Get ready for the end of the tax year

Use your ISA allowance

You can save or invest up to £20,000 per year with a cash ISA, a stocks and shares ISA, or a combination of the two, tax-free. You can also invest £9,000 per year into a Junior ISA and £4,000 per year into a Lifetime ISA. Any contributions to a Lifetime ISA allowance does count towards the overall £20,000 ISA allowance but any contribution to a Junior ISA does not.

If you haven’t made ISA contributions by 5th April 2023, you won’t be able to carry your allowance over and you’ll end up missing out for this tax year.

Top up your pension contributions

You can pay up to £40,000 (full allowance) into your pension in a single tax year. If you are not particularly near to this limit, diverting some money into your pension could be a good way to mitigate your wider income tax bill. You will also receive tax relief at your marginal rate of income tax – so a high rate taxpayer will receive higher rate tax relief of 40% on their pension contributions.

Use Your Capital Gains Tax allowance

If you sell assets (including certain investments) or personal possessions that are worth more than £6,000 – apart from your car – you must pay tax if the proceeds exceed £12,300.

Genuine gifts from a civil partner or spouse do not count towards the allowance, so it is worth checking where potential tax savings could be made.

Use your dividend allowance

A dividend allowance is an amount of dividends that you don’t have to pay tax on, which is currently £2,000. So if you are a company director or shareholder, or get dividends through a Stocks and Shares ISA, you can receive up to this amount tax-free.

Use your Personal Savings Allowance

This allowance lets you earn interest on your savings without paying tax on it, but the size of the allowance depends on your income tax rate.

If you’re a basic rate taxpayer (20%), you can earn £1,000 in savings interest per year tax-free, while higher rate taxpayers (40%) can earn £500 in savings interest per year with no tax. Additional rate taxpayers (45%) do not get an allowance.

This is by no means an exhaustive list, and many of these options may not even apply to you.

Speaking with a professional, regulated financial adviser can really help you to make good decisions and take advantage of these allowances and incentives. They can talk through the different options available to you to help you make the most from your money.