Each tax year, you’re entitled to various tax-free allowances, and if you don’t use them, you lose them. Some key allowances to consider:

• Personal Allowance – the first £12,570 of your income is tax-free. Ensure you’re making full use of it, especially if your income fluctuates.
• Dividend Allowance – if you receive dividend income, the first £500 is tax-free.

Check out our previous blog about tax-efficient director salaries and dividends for more information. 

The Trading Allowance gives £1,000 of tax-free gross income per year from self-employment and the Property Allowance gives £1,000 of tax-free gross income per year from rentals.

If you let a room in your home, up to £7,500 per year can be received tax-free.

There is also a Capital Gains Tax (CGT) Allowance – you can make up to £3,000 in capital gains tax-free before the allowance resets. If you’re planning to sell assets, consider doing so before the new tax year.

Pension contributions benefit from tax relief whether made by you personally or by your employer/limited company. Check out our previous blog about pension contributions for more information.

You can pay voluntary National Insurance contributions to fill gaps in your record to boost your qualifying years that are used to calculate your State Pension entitlement.

As an employee there are a few tax reliefs that can be claimed against your employment income if your employer hasn’t re-imbursed you:

• Professional subscriptions
• Working from home allowance – only where your employer requires you to work from home, not where you choose to
• Business miles travelled in your own vehicle
• Uniform allowance for specific jobs

If you’re self-employed or running a business, ensure you’ve claimed all eligible expenses, including:

• Home office costs
• Business travel and subsistence
• Equipment and software
• Marketing and advertising expenses

Check out our previous blogs about costs you can claim for more information, for influencers here, landlords here and others here.

Purchasing business-related equipment (such as a new laptop, camera, or office furniture) before your business year end means you can deduct the cost from your taxable profits for the current year, speeding up your tax relief.

If one party to the marriage/civil partnership is a basic rate taxpayer and the other has income below the personal allowance, it’s worth considering whether to apply for marriage allowance. This transfers 10% of the non-taxpayer’s personal allowance to their spouse which saves up to £252 in tax.

Many people overpay tax due to incorrect tax codes. If you’ve changed jobs, gone self-employed, or received benefits like a company car, it’s worth checking your tax code via HMRC’s website.

If your interest income is above your personal savings allowance or your dividend income is above the dividend allowance, then you’ll be subject to tax on some of your investment income.

You can invest up to £20,000 in an Individual Savings Account (ISA) each tax year, shielding it from income tax and capital gains tax. If you haven’t maxed out your ISA, consider contributing before 5 April.

The personal savings allowance is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers and £0 for additional rate taxpayers. With interest rates increasing recently, some people will be caught out by this.

If you invest in Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EIS) or Seed Enterprise Investment Schemes (SEIS) then there are tax reliefs available up to certain limits. However, it must be noted that these investments can be risky so speak to your financial advisor.

Taking proactive steps before the tax year end can make a significant difference to your tax bill. If you're unsure about the best strategies for your situation, consult a tax professional to ensure you’re making the most of available allowances and reliefs.

Need help with your tax planning? Get in touch today to maximise your savings before the 5 April deadline!