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Use it or lose it! Our Financial Planner Robert Sherlock looks at how you can maximise your tax allowances and reliefs before the end of the tax year

How to maximise your tax allowances and reliefs before the end of the tax year

Could you be missing out on hundreds of pounds, maybe even thousands? Money that could be in your bank account rather than the tax man’s.

There are many different types of tax allowances and reliefs available to people who live in the UK. It’s not just the first £12570 of income that’s tax free, as some people may think.

With the tax year end looming, Stan Sherlock Associates wants to make sure you are utilising the tax allowances/reliefs that have a limited time window and need to be actioned before the 5th April 2022.

Here are some of the things you should be taking advantage of:


Cash ISA
A cash ISA works in the same way as traditional savings accounts but you won’t have to pay tax on any of the interest you earn.

For the 2021-22 tax year each person has an ISA allowance of £20,000. To take out a cash ISA you have to be a UK resident and over 16 years old.

You can only open one cash ISA per year but you are allowed to transfer to another cash ISA or a stocks and shares ISA with another provider if you want to.

Stocks and shares ISAs

With a stocks and shares ISA you can hold a variety of investments such as shares, bonds and funds. Just like the cash ISA you can save up to £20,000 a year tax free, but you get to choose what investments you put inside it, so it’s worth getting financial advice. You also have to be 18 or over to be eligible.

Stocks and shares ISAs provide an option for people looking to avoid the erosive impact of inflation on returns. Over time there is the potential for better returns with an investment ISA over cash, although the risks are also greater.

Junior ISAs

If you’re looking to put cash aside for your kids, Junior ISAs (JISAs) are a great way of doing so. These accounts are available to anyone under 18.

Like the adult accounts, you won’t pay any tax on your interest. In the 2021–22 tax year you can save or invest up to £9,000 in a JISA. You can save for your child either in a cash JISA, a stocks and shares JISA, or a combination of the two. JISAs can be opened by parents with children aged under 16 and then by children themselves when they are aged 16 and 17.


Saving into a pension comes with great tax benefits. For a start, investments in your pension are free from Income Tax and Capital Gains Tax. Pension contributions up to your annual allowance will also receive an automatic 20% top-up from the taxman, and higher-rate and additional-rate taxpayers can claim back another 20% or 25% through their Self-Assessment.

Because of these generous tax rules, there is a limit to the amount you can pay into your pension. Each year, you can contribute as much money as you earn, usually up to £40,000 (although this tapers down to £4,000 for higher earners).

If you have not used your annual allowance in the last three years, you may be able to make extra contributions by using carry forward. But timing is crucial and we only have until 5th April to get you sorted.

Inheritance Tax:

Each tax year you can make a range of tax-free gifts. These leave your estate immediately and won’t be considered when calculating your inheritance tax bill.

Examples include, amongst others:

Wedding gifts of up to £5,000 for a child, £2,500 for a grandchild or great-grandchild, or £1,000 to anybody else.
Gifts of up to £3,000 each tax year, which can be carried over one year for a total of £6,000. This is useful if you did not use it in the 2020/2021 tax year.
Unlimited gifts from surplus income that won’t affect your standard of living.
Inheritance tax can be tricky and to get it right requires a lot of planning.

Venture Capital Trusts and Enterprise Investment Schemes*:

Although only suitable for individuals with a higher appetite for risk, you can invest up to £200,000 in Venture Capital Trusts and get up to 30% income tax relief.

Similarly, the taxation of Enterprise Investment Schemes means you can invest up to £1 million and claim up to 30% income tax relief.

*Don’t invest unless you’re prepared to lose all the money you invest. Venture Capital Trusts and Enterprise Investment Schemes are high-risk investments. You may not be able to access your money easily and are unlikely to be protected if something goes wrong.

Why it’s important to take action now:

Utilising allowances and reliefs is ultimately about saving tax. This means that less of the income you generate is paid out in tax, so you have more money in your pocket! Regardless of what wealth you have, retaining more of your money can only be a good thing!

Things like pensions and stocks and shares ISA’s can be complex and take time to arrange and implement. The sooner you take advice the better. Moreover, with something like an ISA, the earlier you do it, the quicker the interest/growth is made tax free.

You’ve got till the 5th April 2022 to take advantage of this years allowances and reliefs. If you don’t use them, in many instances you lose them.

How to make the most of your tax allowances?

As financial planners we look at individual circumstances and build a bespoke plan for your unique needs.

We want your money to work harder for you. Ensuring your money is invested tax efficiently is a huge part of this.

We can guide you when making important financial decisions so that you can achieve the lifestyle you want for you and your family. It’s all in the planning and at this time of year, timing is key!

Stan Sherlock Associates | For Lifelong Financial Success

Please note:

An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Tax concessions are not guaranteed and may change in the future. Tax free means the investor pays no tax.

Approved by the Openwork Partnership on 05/10/2023.

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