Tax Year End

The daffodils are out, the birds are singing, and HMRC is eagerly awaiting our annual contribution to the nation's coffers. Yes, it's that most wonderful time of the year - tax year end! In this edition, I look at how to make the most of your allowances before they expire, and why some people leave everything to the last minute (you know who you are).

Market Commentary

Markets continue their alternately optimistic / pessimistic dance with reality, while central banks play "will they, won't they" with interest rates and President Trump does the same with tariffs.

The Annual Tax Sprint

There are two types of people in this world: those who've already sorted their tax affairs, and those who think April 5th is "ages away." If you're in the second group, you're probably the same person who starts Christmas shopping on December 24th.

Let's look at what needs attention:

ISAs - Use it or Lose it

The ISA allowance remains at £20,000. This is rather like having a voucher for a free meal at a high-end restaurant - you wouldn't throw it away, would you? Yet every year, people leave their ISA allowance untouched, perhaps saving it for a special occasion that never comes; if you are one of these people then at least put some into a cash ISA at this late stage.

Pension Top-ups - The Gift That Keeps on Giving

Making pension contributions is like playing a game of tax relief Tetris - fitting in the maximum contribution while the annual allowance window is still open. Remember, unused allowances from the previous three years can be carried forward, assuming you had a pension in place. It's rather like rolling over your mobile phone data, except this actually saves you money.

Inheritance Tax - The Family Fun Fund

The annual gift allowance remains stubbornly at £3,000, unchanged since 1981. If this had risen with inflation, we'd be looking at around £12,000 by now. Still, it's worth using, along with your small gift allowances.

Capital Gains Tax - The Art of Letting Go

With the CGT allowance reduced to £3,000, it's more important than ever to consider tax-efficient disposal of assets. Think of it as a financial spring clean - sometimes you need to let go of investments, like that exercise bike that's become an expensive clothes hanger.

Digital Tax - Welcome to the Future

HMRC's digital transformation continues at the same pace as my attempts to understand cryptocurrency. For those struggling with the online system, remember: if you try to get a teenager to fix it and they can’t, it's probably HMRC's fault, not yours.

SUMMARY

Time is of the essence. While procrastination might be entertaining, it's not a great tax planning strategy. If you are a current client we will have gone over this stuff with you, if not and you have not yet sorted then don’t call us (now)...

p.s.

Speaking of personality types and tax planning, I've noticed there are distinct approaches to tax returns. You have the 'Filing Cabinet Fanatics' who keep every receipt since 1987, including that suspicious lunch at the Harvester. Then there are the 'Shoebox Shufflers' who arrive at their accountant's office with a Tesco carrier bag full of crumpled receipts and optimism. My personal favourite are the 'Digital Disciples' who proudly announce they have everything on their phone, then spend the next hour trying to remember their password.