Tax Planning: UK Tax Year End — Key Dates and Deadlines for 2025/26

The UK tax year runs from 6 April 2025 to 5 April 2026. On 6 April 2026, every annual allowance resets to zero. You cannot roll over unused entitlements from 2025/26 into the new year (with one narrow exception for pensions, covered below). Here is what resets:

• Personal Allowance: £12,570 of tax-free income (frozen since 2021/22, and set to remain frozen until at least April 2028 according to gov.uk).
• ISA allowance: £20,000 across all ISA types — Cash ISA, Stocks and Shares ISA, Lifetime ISA, and Innovative Finance ISA combined.
• Capital Gains Tax (CGT) annual exempt amount: £3,000 for 2025/26, down from £6,000 in 2023/24.
• Dividend allowance: £500 tax-free dividend income.
• Pension annual allowance: £60,000 (with carry-forward of up to three previous years' unused allowance available).
• Marriage Allowance: the ability to transfer £1,260 of personal allowance to a spouse or civil partner.

The freeze on the personal allowance is a deliberate policy known as fiscal drag. As wages rise with inflation but the allowance stays fixed, more of your income falls into taxable bands. Our analysis of how frozen thresholds are costing UK taxpayers shows the cumulative impact since 2021/22 now amounts to hundreds of pounds per year for a median earner.

Understanding the current rates is essential before making year-end decisions. For 2025/26, the income tax bands for England, Wales, and Northern Ireland are:

Note that the personal allowance tapers by £1 for every £2 of income above £100,000, disappearing entirely at £125,140. This creates an effective 60% marginal rate between £100,000 and £125,140 — one of the most punitive bands in the system.

National Insurance contributions for employees are 8% on earnings between the Primary Threshold (£242 per week, equivalent to £12,570 per year) and the Upper Earnings Limit (£967 per week, £50,270 per year), then 2% on everything above. Self-employed individuals pay Class 4 NI at 6% on profits between £12,570 and £50,270, and 2% above that.

As the chart shows, the combination of income tax and National Insurance means a basic rate taxpayer actually loses 28p of every pound earned in that band, while someone in the taper zone loses 62p. These rates make pension contributions and salary sacrifice arrangements particularly valuable for higher earners — see our pensions hub for detailed strategies.

Your ISA allowance is the single most valuable tax shelter available to most UK adults. The £20,000 annual limit covers all ISA types combined, and any unused portion is lost forever on 6 April.

With the Bank of England base rate at 3.75%, cash ISA rates remain competitive. A higher rate taxpayer earning 4% on £20,000 outside an ISA would pay £320 in tax on the interest. Inside a cash ISA, that same interest is completely tax-free. Over five years, the tax saving compounds to over £1,700.

For those with a longer time horizon, a Stocks and Shares ISA shields all capital gains and dividends from tax indefinitely. Given the CGT annual exempt amount has been cut to just £3,000, the ISA wrapper has become even more important for investors.

Action items before 5 April 2026:

1. Check how much of your £20,000 ISA allowance you have used this year.
2. If you have not maximised it, consider topping up even with cash — you can always transfer to a Stocks and Shares ISA later.
3. If you have children, consider a Junior ISA (£9,000 annual limit).
4. Do not forget Lifetime ISAs (£4,000 limit, 25% government bonus) if you are under 40 and saving for a first home or retirement.

For a full breakdown, see our recent article on the ISA deadline and how to use your allowance before it vanishes.

The pension annual allowance for 2025/26 is £60,000 — the maximum you can contribute (including employer contributions) while receiving tax relief. Since the lifetime allowance was abolished from April 2024, there is no longer a cap on the total value of your pension pot, making large contributions more attractive than ever.

Pension contributions are one of the most tax-efficient actions available. A higher rate taxpayer contributing £10,000 to a pension effectively pays only £6,000 after tax relief (basic rate relief is added automatically; higher rate relief is claimed via Self Assessment). For someone in the 60% taper zone between £100,000 and £125,140, the effective cost drops even further.

Carry-forward rule: If you did not use your full £60,000 allowance in the previous three tax years (2022/23, 2023/24, 2024/25), you can carry forward the unused portion into 2025/26. This means you could potentially contribute well over £60,000 this year. You must have been a member of a registered pension scheme in each year you wish to carry forward from.

