See how to maximise your allowances from your savings to your pension pot and also get your head around some key tax terms.
Keep in mind, tax rules can also change and any benefits will depend on your individual circumstances.
In the current tax year, you can save up to £20,000 in a tax-efficient Individual Savings Account (ISA). You can either save money in one ISA or split it between a cash ISA and a stocks & shares ISA. There are other types of ISAs available, each with different limits and restrictions.
If you already have an HSBC ISA but didn’t make payments in the previous tax year, you’ll need to reactivate it before you can pay in any more money.
Find out how to:
Please note an InvestDirect stocks & shares ISA requires a fresh application to be made each tax year.
Depending on the type of ISA you have, it may take a few working days to reactivate it, so please allow plenty of time.
If you open, or already hold, a Junior ISA, or you already hold a Child Trust Fund (CTF) for a child, you can save up to £9,000 in the current tax year without paying any UK income tax or capital gains tax on any income or gains arising.
Most people can now add up to £60,000 to their pension pot each year, tax-free – or up to 100% of their earnings if they earn under £60,000 a year. This means the total sum of any personal contributions, employer contributions and tax relief can’t usually exceed the £60,000 pension annual allowance. This allowance has gone up in 2023-2024 from £40,000.
If you haven’t reached this limit, you may want to consider adding more to your pension from your pre-tax income. Keep in mind you might not be able to access this money until you’re at least 55 years old (or 57 from 2028). Find out more about tax relief on pension contributions.
You might also like to read how much you need to retire and how workplace pensions work.
This allowance has been reduced in 2023-2024. It means you can sell investments, property and other assets in the current tax year without having to pay any tax on the first £6,000 worth of gains. Previously, it was £12,300.
Keep in mind, you can’t carry over any unused capital gains tax allowance to the next tax year. So if you’re planning to sell assets that would make you more than £6,000 in profit, it might be worth staggering the sale over 2 tax years.
A tax code lets your employer or pension provider know how much income tax you need to pay. Check your tax code is correct online or by calling HM Revenue & Customs (HMRC)).
If your employer or pension provider doesn’t have a tax code from HMRC, it has to apply an emergency tax code. If this happens, you might have more tax deducted from your earnings or pension than necessary.
But don’t worry, emergency tax codes are temporary. Your employer or pension provider should receive a tax code from HMRC quickly.
Tax credits are extra funds given by the government. There are two types:
Find out if you should be receiving tax credits by contacting HMRC.
As part of your annual tax summary, you’ll also see National Insurance (NI) contributions. If you’re over 16 and earn more than £242 a week from your employer or £6,725 a year if you’re self-employed, you’ll need to pay National Insurance.
These contributions go towards initiatives such as the State Pension, maternity pay and the Jobseeker’s Allowance.
If you need a certificate of interest (tax certificate) to complete your tax self-assessment, please send us a secure e-message in online banking or by using chat in the mobile banking app.
The certification of interest confirms the total amount of credit interest paid into an account over the tax year.
Once we receive your request, we’ll post this to you within 7 working days.
