The 7 things you need to do NOW before the tax year ends – or you could miss out on THOUSANDS of pounds
THE end of the tax year is fast approaching and it's worth checking these seven things so you don't miss out on any money you're entitled to.
It comes as bills are rising across the board, from energy to broadband and more, stretching consumers' budgets to the max.
In the UK the tax year runs from April 6 one year to April 5 the next - not from January to December like a regular calendar year.
That means you have just days left to take action or risk missing out on thousands of pounds.
Each tax year you get certain allowances, like how much you can earn, save and put into your pension tax-free.
Other things can also change at this time of year, for example how much you pay in National Insurance.
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You'll be paying more tax from April as the government is introducing its social care levy.
That means an extra 1.25 percentage points on top of the existing National Insurance rates to help cover the cost of social care.
Rates will rise from 12% on earnings between £184 to £967 a week, to 13.5%.
But also a living wage rise is on the way too - and such a pay rise could help cushion the blow of rising taxes if you're on minimum wage.
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Those aged 21-22 currently receive £8.36 an hour but this will rise to £9.18 in just a few days' time.
But here's what you need to do before the end of the 2021-22 tax year on April 5 to avoid missing out on money you're owed - and it could add up to thousands of pounds.
1. Check your entitlement to the marriage allowance
Couples across the UK who are married or civil partnered could get tax back thanks to the marriage allowance.
You can transfer up to a maximum of £1,260 in unused allowance, which would mean saving £252 off your income tax bill this year.
But you are also allowed to backdate your claim for up to four years as long as you met the criteria.
This would net you an extra £970 in tax savings bringing the total amount you've got back up to £1,220.
You have until the end of this tax year to backdate a claim for the 2017/18 tax year.
To get it, one partner in the couple must be a non-taxpayer, and the other must be a basic rate taxpayer.
You can
2. Check your tax code
Martin Lewis has warned workers to check their tax codes by April 5 - or you could miss out on thousands of pounds.
If your code was wrong and you overpaid tax in the 2017-18 tax year you'll need to claim it by April 5 this year.
Tax code mistakes can happen if you change job or started receiving benefits and it's up to you to spot any error and tell HMRC.
There's a limit of four years on claiming back overpaid tax, so it's your last chance to fix any error and get money back for 2017-18.
Here's how you can claim a rebate from HMRC if you think your owed tax back.
3. Uniform tax rebate
If you wear a uniform for work and your employer doesn't pay for it, you could be entitled to claim tax back on the cost.
You can claim tax back on £60 a year worth of uniform costs, so for basic rate taxpayers that's £12 a year and for higher rate taxpayers that's £24 a year.
It's another tax rebate you can claim for the previous four years, if you're entitled in the year your claiming for.
So there's a deadline of April 5 for making a claim for the 2017-18 tax year.
4. Use up your ISA allowance
Savers will want to make the most of their ISA allowances before the end of the tax year.
An ISA (individual savings account) is a type of savings account where you don't pay any tax on interest earned.
Each year you get an allowance which is the total amount you can save into it each year to take advantage of this tax benefit.
You can save up to £20,000 each year into an ISA and if you don't use it up you can't carry it over to the next year.
First-time buyers saving into a Lifetime ISA (LISA) can save up to £4,000 into this account each year tax-free.
As the balance in an ISA grows though, it remains free from tax year after year.
How do you switch Isa provider?
IF you're in the market for a new, better paying Isa, there's one thing you shouldn't do.
Never withdraw money from your Isa account to put it into your new one - if you do it'll lose its tax free benefits.
Instead you need to follow the simple transfer process.
Make sure that the new account you want to use accepts transfers (not all do) and then fill in the Isa transfer form with the new provider.
It will arrange for your savings to be transferred over, with the process taking no more than 15 working days.
And remember, you can only have one "active" Cash Isa per tax year.
If you put your cash in a bog standard bank account that's not an ISA, you'll be taxed on any interest over £1,000 if you're a basic-rate taxpayer.
For higher rate taxpayers it's £500 while additional rate taxpayers don't get this allowance, which is know as the personal savings allowance (PSA).
The ISA tax-free allowance is more generous than the PSA which is useful if you have more saved.
5. Use up your child's ISA allowance
Junior ISAs, known as JISAs for short, are savings accounts for kids that work in the same way.
But the amount you can save into one tax-free each year is less at £9,000.
It used to be much less at £4,368 but the amount was increased in the Budget two years ago.
6. Check your child benefit
Child benefit is worth £84.60 a month for the first child - or just over £1,000 a year - and £56 a month for an extra child.
But you have to start paying back the cash if you earn over a certain amount - so check this to avoid a charge.
High earners who earn more than £60,000 must pay back Child Benefit in full.
Meanwhile, anyone earning over £50,000 has to pay back a portion of the money in the form of extra Income Tax.
But many parents aren't even aware the charge exists.
It's known as the High Income Child Benefit Charge and effectively you lose all child benefit when you earn over £60,000.
A change in situation such as a salary increase or new partner could change entitlement to child benefit because of these rules.
This can result in a big bill to repay, even adding up to thousands of pounds for some families.
Before the end of the tax year if you find you earn over this amount it could be worth looking at ways to reduce your taxable income within the rules.
For instance, putting money into a workplace pension or using employer salary sacrifice schemes can reduce your taxable income without losing money.
Salary sacrifice is an agreement to reduce an employee's cash pay for non-cash benefits, like childcare vouchers or cycle to work scheme.
7. Use up your capital gains tax allowance
Capital gains tax is charged on the profit you make when you sell something that has gone up in value, such as stock and shares, artwork or even a second home.
The first £12,300 of profit is tax free but after that you'll be charged up to 28% depending on what rate taxpayer you are and what you sold.
If you're planning on selling something and the profits could be over this amount, cashing in at the right time can keep profits below the threshold or reduce your capital gains tax bill.
For example, cash in stocks and shares in two transactions over multiple tax years rather than a single transaction.
When does the tax year end?
The current 2021-2022 tax year comes to an end on April 5.
Many other countries around the world have tax years that run with the calendar year.
In Ireland, the US, France and Germany for example, it starts on January 1 and ends on December 31.
But in the UK for historical reasons, our tax year starts and finishes mid-way through.
When does the new tax year start?
The new tax year for 2022-2023 starts on Wednesday, April 6.
There are quite a few changes taking place that can affect your finances.
Some are directly related to tax and others are timed to come in at the same time.
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