Key deadline: Contributions must be made and received by the pension provider by 5 April 2026 to count for the 2025/26 tax year. Given processing times, aim to submit contributions by late March at the latest.

The chart above shows the significant increase in the pension annual allowance from £40,000 to £60,000 that took effect in April 2023. Combined with the abolition of the lifetime allowance, the pension regime is now substantially more generous than it was just three years ago.

The CGT annual exempt amount for 2025/26 stands at just £3,000 — a dramatic reduction from the £12,300 that applied as recently as 2022/23. This makes year-end CGT planning critical for anyone holding assets outside tax wrappers.

CGT rates for 2025/26:

• Basic rate taxpayers: 10% (18% on residential property)
• Higher and additional rate taxpayers: 20% (24% on residential property)

If you have unrealised gains on shares or funds held outside an ISA, consider selling enough to crystallise gains up to the £3,000 exempt amount before 5 April. You can immediately repurchase different funds (but note the 30-day "bed and breakfast" rule prevents you from buying back the identical holding).

Dividend allowance: Only £500 of dividend income is tax-free in 2025/26. Above that, dividends are taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate). If you run a limited company and have flexibility over when to declare dividends, consider whether taking £500 before 5 April and another £500 after 6 April could spread the allowance across two tax years.

The collapse in the CGT exemption shown above means that even modest investment gains now attract tax. Sheltering assets within an ISA or pension wrapper is the most effective defence.

Here is a chronological checklist of the most important tax dates and deadlines surrounding the 2025/26 year-end:

Before 5 April 2026 (year-end):

• Use remaining ISA allowance (£20,000 limit)
• Make pension contributions for 2025/26 (allow processing time)
• Crystallise capital gains up to £3,000 exempt amount
• Claim Marriage Allowance transfer of £1,260 if eligible
• Use dividend allowance (£500)
• Make charitable donations for Gift Aid tax relief in 2025/26
• Review salary sacrifice arrangements with your employer

6 April 2026 (new tax year 2026/27 begins):

• All annual allowances reset
• New rates and thresholds take effect (check the Spring Statement 2026 changes)
• 2025/26 tax year carry-forward clock starts for pensions

31 July 2026:

• Second payment on account for 2025/26 Self Assessment due
• Interest charges apply from this date on any unpaid amount

5 October 2026:

• Deadline to register for Self Assessment if you had untaxed income in 2025/26 for the first time

31 January 2027:

• Online Self Assessment filing deadline for 2025/26
• Payment of any remaining tax owed for 2025/26
• First payment on account for 2026/27 due

Missing the 31 January deadline incurs an automatic £100 penalty from HMRC, with further penalties and interest accruing thereafter.

For more on this topic, see our guide to Marriage Allowance UK 2025/26.

With fewer than 30 days until the tax year ends, here is a prioritised checklist ranked by potential tax saving:

High impact (potentially £hundreds to £thousands saved):

1. Maximise pension contributions — especially if you are a higher rate taxpayer or in the £100,000-£125,140 taper zone. The tax relief at 40% or 60% is substantial. Check carry-forward eligibility for previous years' unused allowance.
2. Fill your ISA — £20,000 of permanently tax-free growth. Even if you only have cash to deposit now, open the ISA before 5 April and you preserve the allowance.
3. Harvest capital gains — sell and rebuy (different assets) to use your £3,000 CGT-free amount. A higher rate taxpayer saves up to £600.

Medium impact (£tens to £hundreds saved): 4. Claim Marriage Allowance — if one spouse earns under £12,570 and the other is a basic rate taxpayer, transferring £1,260 saves £252 per year. You can backdate claims for four years via gov.uk. 5. Use your dividend allowance — £500 tax-free. Particularly relevant for company directors controlling dividend timing. 6. Make Gift Aid donations — higher rate taxpayers can claim back the difference between 40% and 20% relief on charitable donations made before 5 April.

Administrative (avoid penalties): 7. Check your tax code — an incorrect code could mean you have overpaid or underpaid tax all year. Review your Personal Tax Account on gov.uk. 8. Gather records — if you need to file Self Assessment, start collecting P60s, dividend vouchers, and CGT records now rather than scrambling in January.

This article is for informational purposes only and does not constitute financial advice. Tax rules are subject to change and individual circumstances vary. Consider consulting a qualified financial adviser or tax professional before making significant financial decisions.