How to Save Tax in the UK: Essential Tax Planning Tips for 2024-25
If you’re looking for ways to save tax in the UK for the 2024-25 tax year, now is the perfect time to review your options. Acting before 5 April 2025 can make a real difference to your tax bill.
We’ve put together this tax-saving checklist, plus some extra strategies to help you keep more of your hard-earned money.
Tax-Saving Checklist for 2024-25
Here are some of the most effective UK tax planning ideas to consider before the tax year ends:
Maximise Your Pension Contributions
Boosting your pension is a great way to save tax. Could you increase your contributions this year?
Use Your Full ISA Allowance
Make sure you’ve used your full £20,000 ISA limit to protect your savings from tax.
Capital Gains Tax (CGT) Planning
Have you used your £3,000 CGT tax-free allowance? Selling assets at the right time can help reduce your bill.
Explore Tax-Efficient Investments
Consider schemes like Enterprise Investment Scheme (EIS) or Venture Capital Trusts (VCT) for potential tax relief.
Inheritance Tax (IHT) Planning
Are you making use of tax-free gift allowances to reduce your future IHT bill?
Review Your Dividends
Managing how and when you take dividends can make a big impact on the amount of tax you pay.
Timing of Salary and Bonuses
Moving income between tax years could help lower your tax bill.
Make Charitable Donations
Gift Aid donations can reduce your taxable income, especially if you’re a higher-rate taxpayer.
Claim Tax-Free Childcare and Other Reliefs
Don’t forget to use all the tax reliefs available to you, like Tax-Free Childcare.
Please also see: https://www.gov.uk/apply-tax-free-interest-on-savings
👉 Need help with any of these tax-saving ideas? Contact us to find out which strategies are right for you.
Avoid the £100,000 Income Trap
If your income is between £100,000 and £125,140 in the 2024-25 tax year, you could face a 60% tax rate. This happens because your personal allowance (£12,570 of tax-free income) is reduced the more you earn over £100,000.
How to reduce your tax if you’re near £100,000:
- Delay bonuses or dividends until after 6 April 2025.
- Make extra charitable donations before the end of the tax year.
These strategies can help lower the amount of income taxed at higher rates.
Employer Pension Contributions: A Smart Tax Move
If you’re a business owner, making pension contributions directly from your company into an employee’s pension pot is a tax-efficient option.
✅ No personal tax charge for the employee.
✅ Corporation tax relief for the company.
Always check with your pension adviser before making changes.
Beat the Employer NIC Increase from April 2025
From 6 April 2025, Employers’ National Insurance (NIC) rises to 15%, and the threshold for paying NIC drops from £9,100 to £5,000 per year.
What does this mean?
Businesses will start paying more NIC, but you might reduce costs by:
- Hiring two part-time staff instead of one full-time employee.
- Staying under the £10,500 NIC allowance if you’re a small business.
💡 Your payroll software should update for these changes automatically, but it’s worth checking.
Don’t Miss Out on Tax Savings
These are just a few of the many ways to save tax before 5 April 2025. The right tax planning could help you reduce your tax bill and keep more of your income.
Why act now?
Many tax-saving opportunities disappear once the tax year ends. Planning early means you won’t miss out.
📞 Get in touch today to book a tax planning review and see how we can help you save tax this year.
Please see another An Accounting Gem blog: https://www.aag-accountants.co.uk/small-company-dividend-strategies-2/
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