Tax Year End Checklist (Part 1)

Personal Allowance

Personal Allowance:
The first £12 570 of your earnings are tax-free. Make sure you fully utilise your Personal Allowance each year as it can’t be carried forward

Marriage Tax Allowance

If you’re married or in a civil partnership and one of you earns less than the £12 570 Personal Allowance, up to £1260 of Personal Allowance can be transferred to your partner providing they are a basic rate taxpayer. This can result in a tax saving of up to £252.

Personal Savings Allowance

On top of the Personal Allowance, you can also earn savings interest up to certain limits without paying any additional tax. For Basic Rate Taxpayers, this is £1000 and for higher rate taxpayers £500. For additional rate taxpayers there is no Personal Savings Allowance.

Personal Savings Allowance

On top of this, if you earn less than £17 570 then you may be eligible for the Starting Rate for Savings, which means you can earn up to £5000 in savings interest before paying any tax.

Pension Contribution

Up to the age of 75, you can contribute up to 100% of your earnings or £60 000 into a pension (whichever is less). There are some restrictions for high earners, in the form of the tapered pension annual allowance.

Even if you have no income, you can contribute £2,880 per year into a pension. You benefit in the form of tax relief at your highest marginal income tax rate. As a basic rate taxpayer, a £100 contribution costs you £80, for a higher rate taxpayer it costs you £60, and as an additional rate taxpayer £55.
As a Ltd Company Director, you can pay into your own private pension out of the business and treat it as an allowable business expense.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances which cannot be foreseen.
The value of investments and any income from them can fall as well as rise, and you may not get back the original amount invested.
Approved by The Openwork Partnership on 04/03/2024