Eight money moves to make TODAY before the tax year ends – or risk missing out on £1,000s

HOUSEHOLDS have just hours left to make several money moves or risk missing out on cash.

Today is the last day to tap into perks for the 2023/24 tax year before the new one starts.

Among these are steps like using up tax-free allowances, claiming benefits and checking if you’re owed cash.

Rewards up for grabs include pensioner payments and first-time buyer bonuses, and they can be worth thousands of pounds.

There are also a stack of tax changes that will come in when the new tax year starts tomorrow.

A state pension rise and other benefits increases like Universal Credit and Income Support are all on the way too, but these don’t kick in until Monday.

We’ve rounded up what you need to do by the end of the day to avoid missing out on money you could be owed.

Use up your ISA allowance

Savers will want to make the most of their ISA allowances before the end of the tax year as well.

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, plus they get a bonus of up to £1,000.

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 lower, at £9,000.

The main benefit of ISAs is that you’ll pay no income tax or capital gains tax on the interest you earn in the account, dividends paid to you and profit made by selling investments held in the ISA.

Watch out for stealth taxes

Workers usually get some form of annual pay rise linked to inflation so rising prices don’t leave them poorer over time.

Low earners are set to pay more in tax next year due to the rise in the minimum wage that kicked in on Monday.

This is due to income tax thresholds being frozen until 2028.

The minimum wage for workers aged 21 and over went up to £11.44 an hour from April 1, up from £10.42.

When wages go up but tax thresholds don’t budge, it’s called fiscal drag – or stealth tax.

If you earn less than £12,570 in a year, you don’t have to pay tax or national insurance on your income.

Income between £12,570 and £50,271 is taxed at the basic rate of 20% and between £50,271 and £125,140 at the higher rate of 40%.

Income above that is taxed at the additional rate of 45%.

While a pay rise from your boss or a rise in the minimum wage is often good news, tax rates staying the same means you’ll likely pay more income tax.

If you’re earning close to one of the income tax thresholds and are due a pay rise, it might be worth upping your pension contributions so you don’t pay the extra.

This is because pension contributions are exempt from tax, which means you get to keep all of the money instead of handing some of it to HMRC.

Claim tax relief on work expenses

There are a few ways you can claim tax relief if you’re spending money on things because you have to for your job.

During the pandemic government allowed everyone working from home to claim tax relief on some of their costs, including business phone calls and energy bills.

Eligible taxpayers can claim tax relief based on the rate at which they pay tax.

For example, if an employed worker pays the 20% basic rate of tax and claims tax relief on £6 a week, they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

HMRC confirmed that you have until April 5, 2025, to make claims for 2020/21 tax year, and until April 5, 2026, make claims for 2021/22.

So it’s definitely worth checking if you can claim back expenses you made while working from home during the pandemic.

Some workers may be able to claim for the previous tax year (2022/23) and the current one (2023/24), but many won’t as it’s no longer a legal requirement to work from home.

 to see if you can claim for this and other work expenses including mileage, specialist equipment and more.

 

Claim marriage allowance

Couples could get back up to £1,000 from HMRC this tax year by sharing their unused tax allowances.

The Marriage Allowance allows you to transfer 10% (£1,260) of your personal allowance, the amount you can earn tax-free each tax year, to your spouse or civil partner to cut their yearly tax bill, if they pay tax.

Couples who have not applied before can backdate their claims for the previous four tax years, which could potentially give them a lump sum payment worth just over £1,000.

They will also reduce their tax bill for 2023/24 by up to £252.

Here is how much the marriage tax allowance is worth for this tax year, plus the four previous tax years:

• 2023/24 – £252
• 2022/23 – £252
• 2021/22 – £252
• 2020/21 – £250
• 2019/20 – £250

You have until midnight tonight to backdate a claim for any year you were eligible back as far as April 5, 2019.

You can 

Check your tax code

If your tax code is wrong, you may be paying thousands more than you need to, and you’ll likely be owed money back.

The code is usually a mixture of letters and numbers – with the most common tax code being 1257L.

But these numbers and letters determine exactly how much income tax you pay on your earnings – so it’s important you’re on the right one.

And if you notice that you’re on the wrong tax code, you can claim back any overpaid tax for the last four tax years.

But it’s your responsibility to check and let HMRC know if it’s wrong.

You can be on the wrong tax code for several reasons, including if you change your job or your salary goes up or down.

Sometimes, HMRC might not have received this information, and so will assume your circumstances haven’t changed.

It’s always worth checking your tax code to make sure you’re paying the right amount of tax if you have moved jobs or had a change in salary.

Here’s how you can claim a rebate from HMRC if you think you’re owed tax back.

Recently, we found workers are paying £5.8billion more to HMRC than they should because they’re on the wrong tax code, according to Canada Life.

Uniform tax rebate

If you wear a uniform at work and have to wash, repair or replace it yourself, you may be able to reclaim hundreds of pounds worth of tax for up to five years of expenses.

You can reclaim whether it’s just a branded T-shirt or if you’re a fully uniformed pilot, police officer or nurse.

The standard flat-rate expense allowance for uniform maintenance is £60 a year.

By claiming a uniform tax refund, you’ll get back the amount of tax you would otherwise have paid on that £60.

So if you’re a basic-rate taxpayer, you’ll get 20% of £60 as a rebate – which is £12. Higher-rate taxpayers will get back £24.

You can backdate claims for the previous four tax years.

You’ll have until April 5 2024 to claim the relief for 2019/20 – after that, you’ll lose the ability to backdate for that year.

It’s also worth noting that some jobs come with a flat rate uniform allowance.

For example, pilots and flight deck crew can claim up to £1,022 a year, joiners up to £140 and ambulance staff up to £185 a year – you can .

Check your child benefit

Child benefit is paid to parents to help with the costs of childcare.

Payments are usually made to you from the government every four weeks.

You normally qualify for child benefit if you live in the UK and are responsible for a child under 16.

From April 8 the rate for your eldest or only child will go up to £25.60 a week – equating to around £102.40 a month or £1,334.86 a year.

If you claim child benefit you need to watch out for the High Income Child Benefit Charge though, as currently you lose all child benefits when you earn over £60,000.

Plus, anyone earning over £50,000 has to pay back a portion of the money in the form of extra income tax.

Although it’s worth bearing in mind that from tomorrow the amount at which you lose you benefits is rising to £80,000, while the amount have have to start paying back parts of it is going up to £60,000.

A change in situation, such as a salary increase or a new partner, could change entitlement to child benefits because of these rules.

This can result in a big bill to repay, even adding up to thousands of pounds for some families.

Before next month, 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 a cycle-to-work scheme.

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 £6,000 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.

Basic rate taxpayers pay 10% on their gains unless it’s property, in which case they pay 18%.

Higher and additional rate earners pay 20% tax, or 28% on property.

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 this and next tax year rather than in a single transaction.

Bear in mind from the next tax year the allowance falls to £3,000.

Meanwhile, millions of households will be affected by further money changes in April.

Plus, here’s more information on the huge child benefit changes kicking in on Saturday.

Do you have a money problem that needs sorting? Get in touch by emailing squeezeteam@mcb777.fun.

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