Introduction to Tax Planning 2024/25

The new tax year brought some good news for employees, with a second two percentage point reduction in the main rate of employee national insurance contributions (NICs) to 8%, with the main rate for the self-employed falling from 9% to 6%. There is also a welcome increase to the income threshold for liability to the high income child benefit tax charge.     

The bad news is that personal tax allowances and income tax bands remain frozen until April 2028, and this will effectively raise taxes by the operation of inflation. Landlords are also being targeted with the removal in 2025 of the tax advantages associated with furnished holiday letting. Taxpayers in Scotland face a newly introduced advanced rate of 45% on non-savings and non-dividend income between £75,000 and £125,140 (5% higher than what is payable on equivalent income elsewhere in the UK), plus an increased top rate of 48%. 

State pensions have risen by 8.5%, with other benefits seeing a 6.7% uplift. These increases now look quite generous given the average rate of inflation has fallen to just over 3%. Employee retention remains a key challenge for employers, so anything you can do to keep your employees happy will help your business.    

Personal and family planning


1 Check your PAYE tax code.  
HMRC changes PAYE tax codes dynamically when your salary changes, but it can’t easily distinguish between a temporary increase, such as a bonus, and a permanent pay change. Your tax code may also include estimated amounts of savings income, based on what you received in an earlier year. Check your PAYE code by signing into your personal tax account at and use the options there to amend any estimated income and correct any other errors.  

2 Transfer some of your unused personal allowance.  
Married couples and civil partners can transfer 10% of their personal allowance between them (£1,260 for 202 /25), providing an overall tax saving for the couple. This transfer is not permitted if the recipient pays tax at a rate higher than the basic rate of 20% (higher than the intermediate rate of 21% for Scottish taxpayers). You can backdate a claim for up to four years, so a claim made by 5 April 2025 can include 2020/21. 


Leila receives an annual salary of £45,000. Her husband has no taxable income, so doesn’t use his personal allowance. For 2024/25, they could save tax of £252 (£1,260 at 20%) by transferring 10% of the husband’s personal allowance to Leila. 

3 Check how much NICs you pay.  
If you have two or more concurrent jobs you may pay more NICs than you need to. You can reclaim any overpaid NICs from HMRC after the end of the tax year. However, you can prevent the overpayment occurring in the first place by deferring payment of NICs on one of your jobs. To do this, send HMRC a completed form CA72A (either online or by post) by 14 February in the tax year, but ideally earlier. 

4 Top-up your state pension entitlement. 

Check your NIC record for your entire working life in your personal tax account at If there are gaps in that record you may not be entitled to the full state pension. Until 5 April 2025 you can fill any gaps in the NICs paid since April 2006 by paying voluntary class 3 NICs. After that date only gaps arising in the past six years can be filled in this way.    

5 If you and your partner both own homes when you marry or enter a civil partnership, choose which will be your main home.  
Once married, you can have only one main home between you for tax purposes. If you both own separate properties which you continue to occupy for some periods, nominate the one that is likely to make the best use of your capital gains tax (CGT) main residence exemption. This needs to be done within two years of your marriage/civil partnership, otherwise HMRC will designate the property that you occupy for the majority of your time as your main residence. 


If a property has been your nominated main home at any time, the gain for the last nine months of ownership is exempt from CGT (see tip 18). 

6 When selling a home, be prepared to pay any CGT due within 60 days of the completion date.  
If you sell or give away a UK residential property, you must report and pay any CGT due to HMRC within 60 calendar days of the completion date. This is done via an online UK Property Account, with a separate declaration of the same gain also required if you have to submit a self-assessment tax return. If there is no tax to pay you don’t have to report the sale on the UK Property Account, but you may still need to include it in your tax return. Penalties may be charged for reporting late and/or paying the CGT late. 


7 If you or your partner receive child benefit, check whether you have to pay a tax charge to pay back some of the child benefit received. 
Since 6 April 2024, where the highest earner in the family has income over £60,000, the extra tax charge for that person is equivalent to 1% of the child benefit for every £200 of their income over £60,000. Once income reaches £80,000, the charge is 100%. Therefore, the child benefit claim is effectively reduced to nil. To mitigate the tax charge, you can halt your child benefit payments, but keep the claim alive to protect the claimant’s state pension entitlement.  

If the income of the higher earner has fallen below £60,000, you can ask HMRC to start paying the child benefit again. Don’t delay, as the payments can only begin from the Monday after you ask HMRC to reinstate them. 


Anna receives child benefit in respect of her two children and until recently made an annual profit of £80,000 from her self-employment. Some years ago she asked HMRC to halt her child benefit payments so she didn’t have to pay the tax charge. Anna predicts her net profit will be around £55,000 for 2024/25. On 5 April 2024, Anna asked HMRC to restart her child benefit and those payments will be made from 8 April 2024.  

8 Plan to minimise tax when selling your trading company by spreading the shareholding between you and your spouse.  
If you both meet the 5% shareholding test for two years or more before the sale and are both either an officer of the company or employed by it, you should both qualify for the 10% rate of CGT on any gains made when the company is sold. This reduced rate of CGT applies to the first £1 million of gains made on the disposal of qualifying business assets during each person’s lifetime.  

9 Don’t pay too much income tax on account in July and January. 

If your income is reducing, perhaps because you are winding down to retirement, the payments on account of tax due by 31 July and 31 January may be too high as they are based on your taxable income for the previous tax year. You can apply to reduce the payments on account through your personal tax account or on your tax return. If you believe you have paid too much tax on account for 2023/24 submit your tax return as soon as you can to receive an early tax repayment. 


Estimate your income for 2024/25 and if this is likely to be less than £80,000, ask HMRC to restart your child benefit payments. 

This publication is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The Financial Conduct Authority (FCA) does not regulate tax advice, so it is outside the investment protection rules of the Financial Services and Markets Act and the Financial Services Compensation Scheme. This publication represents our understanding of the Finance  
(No 2) Bill 2024, the Budget (Scotland) Act 2024 and law and HM Revenue & Customs practice as at 1 May 2024. All rights reserved.