New Tax Year

With the new 2024-25 tax year beginning on 6th April, now is the perfect time to get on the front foot, assess your finances and get your money working hard for you right away.

When the end of the tax year is approaching, financial experts rightly urge people to take control of their tax affairs ahead of the looming deadline.

So why do so many people leave it to the last minute?

What to do at the start of the new Tax Year

Understand your Tax Allowances

Tax-free allowances can change over time, and this new year brings several changes that you might need to be aware of.

If you are aware of how much you can earn before paying income tax and any other allowances you might be eligible for, you can get a clear picture of your overall tax liability and avoid having to pay more than is necessary.

Get Saving

Individual Savings Accounts, also known as ISAs, are a hugely popular and tax-efficient way to save and invest money.

New rules on ISAs have come into effect this year.

Savers are now free to split their ISA allowance across multiple ISAs of the same type. Whereas in the past, you could only contribute to one ISA of a specific type. For example, contribute to a Cash ISA or Stocks and Shares ISA, in a single tax year.

It is important to be aware of these changes so you can maximise your savings throughout the tax year and find ISA options that best align with your goals.

Step up your Pension Saving

Now is a great time to either open a Personal Pension Scheme or increase your contributions if you can afford to do so.

Putting money into a pension scheme is one of the most tax-efficient ways to save for later life. 

You can reduce your income tax liability for the tax-year in a number of ways. Income taxpayers can enjoy 20% tax relief at source on their net pension contributions. Higher and additional rate taxpayers can also claim additional tax relief when completing a tax return.

Reassess your Budget

As your circumstances and priorities evolve over time, the amount of money you have at your disposal can also change.
Perhaps you have:

 Had a pay rise or moved to a better paid job

Had a baby

Taken out a new mortgage

Got married

Assess your income and expenditure so you can get a clear picture of where your money is going and how much you can afford to save or invest elsewhere.

Review and Set Financial Goals

Setting clear objectives can help you stay motivated by hitting your targets throughout the tax year. Doing so will also help you avoid making rash financial decisions that can knock you off course.

Get on top of the paperwork if you are Self-Employed

If you are self-employed, the deadline for filing your tax returns can be a source of panic and anxiety. But that’s often because you might find yourself with little time to assemble and go through all your paperwork.

As the new tax year begins, gather your receipts straight away and make sure you have clear, accessible and organised records of your income and expenditure.

If you do this routinely throughout the tax year, you will thank yourself later on when the time to fill in the tax return arrives. It will make the whole process a lot easier and less time consuming.

Stay up to Date

As we stated earlier, various rules, regulations and tax allowances have been revised for the 2024-25 tax year.

Make sure you are informed and up-to-date with any changes to be sure you are making the best financial decisions and utilising your tax allowances.

An Independent Financial Adviser is a great way to help you stay up to date on the latest changes.