When does the tax year end?

What is tax year end?

Tax year end refers to midnight on 5th April, when the current tax year closes and a new one begins. ISAs, income tax and capital gains tax allowances are the main ways people can protect their wealth and save on tax, and tax year end is when many of these allowances reset. It’s also when proposed changes to tax rules can officially come into effect. 

What tax year are we in?

We’re currently in the 2025/2026 tax year, which runs for 12 months. It’s important to know when the tax year starts and ends: from 6th April 2025 to 5th April 2026. Any tax-saving measures you take before the end of the tax year 2025, such as making ISA contributions or pension subscriptions, will normally be counted towards your 2025/2026 allowances. 

From 6th April 2026, a new tax year starts and a fresh set of allowances become available.

Why does tax year end matter?

It matters because the tax system is built around limits within an annual window. Once the window shuts, that’s it – no more time to take advantage of unused allowances.

In reality, most people won’t use all of their available allowances in any given year – and that’s perfectly normal. But the lead up to tax year end is still one of the most important planning points in the financial calendar. It’s a chance to check that you’re using as much of what’s available to you as realistically possible, and that any financial planning decisions made earlier in the year still make sense if tax rules are changing. 

You rarely have to do anything fancy or complex around tax year end – just ensure nothing valuable is being left on the table and your money is as protected from tax as it can be.

Can I carry over unused allowances to the next tax year?

In most cases, no – unused allowances can’t be carried forward.

The ISA allowance, for example, is often front and centre in tax year end conversations because if you don’t use it by 5th April, it expires. The following tax year gives you a new allowance, but you can’t go back and fill gaps from previous years. 

The same principle applies to the capital gains tax allowance for taking profits on investments and the dividend allowance for receiving income from shares. If you exceed the relevant  threshold in a tax year you’ll have to pay tax.

Pension allowances can, in certain circumstances, be carried forward from previous years, but only if you meet certain conditions. This can be helpful for higher earners or those who make irregular contributions to their pension, but the rules are technical and worth checking carefully.

Learn more about pension contribution rules: What is pension tax relief? | Charles Stanley

How can I prepare for the end of the tax year?

A good starting point is to check which allowances you normally use and how much of them is left to fill. Many people are surprised to learn how few savers use their full allowances. HMRC figures for the 2022/2023 tax year showed only 7% of savers used their entire £20,000 ISA allowance, and around 4.4 million adults held cash ISAs but didn’t deposit anything in them.

Read more: How much can you put in your ISA and how big should it be?

It’s worth checking whether cash is sitting in accounts that could be more tax efficient. It’s also important to think about the timing of capital gains, and potentially how income is split between salary, investments (capital gains or dividends) and pensions. An adjustment could make better use of all the available tax allowances without changing your overall income, especially if you plan your finances as a couple.

Preparing for tax year end earlier rather than later makes it easier to get advice and avoid feeling the rushed as 5th April approaches.

If you’re unsure where to start, a financial coach can answer questions and help get you thinking more clearly ahead of tax year end. Book a free 15-minute consultation today.

What records do I need to keep for tax purposes?

The records you need to keep depend largely on how you pay tax.

Most employees pay tax through pay as you earn (PAYE), with income tax deducted automatically from their salary. Many people in this position never need to complete a tax return at all. However, if you’re self-employed, a company director, or you have significant capital gains or income, you’ll usually need to complete a Self-Assessment tax return. The deadline is 31st January for the tax year ending the previous April.

Good record keeping throughout the year makes this process far simpler. It’s sensible to keep records of income, dividends, pension contributions, investments you’ve sold and any capital gains. HMRC can ask to see records several years after the event, so it’s worth keeping everything on file.

What happens if I miss the Self-Assessment deadline?

Missing the Self-Assessment deadline can lead to automatic penalties – even if no tax is due. That’s why acting early is the safest approach. 

If there’s a genuine reason for missing the deadline, such as illness or technical problems, it’s possible to appeal and HMRC might lift a penalty. But simply forgetting or not understanding the rules is unlikely to be accepted an excuse.

With a clear view of your finances and some early financial housekeeping, the move into the 2026/2027 tax year need not cause any stress. 

Read more: How can you reduce your self-assessment tax return bill?