The tax year end of 5 April 2025 is fast approaching and there may be some steps you can take to maximise available allowances and to potentially save yourself some tax.

Capital Gains Tax (CGT) Allowance

Use up your annual CGT allowance. For the 2024/25 tax year, this stands at £3,000. Realising gains within this allowance can be a tax-efficient way to manage investments.

Pension Contributions

Review your pension contributions to make the most of the tax relief available. You can contribute up to 100% of your annual earnings or £60,000, whichever is lower. Remember, contributing to your pension can also reduce your overall taxable income.

Rent a room relief 

This provides an allowance to cover rents of up to £7,500 a year. This means you can rent out a room in your main residence for up to £144 a week and not be subject to income tax. The allowance is split between couples and if your income exceeds £7,500 then normal income tax rates apply. If you claim the allowance then deducting expenses is not applicable. 

Marriage Allowance

If you are married or in a civil partnership, look to see whether you or your partner can claim the marriage allowance. This is where the lower earners income must be below the personal allowance (currently £12,570) and the higher earner is a basic rate taxpayer. The lower earner can transfer £1,260 of their personal allowance to the higher earner which will save £252 a year in tax. The claim can be backdated up to 4 years.

Maximise Contributions to an ISA

Ensure you’ve fully utilised your annual ISA allowance of £20,000. This can be split across different types of ISAs, including Cash ISAs and Stocks and Shares ISAs. 

Charitable Donations

If you make charitable donations, doing so under Gift Aid can increase the value of your donation and provide you with tax relief if you are a higher or additional rate taxpayer.

High Income Child Benefit charge

If you, or your partner, receive Child Benefit, and you have income higher than £60,000, then the High Income Child Benefit Charge kicks in. The term partner refers to spouse, civil partner, and can include someone you live with as if you’re married.

HIBC takes back Child Benefit is recovered on a sliding scale on income over £60,000. If your income is over £80,000 you must repay it all. 

If your income is above £60,000 then it’s your responsibility to notify HMRC, and declare this in a tax return, so that some of the benefit payment can be recouped. If you, and your partner, are both above the threshold, then it is the responsibility of whoever has the higher income to notify HMRC.

Where applicable, consider making additional pension contributions before the end of the tax year as this will bring down your income or perhaps delay receiving dividends (if you have a Limited Company) until the new tax year. You can also reduce your taxable income by making charitable donations under Gift Aid. 

Capital allowances

If you are a sole trader, capital allowances are available to claim at 100% for most plant and equipment so consider making any large investments in equipment before the tax year-end to be eligible for the relief.