All the things to do before the new tax year
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The end of the tax year is when most people rush to top up their ISAs before the allowance resets, but actually, there’s plenty of other things you could do to shore up your finances.
I’m a self employed sole trader and my accounting year runs in tandem with the tax year, so for me, this is the time of the year when I take stock of how my business is doing.
I’ll chase up stray invoices, do a quick scan of takings and start tallying up my expenses so I can decide whether or not to top up my pension and how much to put in it.
But even salaried workers have things they could be doing, whether that’s reviewing their national insurance contributions or their investments.
With that in mind, here are a few things you should do before the end of the tax year on 5 April.
Top up your ISA
I’ll start with the obvious: you have a £20,000 ISA allowance each year that resets on 6 April.
You can save it all into one ISA, across several ISAs or even split into your Lifetime ISA if you’re eligible.
Whether you go for a cash ISA or a stocks and shares one, everything you save into an ISA is tax free – including any dividends and gains if you’re using it to invest.
If you’re on low income, don’t have much saved or don’t do any investing, an ISA won’t make a huge difference.
But if you’re a high earner, have a lot saved or plan to invest then an ISA can mean huge tax savings.
Read this: Do you really need an ISA?
Use your pension allowance
I don’t personally maximise my pension allowance because it’s only part of my retirement plan.
This is a decision based on my personal circumstances and preferences, so it’s not something for everyone.
But if you have the spare cash and can afford to, and especially if you’re a higher earner, maximising your pension allowance can be well worth it.
It reduces your tax burden in the short term, and will help secure your financial future.
Everyone has a personal allowance of £60,000 a year for private pensions; contributions above £60,000 are liable for additional tax.
You can actually put your entire salary into a pension – although if your salary is less than £60,000 then your pension contribution cap is your salary.
If you’ve had a particularly lucrative year, you can also contribute more than £60,000 into your pension by using up previous years’ allowances through something known as pension carry forward.
Check your National Insurance Contributions
If you’ve had extended periods of low or no income, or have worked abroad, you may not have paid any National Insurance Contributions (NIC) during that time.
If that’s you then it’s worth checking how many full years of NICs you’ve made as it affects how much State Pension you’re eligible for.
It becomes particularly important as you edge closer to retirement age.
Usually you have to have made at least 10 years of contributions to get anything at all.
To get the full amount, you’ll need to have made at least 35 years of full contributions (assuming you’re born after 1953).
Of course if you’re still relatively early in your career, you probably won’t need to do this – the chances are you’ll have made enough contributions by the time you retire.
If you haven’t made enough contributions to get the full State Pension, it may be worth making some voluntary contributions to cover the gaps.
However, you can only backdate payments for the previous six years.
Get tax efficient
The Capital Gains Tax (CGT) allowance has significantly reduced in recent years.
Right now, it’s just £3,000 a year.
For many people it won’t make a difference as CGT is only paid on the sale of things like investment, second homes, property that you rent out, business assets and expensive personal belongings (valued at over £6,000).
But if you do any investing, and in particular if you have a sizeable portfolio, it’s worth making sure they’re in the most tax efficient wrapper, whether that’s a stocks and shares ISA or a pension.
Review your budget
If you’re on a strict budget then April is a good time to review it.
Bills including council tax, water, broadband and mobile phone contracts all usually go up during this month.
This is particularly important if you use a bank account just for these types of expenses and have a standing order in place to cover your monthly outgoings.
Read this: How the 50/30/20 rule can help with money management
Make the most of your marriage
If you’re married or in a civil partnership, you can transfer £1,260 of your Personal Allowance to your partner through what’s known as the Marriage Allowance.
The Personal Allowance here being the £12,570 you’re allowed to earn before you start paying income tax.
The Marriage Allowance is handy for lowering the amount of tax you pay if one of you earns significantly more than the other and it’s something you have to apply for.
However, you can only claim marriage allowance if one of you earns below the Personal Allowance threshold while the other is a basic tax payer.
You cannot claim marriage allowance if either of you is an additional rate payer.
Do something for the kids
Got kids and fancy doing something nice for them?
If they’re under 18, you can open a junior ISA (JISA) for them, which they won’t be able to access until they turn 18.
Just like an adult ISA, the interest and dividend income held in a JISA are tax free.
You only have an annual allowance of £9,000 though, and there are no tax benefits for the parents. So a bit altruistic I guess.
But the one thing that’s worth noting is that in the year your child turns 18, they will be able to save into both a JISA and a normal ISA, which effectively means a £29,000 allowance for that year.
For grown up children, you have an annual allowance of £3,000 for gifting, which can be monetary or otherwise.
This amount is exempted from any inheritance taxes.
This post was originally published in March 2023. It was updated in March 2026.
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