The 2024/25 tax year is coming to an end soon, so here’s a quick rundown of some things you might want to do before 5th April.
Consider Using Your Annual ISA Allowance
The current annual Individual Savings Account (ISA) allowance is £20,000, and this can be split across different types of ISA. The £20,000 allowance is the total amount you can pay into your ISAs, not the limit for each individual account.
If you want to take advantage of the current tax year’s ISA allowance, you need to make any payments into your ISAs before midnight on Saturday 5th April 2025. Any unused allowance will not be carried over to the next tax year.
Consider Using Your Capital Gains Allowance
In simple terms, Capital Gains Tax (CGT) is a tax paid on profits you make from selling assets that have increased in value.
Your CGT allowance is the amount of profit you are allowed to make before you need to pay any tax on it. The current CGT allowance for the 2024/25 tax year is £3,000, and this cannot be carried over year-to-year.
Therefore, if you have a few valuables you’d like to sell, it can be worth spreading the sale of these across different tax years so that you’re really making the most of that tax-free allowance.
You can find out more about CGT with our online tax mini-course, which also delves into national insurance, income tax, and the circumstances that affect them.
Check Your Tax Code
It’s important to make sure you have the right tax code for the upcoming tax year as well as the period just gone as this means you can resolve any issues quickly and pay the right amount of tax. Places to check your tax code:
Your P60, which is a statement showing the income tax and national insurance contributions you have paid over the tax year
- Online by clicking here
- On the HMRC app, which you can download by clicking here
- On your payslip
- A ‘tax code notice’ letter which should be sent by HMRC if your tax code changes
You should check the new tax code applied to you from 6th April and if you think your tax code might be wrong, contact HMRC to let them know.
Review Your State Pension Contributions
To get the full new State Pension of £221.20 a week, you usually need at least 35 years of qualifying National Insurance. You gain qualifying years from working and paying National Insurance, making voluntary payments, or by claiming certain benefits.
5th April 2025 is the final deadline to check and pay for any missing National Insurance contributions going back to 2006. Paying for these may add more to your pension than what you actually spend filling in these missing years. After the new tax year, you will only be able to make National Insurance contributions for the previous 6 tax years.
You can check your National Insurance record here.
Decide Whether to Top Up Your Pension
Your pensions annual allowance is the maximum amount you can put in your pension pots in a tax year before you have to pay tax. This tax free allowance is £60,000 for the 2024/25 tax year.
However, unlike the other annual allowances mentioned on this blog, there is some leeway in terms of carrying the pensions annual allowance over from one year to another. You will not be taxed on pension savings over your annual allowance if you have enough unused annual allowance from the 3 previous tax years to carry forward.
You can find out more information about carrying forward unused annual allowances, and any restrictions, here.
Consider Using Your Gift Allowance
Each tax year, you can give away a total of £3,000 worth of gifts without them being added to the value of your estate.
You can carry any unused annual exemption over to the next year, but only for one tax year. This means 5thApril 2025 is the deadline for using any unused annual exemption from 2023/24.
You can find out more about this here.