Year end tax planning ahead of 5 April

Despite changes to how Budgets are delivered, this date remains critical for individuals and business owners reviewing their tax position.

Following last year’s Budget, the Office for Budget Responsibility now produces one full annual assessment alongside the Autumn Budget, with the Spring Statement reduced to a limited update. While some measures announced in Budget 2025 will not take effect until 2028 or later, there is still plenty that can be done now to manage tax efficiently before the current year closes.

Income threshold planning remains one of the most important areas to review. The high income child benefit charge applies once income exceeds £60,000 and is fully withdrawn at £80,000. Personal allowance tapering begins at £100,000 and is lost entirely at £125,140, with tax-free childcare also removed once income passes £100,000. As year end approaches and income becomes clearer, there may be opportunities to manage income or pension contributions to avoid these steep marginal tax rates.

Inheritance tax planning also warrants attention. The nil rate band has been frozen at £325,000 until April 2031 and has not increased since 2009. Making full use of annual exemptions, including the £3,000 gifting allowance and gifts from surplus income, is becoming increasingly important as more estates fall within scope.

Marriage allowance is another relief often overlooked. If one spouse or civil partner had income below the personal allowance in 2021/22, a claim can still be made until 5 April 2026, potentially generating a tax saving of up to £252 for that year alone. Similar claims may also be available for later years.

Paul Tofton, Partner, comments, “Frozen thresholds mean that many taxpayers are paying more tax without realising it. The tax year end is a valuable opportunity to review income and allowances and take action where appropriate rather than leaving matters until it is too late.”

While this is not an exhaustive list, early advice remains key. Reviewing your position before 5 April can help ensure allowances are not wasted and tax is paid efficiently. Download our full 2025/26 Year End Tax Planning Guide here.