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5 Common Mistakes to Avoid Before Tax Year End

As the tax year-end approaches, it’s easy to overlook valuable tax-saving opportunities. Here are five common mistakes to avoid before 5 April. 

1. Missing Your ISA Allowance 

ISAs provide a tax-free wrapper for your savings and investments. For 2024/2025, you can contribute up to £20,000 across all ISAs. 

Why it matters: Unused ISA allowances don’t roll over, so you’ll lose them after 5 April. 

Tip: Set up regular payments to hit the limit or make a lump-sum contribution before the deadline. 

2. Underusing Pension Contributions 

Pensions are highly tax-efficient, with an annual allowance of £60,000 for 2024/2025 (or 100% of your earnings). Unused allowances from the last three years can also be carried forward. 

Why it matters: Pension contributions attract tax relief at your marginal rate, lowering your tax bill. 

Tip: Top up your pension and maximise tax relief before the deadline. Unsure of your limit? Get advice. 

3. Forgetting Capital Gains Tax (CGT) Allowance 

If you sell investments or assets, you can realise up to £3,000 in gains tax-free for 2024/2025. 

Why it matters: Unused CGT allowances don’t carry forward and missed planning can increase future tax bills. 

Tip: Sell assets to use your allowance or transfer them to a spouse to double the exemption. 

4. Skipping Inheritance Tax (IHT) Gifting 

Each tax year, you can gift up to £3,000 free from IHT. If unused, this can roll over one year, allowing up to £6,000. 

Why it matters: Regular gifting reduces your taxable estate and minimises IHT. 

Tip: Use your annual gifting allowance or make smaller tax-free gifts of up to £250 per person. 

5. Leaving It Too Late 

Rushing decisions near the deadline can lead to missed opportunities or errors. Some transactions, like pension top-ups, require processing time. 

Why it matters: Late actions can lead to lost allowances or penalties. 

Tip: Start planning early and work with a financial adviser to avoid last-minute stress. 

Final Thought 

Avoiding these mistakes ensures you make the most of your tax allowances and exemptions. Act now to reduce your liabilities and plan for a stronger financial future. Need help? Contact S4 Financial for expert guidance. 

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