Guide to end of year tax planning 2025

The UK tax system is complex, and many individuals remain unaware of the assistance and allowances available to them. With the current tax year running until 5 April 2025, there’s still time to optimise your finances.

Taking advantage of various tax reliefs and allowances can minimise your tax liabilities and secure your financial wellbeing. Understanding isn’t just about numbers – it can help you plan ahead and make the most of what you earn.

Why personal tax planning matters

Personal tax planning should now be a priority for anyone keen to maximise what they keep from their income or investments. Using proactive measures before the tax year’s end ensures you capitalise on untouched reliefs, exemptions and options to safeguard your financial outlook.

Planning your tax liabilities requires understanding the system thoroughly. By staying informed and taking steps promptly, you can make the most out of available allowances while also considering strategic opportunities for the future, such as improving retirement stability or optimising savings.

Key dates in the UK tax calendar

The current tax year ends on 5 April 2025. This date also marks the closure of your annual earnings cycle, which helps determine your tax band.

Understanding your position is critical; it ensures you claim every allowance and relief to which you are entitled. From 6 April 2025, the following tax year begins. This transition makes the current period the optimal time to review your position, plan for the future and implement efficient strategies for both short-term and long-term financial goals.

Income Tax and allowances

Income Tax is something most of us deal with, but it doesn’t have to be confusing. Everyone receives a personal allowance. This is the amount of money you can earn without paying any Income Tax. For the 2024/25 tax year, this allowance is £12,570. However, if your income exceeds £100,000, your personal allowance will gradually shrink.

Once you go over the £12,570 threshold, your earnings are taxed progressively. This means higher earnings are taxed at higher rates.