Tax deadline 2017/18: use your tax-free pension, capital gains, ISA allowances and more

The end of the tax year is almost upon us, so what tax breaks and benefits should you be grabbing before it is too late?

There are less than 24 hours left until the end of the 2017/18 tax year.

Make the most of that time to grab a range of tax breaks and free cash before it is too late.

“There are a huge range of different ways that you could be saving money through government or employer tax-breaks and benefits; often, you just need to know where to look,” says Liz Alley, head of financial planning operations at Brewin Dolphin.

“Whatever you’re entitled to, whether it’s childcare vouchers or winter fuel payments, it is important to make use of all the schemes available to you.”

ISA Allowance - £20,000

If you don’t invest all of your annual £20,000 ISA Allowance before midnight on 5 April, then you’ll lose it. You can choose to put it into a Cash ISA or a Stocks & Shares ISA but you must act fast!

Compare Cash ISAs with LoveMONEY

Gifting Allowance - £3,000

Every tax year you can give up to £3,000 away in cash gifts without that money being subject to inheritance tax.

Unused gift allowances can also be carried over, for one year only. So, if you didn’t use last year’s exemption then you can give away up to £6,000 this year.

How to cut your Inheritance Tax bill

Capital Gains Tax Allowance - £11,300

Capital Gains Tax (CGT) is levied on any profit you make from selling assets such as a second home, shares or valuables such as jewellery, antiques or art.

Every tax year almost everyone who is liable for CGT gets a tax-free allowance of how much profit you can make that year before CGT is due. For the current 2017/18 tax year, the allowance is £11,300.

This tax can take a “little bit of getting your head around,” says Alley. So, “you could consider talking to an adviser to make sure that you’re making the most of what is available to you in a tax-efficient way.”

Annual Pension Allowance - £40,000

There is an annual limit on how much you can contribute to your pension savings and receive tax relief on.

The limit is currently £40,000, although it is reduced if you earn more than £150,000 a year. Your limit is also cut if you have already started withdrawing money from your pension, in that scenario the annual allowance falls to £4,000.

If you haven’t used your allowance up yet, now’s the time to pop a little extra into your pension. You can also carry forward unused allowances from the previous three years.

Also, if you are part of a workplace pension scheme your employer may match your contributions meaning you get even more extra money.

“In the case of matched contributions in workplace pensions, the more you put in, the more you get back – what other investment grows by at least 20% up front?” says Alley.

Childcare Vouchers – up to £55 a week

Another workplace benefit you may want to make the most of is the childcare voucher scheme. Not all employers offer it, but if yours does you could receive up to £55 a week of your wages in vouchers to pay for your childcare from your pre-tax salary.

How to apply for childcare vouchers

The scheme is due to close to new applicants in October 2018, so now’s the time to check if you can get the vouchers.