With 6 April 2025 fast approaching, now is the time to optimise your tax position and make the most of available allowances before the end of the 2024/25 tax year.
The Autumn Budget 2024 introduced key changes, affecting income tax, capital gains, pensions, inheritance tax, and business taxes. By taking proactive steps now, you can reduce your tax bill, maximise reliefs, and avoid costly penalties.
This guide covers essential strategies to help you save money and stay compliant—whether you’re an individual taxpayer, landlord, or business owner. Let’s dive in!
📅 Why Year-End Tax Planning Matters
As we approach the end of the 2024/25 tax year, it’s time to optimise your finances before the 6 April 2025 deadline. With changes from the Autumn Budget 2024, proactive tax planning can help you reduce liabilities and take advantage of available reliefs.
💰 Personal Allowances & Reliefs: Maximise Your Tax-Free Income
The Personal Allowance remains at £12,570 for 2025/26, but incomes over £100,000 will see a reduction in their allowance, resulting in a 60% marginal tax rate.
✅ Key Tax-Saving Strategies:
✔ Marriage Allowance: Transfer £1,260 to a basic-rate taxpayer spouse to save £252.
✔ Savings Allowance: Earn up to £1,000 tax-free on interest if you’re a basic-rate taxpayer.
✔ Dividend Allowance: Only £500 is tax-free for 2025/26—plan your dividends wisely!
💡 Tip: If your income exceeds £100,000, pension contributions or charitable donations can reduce your adjusted net income and preserve your Personal Allowance.
📈 ISAs: Grow Your Savings Tax-Free
For 2025/26, the ISA allowance remains £20,000—but use it or lose it!
🔹 Best ISA Options:
💵 Cash ISA – No tax on interest earned.
📊 Stocks & Shares ISA – Tax-free investment growth & dividends.
🏡 Lifetime ISA (LISA) – £4,000 limit + 25% government bonus for first homes or retirement.
💡 Tax Tip: The ISA allowance doesn’t roll over—use it before 6 April 2025 to maximise tax-free savings!
🏡 Inheritance Tax (IHT): Protect Your Wealth
Inheritance Tax (IHT) is 40% on estates over £325,000, but the Residence Nil-Rate Band (RNRB) increases this to £500,000 for homeowners leaving property to direct descendants.
✅ IHT Planning Strategies:
✔ Gift £3,000 annually tax-free to reduce estate value.
✔ Use the 7-Year Rule—gifts older than 7 years are tax-free.
✔ Spousal Transfer—pass assets IHT-free to a spouse or civil partner.
💡 Smart Move: Married couples can combine allowances, creating a £1 million tax-free threshold for their estate.
📉 Capital Gains Tax (CGT): Reduce Tax on Investments & Property Sales
💰 CGT applies when selling assets at a profit. The CGT allowance for 2025/26 is just £3,000—meaning gains above this are taxed at:
🔹 18% for basic-rate taxpayers
🔹 24% for higher-rate taxpayers
✅ Tax-Saving CGT Strategies:
✔ Use Spousal Transfers – Double your CGT exemption to £6,000.
✔ Offset Losses – Reduce taxable gains with investment losses.
✔ Business Asset Disposal Relief – If selling a business, CGT is 10% (rising to 14% from 6 April 2025).
💡 Deadline Alert: Report property sales within 60 days to avoid penalties.
🏡 Property Tax: Plan for Stamp Duty & Rental Income Taxes
🔹 Stamp Duty Land Tax (SDLT) (England & NI)
🏡 0% up to £250,000 (until 31 March 2025).
📈 5-12% for higher property values.
🔹 Tax Considerations for Landlords:
✔ Mortgage Interest Relief: Limited to basic rate (20%).
✔ Rent-a-Room Scheme: Tax-free income up to £7,500/year.
💡 Tip: If you’re buying property soon, check upcoming tax changes to avoid extra costs.
💼 Corporation Tax: Reduce Business Liabilities
🔹 25% rate for profits over £250,000.
🔹 19% rate for small businesses (profits under £50,000).
✅ Tax-Saving Business Strategies:
✔ R&D Tax Relief – SMEs can claim 186% deduction on eligible costs.
✔ Capital Allowances – Claim 100% tax relief on investments up to £1M.
✔ Pension Contributions – Employer contributions reduce taxable profits.
💡 Plan Ahead: Employer pension contributions must be paid before the tax year-end to claim corporation tax relief.
📊 VAT: Stay Compliant & Save on VAT Liabilities
📌 VAT Registration Threshold = £90,000 turnover.
📌 Making Tax Digital (MTD) applies to all VAT-registered businesses.
✅ Best VAT Schemes:
✔ Flat Rate Scheme – Ideal for businesses under £150,000 turnover.
✔ Cash Accounting – Pay VAT only when invoices are paid.
💡 VAT Savings: Check eligibility for zero-rate VAT items, such as energy-efficient equipment.
⚠️ Avoid Tax Penalties: Key Deadlines to Watch
Missing tax deadlines can lead to severe penalties & interest charges!
🚨 Self-Assessment Late Filing:
📆 £100 fine if late by 1 day.
📆 Up to £900 in daily fines after 3 months.
🚨 VAT Late Payment:
📆 2% fine after 15 days, plus daily interest.
EV CARS – HOW TO GET ANOTHER YEAR OF FREE EV TAX
Starting April 2025, all EV’s will be subject to road tax for the 1st time
Even if your Electric Vehicle isn’t due to be taxed until later in the year, you can re-tax it now. By doing this your next renewal won’t be until March 2026, delaying your first payment for an entire year. If your ECV was first registered on or after 1 April 2017, this will apply to you. Click on this link – Visit the Government Vehicle Tax Website
💡 Stay Compliant: File taxes on time & double-check accuracy to avoid unnecessary penalties.
