Posted February 28, 2025

Top Tax Tips for Individuals as We Approach the Tax Year End

Introduction

The current tax year end is rapidly approaching and now is a crucial time to review your financial situation and ensure you’re taking advantage of all available tax allowances and reliefs. At Whitesides Chartered Accountants, we’ve compiled our top tax-saving tips to help you make the most of the remaining weeks before the 5 April.

Why Do You need to Plan for the Tax Year-End

Each tax year brings a new set of allowances and thresholds. Any unused allowances typically expire at the end of the tax year which means that any potential tax savings could be lost forever. A couple of hours spent tax planning now could save you hundreds or even thousands of pounds.

1. Maximise Your ISA Contributions

The ISA allowance for 2024/25 remains at £20,000, and this cannot be carried forward to future years. If you haven’t utilised your full allowance:

Consider topping up your ISA before 5 April
Remember that ISAs offer tax-free growth and income
There are multiple different types of ISAs for you to consider depending on your savings goals, these include Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs
For couples, ensure both partners utilise their allowances for a combined £40,000 tax-efficient savings

Action point: Check your ISA contributions for the current tax year and make any final deposits before the end of the tax year.

2. Review Your Pension Contributions

Pension contributions remain one of the most tax-efficient investments available:

Most individuals can contribute up to £60,000 or 100% of their relevant earnings (whichever is lower) in 2024/25
Higher and additional rate taxpayers benefit from tax relief at their marginal rate
Consider using any unused annual allowance from the previous three tax years through “carry forward” rules
Business owners may benefit from employer pension contributions, which are typically tax-deductible for the company

Action point: Check if you have scope to make additional pension contributions before the tax year ends, particularly if you’re close to a higher tax threshold.

3. Utilise Your Capital Gains Tax Allowance

The Capital Gains Tax (CGT) annual exempt amount was reduced to £3,000 for individuals from April 2023. Consider:

Reviewing your investment portfolio for potential disposals to utilise this year’s exemption
Selling assets showing a gain to make use of your CGT allowance
For married couples, considering transferring assets between spouses to utilise both allowances (these transfers are exempt from CGT)

Action point: Review your investments to identify potential gains that could be realised within your annual exemption.

4. Make the Most of Dividend Allowances

The tax-free dividend allowance is now £500 per year, if you receive dividends:

Consider whether it’s beneficial to bring forward dividend payments to before the tax year end
For family companies, review how profits are extracted and whether the timing of dividends could be optimised
Married couples might benefit from transferring shares between spouses to utilise both dividend allowances

Action point: If you’re a business owner, discuss with your accountant whether declaring dividends before 5 April would be advantageous.

5. Consider Inheritance Tax Planning

While not strictly a year-end consideration, regular IHT planning is important:

Each individual can gift up to £3,000 per tax year free of IHT (and can carry forward one unused previous year’s allowance)
You can make unlimited small gifts of up to £250 per recipient
Consider regular gifts out of excess income, which may be exempt from IHT
Review whether life insurance policies are written in trust

Action point: If you haven’t used your annual gift allowance, consider whether making gifts before 5 April aligns with your estate planning goals

6. Review Marriage Allowance Eligibility

The Marriage Allowance allows a spouse or civil partner who earns below the personal allowance threshold to transfer up to 10% of their personal allowance to their partner, potentially saving up to £252 in tax.

Action point: Check if you’re eligible and haven’t yet claimed this relief for the current or previous years (claims can be backdated up to four years).

7. Charitable Donations and Gift Aid

Making charitable donations before the tax year end can provide immediate tax relief:

Donations via Gift Aid effectively extend your basic rate tax band
Higher and additional rate taxpayers can claim additional tax relief on their donations
Consider bringing forward planned donations to before 5 April to benefit from tax relief sooner

Action point: If you’re a higher rate taxpayer close to the threshold, charitable giving before the tax year end could reduce your tax liability.

8. Check Your Tax Code

While not specifically a year-end tip, reviewing your tax code is always worthwhile:

Incorrect tax codes can lead to overpaying tax
Multiple jobs or pension income often cause tax code errors
Ensure allowances and deductions are correctly reflected

Action point: Check your current tax code and contact HMRC if you believe it’s incorrect.

How We Can Help

At Whitesides Chartered Accountants, we specialise in providing personalised tax planning advice to individuals. Our expertise can help you:

Review your specific circumstances to identify all available tax-saving opportunities
Develop a comprehensive year-end tax planning strategy
Ensure full compliance while minimising your tax liability
Plan effectively for the upcoming tax year