With January’s celebrations already fading into the background, attention now turns to 5 April and the fast approaching end of the tax year.
The 2024 Budget reshaped the Chancellor’s fiscal timetable. The Office for Budget Responsibility (OBR) will now produce just one full assessment of the UK’s public finances each year, aligned with the Autumn Budget. As a result, the Spring Statement, scheduled this year for 3 March, will function largely as a brief update rather than a major fiscal event.
The tax year will still close on 5 April (which falls on Easter Sunday in 2026). Typically, many Budget measures take effect the following day, but 2026 will be an exception. Several policies announced in the 2025 Budget are not due to begin until 2028 or later. Even so, there is plenty to review now as part of your yearend tax planning. For example:
- Threshold planning:
The Budget left untouched the various quirks created by fixed income tax thresholds, including:
- The high income child benefit charge, which starts at £60,000 and ends at £80,000.
- The £100,000 threshold at which the personal allowance begins to taper (ending at £125,140), and the point at which entitlement to tax free childcare is lost entirely.
- As the tax year end approaches and your 2025/26 income becomes clearer, there may be opportunities either to avoid these thresholds or to benefit from the unusually high marginal tax relief they create.
- Inheritance tax (IHT):
The IHT nil rate band (£325,000) has been frozen for yet another year, now extended to April 2031. It has not risen since April 2009. This makes it even more important to use your annual gift exemptions, the £3,000 annual exemption, the £250 small gifts exemption, and the often overlooked but potentially most valuable exemption for gifts made from normal expenditure. - Marriage Allowance:
If you or your spouse/civil partner had income below the personal allowance in 2021/22 (£12,570, the level now frozen until April 2031), you have until 5 April 2026 to claim the Marriage Allowance for that year. The transferable amount is £1,260, which can reduce a tax bill by up to £252. The claim is only valid if the other partner was a basic rate taxpayer (starter, basic or intermediate rate in Scotland) in 2021/22. The same principle applies for subsequent years, meaning you could potentially reclaim more than £1,250.
There are many other areas worth reviewing, so professional advice is essential before taking action.
Tax treatment depends on individual circumstances and may change in future.
The Financial Conduct Authority does not regulate tax advice.
30th January 2026
