End of Tax Year Checklist

Amazingly we’re already more than half way through February, which means the end of the tax year is fast approaching.  For those not as familiar with the way the UK financial year is structured, that means 5 April 2025, with the new tax year starting on 6 April 2025.  This year that falls on a weekend, meaning the last working day of the tax year is actually Friday 4 April, so bear that in mind if you  have anything you have been saving until the last minute.  In this article I will put together a brief end of tax year checklist for you to use to remind you of things you need to do before that deadline.

If you’re interested in a bit more detail about the dates of the tax year and the filing requirements, this page from pwc has quite a lot of information.

Individual Savings Accounts

Probably the  most obvious entry on the End of Tax Year Checklist is your Individual Savings Account (ISA) allowance.  This is a savings allowance of £20,000 which you can place into a cash ISA (like a normal saving account, but tax free) or an investment ISA (where your investments can then grow without incurring capital gains tax or income tax).  Importantly, this allowance is a “use it or lose it” opportunity, so if you don’t pay into your ISA before the end of the  tax year the allowance is gone permanently.

A little trick that can be used involved the use of Flexible ISAs.  These are ISAs which allow you to withdraw and replace the contents at a convenient time.  In practice, this means that as long as you have the  funds in the account when the tax year ends, you can otherwise withdraw the funds and use them for other purposes.  In practical terms, this means that if you have £50,000 in a Flexible ISA now and haven’t used your allowance for the 2024/25 tax year, you can make a payment into the ISA of £20,000 on 3 April and then make a withdrawal of £20,000 on 7 April.  This will still leave you with £50,000 in the ISA, but you will have “banked” the allowance and will have a cumulative allowance of £40,000 to use in  the 2025/26 tax year.  This trick is most effective near the end of the tax year, so it’s a perfect opportunity to see if you have a Flexible ISA, even if you are not currently in the position to make the full contribution for the long term.

Remember that your children also have ISA allowances – Junior ISAs for the under 18s and the full adult cash ISA allowance from age 16 (they can also access the full adult investment ISA from age 18).

Pensions

Pension allowances are less strictly tied to the tax year because of the opportunity to carry forward unused allowances for up to 3 tax years.  This means that it is now less common for the end of the tax year to be a vital deadline for pension savers, but it is still a deadline, as it is the time at which your allowance from 3 tax years ago will expire if you do nothing else.  For most people this will be unimportant, but if you have missed out on saving for a few years and would like to catch up, this can be a lost opportunity that you might want to consider making use of.

Pension allowances can get very complicated in years where you have high earnings, so if you are in a position where you want to make use of previous allowances, it is worth getting in touch with a financial adviser or accountant to ensure that you aren’t subject to a tapered reduction in your allowance.

Again, your children have pension allowances, though if they are not earning they will be limited to the statutory contribution of £3,600 gross (£2,880 net) each year.

Capital Gains Tax

This is not an allowance in the same sense as the ISA and pension allowances listed above, but is still important for some people.  Every year we all have a capital gains tax allowance, which is an amount of gain we are allowed to make before capital gains tax is due (similar to the personal allowance for income tax).  This allowance can be used if you are holding taxable investments with a significant amount of accrued gains that haven’t yet been realised.  If so, you can sell your assets before the end of the tax year in order to trigger the capital gains tax calculation and use your allowance. 

Please note that you must not repurchase the same asset within 30 days, as doing so will treat the new purchase as a continuation of the old purchase.

Conclusion

There’s plenty to do at the end of the tax year, but there’s also still plenty of time in which to do it.