Things to do before the tax year ends

Most tax allowances reset at the start of each new financial year and if you don’t use them before the deadline, you’re likely to lose them. Reviewing your finances before the tax year ends could help you save money or make better use of the tax benefits available to you.

Use your ISA allowance

Each tax year, you have a £20,000 allowance to put into individual savings accounts (ISAs). You can split the allowance across different types including cash ISAs and stocks and shares ISAs.

The £20,000 allowance means your interest or profit (depending on the ISA) is tax-free. But the ISA allowance works on a use it or lose it basis. Your ISA allowance resets at the start of each tax year and any unused allowance from the previous tax year won’t roll forward.

Now is a good time to make additional contributions before the 5 April deadline if you haven’t used all your allowance.

Top up your pension

You can get tax relief on your private pension contributions that are based on your income tax band. Some employers take pension contributions from your salary before charging tax, which means you pay less tax overall. Or your pension provider claims tax relief from the government and adds it to your pension pot.

For basic rate taxpayers, the tax relief is currently 20%. You may be able to claim additional relief through a Self-Assessment tax return if you’re a higher rate taxpayer.

Pensions help you save in a tax-efficient way for the long term. If you have spare money and you’re comfortable locking it away for your retirement, topping up your pension before the end of the tax year is worth considering.

Now is also a good time to review whether your current pension contributions are likely to provide you with the income you want in retirement. Most pension providers offer forecasts on what you’re likely to receive in retirement to help you plan.

Claim any tax relief you’re entitled to

Some people miss out on tax relief because they either don’t know about it or don't realise they're entitled to it. If you qualify, you may be able to claim tax relief on work-related expenses including:

• working from home
• uniforms, work clothing and tools
• vehicles you use for work
• professional fees and subscriptions
• travel and overnight expenses
• buying other equipment

If you’re a higher rate taxpayer and donate to charity through Gift Aid, you could claim additional tax relief through your tax return. You can claim back the difference between the tax you’ve paid on the donation and what the charity got back.  

Review your expenses and household bills

With the end of the tax year fast approaching, now is a good time to review your budget and expenses to identify where you can make some changes.

Review all your bills and subscriptions and see if you can get better deals elsewhere. Work out how much you’re spending on everyday essentials like food and then use price comparison sites to check if another supermarket sells the same products for less.

Just spending a few hours on your budget could leave you pleasantly surprised with how much you can save, particularly if you haven’t reviewed it for a while.

In a nutshell

Preparing for the end of this tax year and the start of the new one doesn’t have to be complicated or time-consuming. A simple review of your savings, pensions, allowances and expenses can make a big difference to your money.

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