UK households have been warned to make SEVEN financial moves before midnight as the new tax year and financial year starts. UK savers, households and taxpayers are potentially missing out on thousands of pounds in relief and rebates from HRMC.
There are several easy moves you need to make before the tax year ends and plenty of tax changes that will come in when the new tax year starts tomorrow. We have rounded up what you need to do with your cash before close of play Friday.
Moneybox’s Brian Byrnes said: “The end of the tax year period should be in every savvy saver’s calendar, with time set aside to check that their money is working as hard as it can for them. We can all be guilty of leaving things until the last minute.
READ MORE All the parts of England set for heatwave this weekend with 13 areas hit
“But our research has revealed that those who spend more time managing personal finances, and planning for the future, have boosted their net worth by around £15,000. So, don’t underestimate how much could be gained from following these five simple steps before the end of the tax year on April 5th.”
Use up your ISA allowance
If you’ve got a Lifetime ISA account, you can deposit up to £4,000 every tax year and get £1,000 free from the Government to put toward your first home or retirement. Make sure you use up this allowance before April 6.
You should also check if you’re maximising your pension savings and other tax breaks. Under current tax rules, you can get a 20% tax relief on your private pension contributions. This means it only costs £80 to pay £100 into a pension for basic rate taxpayers and £60 to pay £100 for higher rate taxpayers.
Each tax year, you have an ISA allowance worth £20,000. This can be split between different types of ISAs – for example, cash ISAs, stocks and shares ISAs and Lifetime ISAs. You can only put away £4,000 each tax year into a Lifetime ISA, or £9,000 into a Junior ISA.
If you’re saving into a Junior ISA for your child, this won’t affect your own allowance. The interest earned in an ISA account is tax-free – although do keep in mind you can already earn £1,000 in interest each tax year already if you’re a basic rate 20% taxpayer, due to the personal savings allowance.
Claim tax relief on work expenses
As an employee, you may spend your own money on things that are related to your job. Where this is the case, you may be able to claim tax relief on your expenses. Expenses may include the cost of your train ticket or petrol to visit a supplier; or purchasing stationery or small tools which are used in your job.
Employers will frequently reimburse you for any expenses that you incur, but where such a reimbursement is not forthcoming, you may be able to claim a tax relief.
Claim marriage allowance
Marriage tax allowance allows you to transfer £1,260 of your personal allowance to your spouse or civil partner to cut their yearly tax bill. Your personal allowance is the amount you can earn tax-free each tax year.
For the current 2023/24 tax year, the tax break you can get through marriage tax allowance is worth up to £252 – but claims can also be backdated by four years. This means if you claim for this tax year and backdate four previous tax years, you could get up to £1,256.
But time is ticking if you need to claim back for the 2019/20 tax year. You’ll need to put your claim in before the current tax year ends on April 5, 2024.
Check your tax code
You can find your tax code on your latest payslip, or on your P45 if you have recently quit your job. Gov.uk also has a dedicated webpage when you can see your tax code. To check it online, you will need to register for a government gateway ID – this is free to do.
The most common code for the current tax year is 1257L for people who have one job or pension.
Uniform tax rebate
Thousands of eligible people could be missing out on a simple and effective way to get money back. Martin Lewis recently told his viewers that anyone who washes and repairs their uniform can claim uniform tax. It counts if it’s a simple branded T-shirt, but also covers emergency service personnel, such as police uniforms and healthcare workers.
Those in the armed forces are the only ones who can’t apply as they already qualify for a benefit. The lowest amount you can claim for uniform tax is £60 a year, which is worth £12 a year for a basic 20% rate taxpayer. Higher 40% taxpayers can get £24 a year. He also explained that you can backdate this claim for up to four years, which is useful if you’re close to the end of a tax year as you could end up missing out.
Check your child benefit
Under current rules, you’re eligible for the full amount of Child Benefit if you earn under £50,000 a year. Once you start to earn over this you have to start paying it back through the HICBC. You have to pay back 1% of your Child Benefit payment for every £100 of income you earn above £50,000 a year and if you earn over £60,000, you’ll need to pay back all of it. You have to pay this back through self-assessment.
However, from April 6 the threshold for when you have to start paying the benefit back rises to £60,000. The higher limit is also being increased to £80,000 a year which means you’ll be able to earn up to £80,000 a year before your Child Benefit is completely stopped.
Use up your capital gains tax allowance
The Capital Gains tax-free allowance is being cut from £6,000 to £3,000 from the next tax year. It has already been reduced from £12,300. Capital Gains is a tax on the profit you make when you sell or give away an asset that has increased in value.
You pay Capital Gains on most valuables and personal possessions, not including your car. You can also pay it on any property that isn’t your main home, your main home if you’ve let it out or used it for business, or investments held outside an ISA or pension above the tax-free limit.
