utilising the Annual Investment Allowance (AIA) for equipment purchases.
• Dividends vs. salary: Directors of small companies should review whether dividends or salary is the most tax-efficient way to draw income.

Final Thoughts

As the tax year-end approaches, taking time to review your finances can have significant advantages. By understanding your allowances, maximising tax-efficient strategies, and staying on top of compliance, you can ensure a smooth transition into the new tax year.

Remember, 6th April marks the start of a new tax year—an opportunity to set fresh financial goals and stay ahead.

Taking the first step often be the hardest part, contact us today for a no obligation meeting. Get in touch via [email protected] or +44 7527275684.

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The value of your investment can go down as well as up. You could get back less than you invested. nbsp; Taxation rules can change at any time and are dependent on individual circumstances.

Twelve Wealth Management Limited is an Appointed Representative of and represents only St. Jamess Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority).

SJP APPROVED 26/02/2025