Pay Less Tax: February 2025 Edition

Hello there! Welcome to February’s edition of Less Tax -your guide to all things tax, simplified for your busy life. We hope you find this update useful.

Time for Some Year-End Tax Tinkering!

With the end of the tax/financial year on the horizon, now’s the perfect moment to fine-tune your finances and make the most of those lovely reliefs and allowances. Here’s a quick rundown of key opportunities:

Savings: Boost Your ISAs

Got some spare cash? Make it work harder by maxing out your ISA allowance (£20,000 per person). If you’re between 18 and 40, consider a Lifetime ISA for your first home or retirement and scoop up a 25% government bonus—up to £1,000 a year!

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Pensions: Double the Rewards

Thinking about topping up your pension? For every £4,000 you contribute, the government adds £1,000, and higher-rate taxpayers can enjoy even more savings. If your income’s over £100,000, you might even claw back your personal allowance. That’s a potential 60% tax saving!

Capital Allowances: Time to Invest

Businesses, now’s your chance to cash in on capital allowances! Spend up to £1m on equipment and enjoy a 100% write-off. Got your eye on a shiny new zero-emissions car? The full expensing relief is all yours too. Make sure purchases are wrapped up by your accounting year-end!

Capital Gains Tax: Use It or Lose It

Got assets to sell? Use your £3,000 CGT annual exemption before it resets on 6 April. Why give the taxman more than necessary?

National Insurance Contributions: Plug the Gaps

If you’re close to retirement but missing some NIC years, now’s the time to act. Pay voluntary contributions for tax years dating all the way back to 2006 (before 5 April 2025), and secure your full state pension. That’s a win for your future self.

Stamp Duty: Beat the Clock

Planning to buy property? Current SDLT thresholds drop on 1 April 2025, so sealing the deal sooner could save you thousands. First-time buyers, this one’s especially for you!

Furnished Holiday Lettings: End of an Era

Own a furnished holiday let? Heads up—the favorable tax treatment ends on 6 April 2025. Plan any renovations or cessation activities now to optimize your allowances and preserve potential reliefs.

Double-Cab Pickups: The New Rules

Changes are coming for double-cab pickup tax treatment starting April 2025. If you’re considering a purchase, acting before the deadline could lock in better benefits for years to come.

Employment Expenses: Don’t Miss Out

Claim tax relief on eligible work expenses, like uniforms, business travel, or professional fees. Whether you’re filing a self-assessment return or using HMRC’s online form, keep those receipts handy!

VAT and Sports Drinks: Sweet or Taxable?

In a recent case, Global By Nature Ltd convinced a tribunal that their drink powders weren’t sports drinks (and escaped the 20% VAT). Turns out, what qualifies as a “sports drink” isn’t always clear-cut—zero carbs, zero problems!

Dates for Your Diary

• 1 February: Corporation tax due (year ending 30/04/2024).
• 19 February: PAYE/NIC deductions and CIS returns for January.
• 26 March: Spring Forecast from Chancellor Rachel Reeves—stay tuned!

And that’s your February roundup! Have a tax query or just want to chat numbers over a cuppa? Give us a ring or drop us an email—we’re here to help. Until next month, keep thriving and surviving!