Your guide to the end of tax year

When does the tax year end?

The 2022-2023 tax year ends on 5th April 2023. At this point, your tax-free allowances for any tax-wrapped accounts, including Lifetime ISAs and Stocks & Shares ISAs, will reset. 

If you have a Moneybox Lifetime ISA or Stocks & Shares ISA, any deposits made before midday on 5th April 2023 will still count towards your 2022/23 tax year allowance. Or, you can make an instant bank transfer up until 3pm on 5th April – so there’s still time to maximise your 2022/23 tax-free allowance. 

 

2022-2023 end of tax year timings

The 2022/23 tax year started on 6th April 2022 and will end on 5th April 2023. After this, the 2023/24 tax year will begin, and it’ll run from 6th April 2023 until 5th April 2024.

 

What is the end of tax year?

The end of the tax year is when your tax-free allowances reset. In the UK, you get an annual tax-free allowance of £20,000 to save or invest, and this allowance is shared across your tax wrappers – which are also known as individual savings accounts (ISAs). Examples include the Cash Lifetime ISA, which is great if you’re saving for your first home, and Stocks & Shares ISA, which you can use to take the first step on your investing journey.

These accounts have different limits on how much you can save or invest. For example, a Lifetime ISA is capped at £4,000 each tax year, while a Stocks & Shares ISA has a limit of £20,000. But, because the allowance is shared, if you put the full £4,000 into a Lifetime ISA, you’ll have a remaining allowance of £16,000 to put into a Stocks & Shares ISA – if you have one. And remember, your annual tax-free allowance doesn’t roll over – you either use it, or you lose it once the allowance resets.

 

What to do before the tax year ends

Here are some things you can do to make sure you can make the most of your tax-free allowance when it resets.

 

Top up your tax wrappers

If you’re able, you should aim to maximise any deposits you can make into your tax wrappers before the end of each tax year. Putting in as much as you can means that you’ll get the most out of each annual allowance – which will hopefully help you reach your financial goals sooner.

Plus, if you’ve only got a Lifetime ISA or a Stocks & Shares ISA, why not open the other one before the tax year ends? Just keep in mind, the deadline to open a new account in the 2022/23 tax year is 11am on 5th April.

• With the Moneybox Cash LISA, you’ll earn 3.50% AER (variable) on any money you deposit to help you buy your first home faster.
• With the Moneybox Stocks & Shares ISA, you can hold money as cash and earn 3.25% AER (variable) until you’re ready to invest it in our range of funds and stocks.

A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.

 

Pay into your pension

You should also look at your pension contributions before the tax year ends. Each tax year, you can deposit £40,000 or money equal to your salary – whichever is lower – into your pension to set yourself up for retirement. This can also be lower if you are subject to the £4,000 annual pension allowance. And, the government will give you tax relief as a 25% top up on any money you add up to your individual pension limit.

But, if you don’t use your full allowance of £40,000, you can carry it forward to next year, which helps you to get the full benefit of tax relief. This ‘carry forward’ applies to the past three years of unused allowances – just as long as you had a pension during that time.

Why not check out the Moneybox Personal Pension if you haven’t already. Our team can help to find your old or lost workplace pensions and bring them all together into one, easy-to-track pot.

Just make sure you compare the charges, investment options and benefits between Moneybox and your old provider before transferring. We also can’t accept a transfer from a pension that your current employer is paying into.

 

Please note, instant bank transfers are not supported for all banks, and can take up to 24 hours.

All investing should be long term (min. 5 years). The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and is subject to change.

As with all investing, the value of your pension can go up and down, and you may get back less than you invest. Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to age 57 from 2028). Tax treatment depends on individual circumstances and is subject to change.