Smart Ways to Beat the April Tax Hike in the UK?

April 30, 2025

Every new tax year brings changes and from April, many UK taxpayers may see a larger slice of their income going to HMRC. But with the right strategies, you can minimise the impact of these tax increases and make your money work smarter. Here’s how:

1. Maximise Your Personal Allowance

For 2024/25, the personal allowance remains at £12,570. Make sure you’re using it fully:

If your partner earns less, consider income-splitting or the Marriage Allowance (worth up to £252).
Verify that your tax code is accurate, especially if you’ve changed jobs or have multiple income sources.

2. Claim All Allowable Expenses (If You’re Self-Employed)

Expenses like office supplies, software, and travel costs reduce your taxable income.

Don’t overlook work-from-home or use of home as office claims.
Keep clear records this is the key to claiming confidently during your Self Assessment.

3. Use Your ISA Allowance

Put savings into Individual Savings Accounts (ISAs) where income and gains are tax-free.

You can invest up to £20,000 per year.
Consider dividing your investments between Cash ISAs and Stocks & Shares ISAs to achieve a balanced portfolio.

4. Review Dividend and Capital Gains Strategies

The dividend allowance dropped to £500 in April 2024, and Capital Gains Tax (CGT) thresholds have also been slashed.

Spread gains over multiple tax years.
Use your £3,000 CGT exemption wisely.
Consider Bed and ISA strategies to shield assets from future tax.

5. Property Owners: Maximise Deductions

If you earn rental income:

Claim allowable property expenses (repairs, insurance, letting agent fees).
If eligible, use the Rent a Room Scheme (tax-free up to £7,500).

6. Use Family Allowances Smartly

Consider Junior ISAs to build savings tax-free for children.
Pay into your spouse’s pension if they’re a non-earner — it could get you tax relief too.

7. Increase Pension Contributions

Pension contributions lower your taxable income, making it an excellent way to:

Lower your income tax band.
Boost retirement savings.
Help you retain or reclaim Child Benefit if your income falls back below £60,000.

Final Thought

April’s tax rises are a signal to review your finances, not fear them. With smart planning — and possibly some advice from a tax professional you can shield yourself from the worst of the increases and even come out ahead.

Need help navigating the new tax year? We help individuals and small business owners optimise their taxes and grow with confidence. Get in touch today!