📅 End of Tax Year Checklist: What You Should Do Before 5 April 2025
The 2024/25 tax year ends on 5 April 2025 which means there’s still time to make sure you’re not paying more tax than you need to. Acting now could help you make the most of valuable allowances, keep your finances efficient and avoid any surprises later.
Please see: https://www.gov.uk/income-tax-rates
Here’s what to review before the deadline:
✅ Use Your Personal Allowance
Everyone gets a £12,570 tax-free personal allowance. If your income is below this amount, you might be able to bring forward other income – like rental profits, pension income or dividends—to make full use of it.
Earning over £100,000? Your personal allowance starts to reduce, which can lead to an effective tax rate of up to 60%. Pension contributions can help bring your taxable income back down and save you money.
Married or in a civil partnership? If one of you earns under the personal allowance and the other is a basic-rate taxpayer, you could save up to £252 by transferring part of the unused allowance through the Marriage Allowance.
💷 Maximise Your ISA Allowance
You can put up to £20,000 into ISAs this tax year. That’s savings or investments that grow completely tax-free.
💡 Tip: There are rumours that this allowance could be cut from April 2025, so make the most of it while you can.
📈 Make the Most of Pension Contributions
Pensions are still one of the most tax-efficient ways to save. You can contribute up to £60,000 (or 100% of your earnings) with tax relief, and higher earners may also be able to carry forward unused allowances from the last three years.
It’s worth speaking to your pension adviser to check whether you could top up your contributions before 5 April.
There’s also talk that tax relief for higher earners could be reduced in future, so acting now could lock in more generous savings.
📊 Review Dividends & Savings Income
The dividend allowance has dropped to £500, but you might still be able to extract profits from your company tax-efficiently – especially if your total income is under the higher-rate threshold.
Savings interest is tax-free up to:
- £1,000 for basic-rate taxpayers
- £500 for higher-rate taxpayers
Make sure your savings accounts and investments are structured in the most tax-efficient way possible.
💼 Capital Gains & Inheritance Tax Planning
Selling assets soon? The capital gains tax-free allowance is now only £3,000, so consider timing any disposals before the tax year ends to reduce your tax bill.
Want to reduce a future inheritance tax bill? You can give away £3,000 each tax year without it counting towards your estate for IHT purposes. If you didn’t use last year’s allowance, you might be able to carry that forward too.
⏰ Don’t Leave It Too Late
The run-up to the end of the tax year is a great opportunity to tidy up your tax position and make some smart financial moves. If you’re unsure what applies to you, now’s the time to speak to us—we’re here to help you get it right.
📞 Need help making the most of your allowances before 5 April?
Get in touch and let’s make a plan that works for you.
Please see another An Accounting Gem blog: https://www.aag-accountants.co.uk/late-payment-of-taxes/
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