From checking how your bills are changing to understanding your allowances and making the most out of the new Isa rules; we’ve identified seven actionable steps you can tick off your list for a great start to the new financial year.
1. Check if your bills are going up
With the rising cost of living still weighing heavily on many households, it's worth using the new tax year to check how your monthly expenses might change, so you can cover increases and find ways to save.
Find out more:2. Take note of insurance end dates
The new tax year is also a good time to review how much you are paying for your car, home, pet and travel insurance and when you need to renew your policies.
So it's a good idea to make a note of when your policies are up for renewal and putting the dates in your diary for a month before then to start shopping around for a new deal to compare against your renewal quote.
Find out more:3. Get to grips with your tax paperwork
Your tax code tells your employer or pension provider how much income tax to deduct from your wages or pension, so you will want to make sure it's right.
Being on the wrong tax code could mean HMRC doesn't have enough information about you, you owe money to HMRC or are owed a refund.
Find out more:4. Make the most of new Isa rules
Isas are handy tools for savers and investors. They allow you to earn interest, dividends and capital gains tax-free – which means better returns over the long-term – and they could also cut paperwork and dealing with HMRC.
Currently, you're limited to opening and paying into one Isa of each type per year, but this rule will be scrapped from 2024-25.
So, for example, you could open two cash Isas with different providers in the 2024-25 tax year, all within the £20,000 annual allowance. This might suit you if you want to benefit from the flexibility of an instant-access deal and the higher rates available on fixed-rate bonds.
Find out more:5. Review your investments
The start of the new tax year is a good time to adjust your investment portfolios to ensure they align with your financial goals and risk tolerance and that you're not paying too much in fees.
Thanks to the new Isa rules, transferring investments between Isa providers will become easier. From 2024-25, you can transfer part of your Isa portfolio from one provider to another without moving everything.
This flexibility lets you explore cheaper Isa providers, potentially saving you a lot on fees. For instance, moving £25,000 invested in funds from a costly platform to a more affordable one could save you £75 annually. Larger portfolios could save over £1,000.
Find out more:6. Look for ways to cut your tax bill
With the personal allowance frozen for 2024-25 it's important to take advantage of other tax reliefs and allowances that might help reduce your tax bill.
If you're married or in a civil partnership you may be able to use the marriage allowance to increase your tax-free income by up to £252 in 2024-25. To qualify, one partner must earn less than the personal allowance (£12,570), while the other must be a basic-rate taxpayer earning between £12,571 and £50,270. This allows the lower-earning partner to transfer £1,260 of their personal allowance to the higher-earning partner, reducing their tax bill. By backdating your claim, you can receive a tax rebate of up to £1,242.
Find out more:7. Understand tax-free allowance cuts
Alongside the halving of the CGT allowance, the tax-free allowance for dividends is also decreasing from £1,000 to £500 per year, starting in April. This change underscores the importance of Isas for investors, as dividends from investments held within Isas remain tax-free.
Find out more:Which? Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665 and is an Introducer Appointed Representative (FRN 610689) of the following: 1. Inspop.com Ltd for the introduction of non-investment motor, home, travel and pet insurance, who are authorised and regulated by the Financial Conduct Authority (FCA) to provide advice and arrange non-investment motor, home, travel and pet insurance products (FRN310635). Inspop.com Ltd is authorised and regulated by the Financial Conduct Authority (FCA) to provide advice and arrange non-investment motor, home, travel and pet insurance products (FRN310635) and is registered in England and Wales to Greyfriars House, Greyfriars Road, Cardiff, South Wales, CF10 3AL, company number 03857130. Confused.com is a trading name of Inspop.com Ltd. 2. LifeSearch Partners Limited (FRN656479), for the introduction of Pure Protection Contracts and Private Health Insurance, who are authorised and regulated by the FCA to provide advice and arrange Pure Protection Contracts and Private Health Insurance Contracts. LifeSearch Partners Ltd is registered in England and Wales to 3000a Parkway, Whiteley, Hampshire, PO15 7FX, company number 03412386. 3. Optimise Media Limited (FRN 313408) for the introduction of the First Direct Current Account, LV= Pet Insurance and LV= Asda Breakdown. Optimise Media Limited are authorised and regulated by the Financial Conduct Authority to provide credit brokering and general insurance activity. Optimise Media is registered in England and Wales to Exchange Street Buildings, 35-37 Exchange Street, Norwich, England, NR2 1DP and company number 04455319 4. HUB Financial Solutions, for the introduction of equity release advice, who are authorised and regulated by the Financial Conduct Authority (‘FCA’) to provide advice and guidance on financial products for those who have retired or are approaching retirement (FCA Firm Reference Number: 455713). HUB Financial Solutions is registered in England and Wales to Enterprise House, Bancroft Road, Reigate, Surrey RH12 7RP, company number 05125701. 5. Alan Boswell Insurance Brokers Ltd (FRN 301), for the introduction of non-investment landlord insurances, who are authorised and regulated by the Financial Conduct Authority to provide advice and arrange insurance contracts. Alan Boswell insurance brokers Ltd is registered in England at Prospect House, Rouen Rd, Norwich NR1 1RE, company number 02591252. We do not make, nor do we seek to make, any recommendations or personalised advice on financial products or services that are regulated by the FCA, as we’re not regulated or authorised by the FCA to advise you in this way. In some cases, however, we have included links to regulated brands or providers with whom we have a commercial relationship and, if you choose to, you can buy a product from our commercial partners. If you go ahead and buy a product using our link, we will receive a commission to help fund our not-for-profit mission and our campaigns work as a champion for the UK consumer. Please note that a link alone does not constitute an endorsement by Which?.
source https://www.which.co.uk/news/article/new-tax-year-2024-checklist-7-things-to-do-for-your-money-aV9vP8Z9wvMA