Make tax-savvy new year’s resolutions to cut stress and save money

Taxpayers are expected to save money and headaches in 2025 by committing to better tax practices next year, according to leading audit, tax and business consulting firm Blick Rothenberg.

“Most people make personal decisions about health and lifestyle, but your financial health is just as important – and being on top of your taxes plays an important role,” says Robert Salter, a director at the company.

With the 2023/24 tax return deadline set for 31 January 2025, Salter suggests that anyone who has not yet completed their filing should decide to do so earlier this year. “This will help you avoid stress and the risk of being hit with an HMRC penalty,” he says.

He also points out that taxpayers may be ignoring valuable exemptions, especially if they pay 40 or 45 percent tax. Gift aid contributions can provide immediate savings when claimed through a self-assessment tax return, and those made during the 2024/25 tax year can still apply for relief in the previous year if completed before filing.

According to Salter, retirement planning can also be a powerful pledge for the new year. Bonuses paid in February or March could be directed into the pension scheme through an employer contribution rather than being taken out in cash, which could reduce the overall tax bill.

For those looking to maximize their state pension, Salter highlights the National Insurance Contributions (NICs) facility which remains available until 5 April 2025. This allows people to plug any gaps dating back to 2006/07 and could boost future pension payments.

Another solution may be to review how investments are held, especially for couples where one spouse is a non-taxpayer or a low-rate taxpayer. Legally transferring assets to lower rate taxpayers can make the most of personal allowances and potentially reduce the overall tax burden.

Finally, Salter advises checking your PAYE tax code for 2025/26 to make sure any pension contributions, occupational contributions or benefits in kind are accurately reflected: “That way, you get the right tax relief straight away and avoid a shock bill when your return is made.”