New tax year: what resets on 6 April, and what to settle first

The UK personal tax year runs from 6 April to the following 5 April. The new tax year therefore starts on 6 April, bringing fresh allowances and a fresh set of rates. That boundary comes from an eighteenth-century calendar change rather than from anything to do with tax.

The ones that do not carry forward, and they are the reason March feels busy. The ISA subscription resets each year, and any unused portion simply vanishes. The capital gains annual exempt amount behaves the same way, so an unused allowance cannot be banked for later.

GOV.UK sets out how ISAs work, including the annual subscription.

GOV.UK publishes the capital gains allowance for the current year.

So both deserve a decision before 5 April, though not necessarily a yes.

Pension annual allowance, within limits. Unused allowance from earlier years can sometimes be carried forward, which makes pension contributions the most forgiving item on the March list and the least urgent to rush.

GOV.UK explains the annual allowance and how carry forward operates.

Capital losses also carry forward once you have reported them, which people forget.

So the rush applies to a shorter list than most year-end articles imply.

HMRC issues a code for the new tax year, and it reflects what HMRC currently believes about your income. That belief often lags reality, particularly after a pay rise, a job change or a year with unusual income. A wrong code does not change the tax you owe overall.

However, it changes what leaves your pay packet each month.

So an incorrect code at the start of the year costs you cash flow for months before anything corrects itself.

Checking the code when it arrives takes minutes and saves a long wait for a refund.

The return for the year just ended falls due on 31 January following, if you file online. Meanwhile payments on account land on 31 January and 31 July, so they sit inside the year rather than at either edge of it.

GOV.UK publishes the Self Assessment deadlines.

So nothing is actually due on 6 April itself, which surprises people.

Our deadline calendar keeps the British and American dates in one view.

Because two standard British moves can create an American bill. Filling a stocks and shares ISA usually buys British funds, and those count as passive foreign investment companies for US purposes, which brings a punitive regime and extra reporting.

Realising gains to use the British allowance causes the second problem.

Doing so means little or no UK tax arises, which leaves nothing to credit against the American charge on the same gain.

So the move can create a pure US cost. Our guide to year-end planning across two systems works through both.

It can, because UK residence gets tested year by year under the statutory residence test. Day counts reset, ties get reassessed, and somebody who was resident last year may not be resident this year.

That matters more than the allowance questions for anyone moving.

So if your pattern of travel is changing, settle the residence question before worrying about an ISA.

Our guide to the statutory residence test sets out how the tests fit together.

Start the record-keeping you will want next January, while the year is still empty and the habit is cheap to form. People who do this spend an afternoon on their return rather than a fortnight.

Check the new tax code against what you actually expect to earn.

Set up whatever you intend to contribute regularly, rather than deciding again next March.

Also note anything unusual coming up, such as a property sale or a share vesting, because those benefit from early planning.

Often, though not uniformly, and announcements do not always take effect immediately. Some changes apply from the start of the new tax year, while others start later or phase in over several years.

Scotland sets its own income tax rates and bands for non-savings income, so Scottish taxpayers face a different table.

GOV.UK publishes the current rates and allowances.

So checking the published figure beats relying on last year's number or on a headline.

A short sequence covering the fortnight either side of 6 April.

They continue, and they confuse people because they do not line up with the year boundary. Payments on account fall on 31 January and 31 July, and each one is an advance against a year that has not finished.

So the July payment lands months into the new tax year.

Our guide to payments on account explains how they are worked out.

You can ask to reduce them where your income has fallen. However, reducing them too far brings interest.

Then the year brings your first registration deadline, and it falls later than people expect. Registration is due by 5 October following the end of the tax year in which you started.

So a business begun in May has until the following October.

Our guide to registering for Self Assessment covers who must register.

Leaving it later than that risks a penalty, even where no tax turns out to be due.

Scotland sets its own rates and bands for non-savings, non-dividend income. So a Scottish taxpayer faces a different table from the rest of the UK, and the year can change it.

Residence decides which table applies, not where you work.

So moving across the border changes your rates even if your job does not change.

The published rates confirm the current position each year, and relying on last year's figures is the usual error.

No. Each tax year brings one subscription limit, and the unused part does not roll into the following year. That is why March sees so much activity. So the allowance works on a strict use-it-or-lose-it basis, which is why advisers push it so hard in March.

However, money already inside an ISA stays there and keeps growing.

So the deadline applies to new money, not to the account.

For an American filer, the contents question matters more than the deadline. A rushed subscription into funds is the expensive version of this decision.

Then split-year treatment may divide the year, so Britain taxes only part of it. That claim depends on facts rather than applying automatically, and the facts need recording at the time.

Allowances also behave differently in a year you leave.

Our guide to leaving the UK in your final year covers what to settle before going.

So if a move looks likely, the residence question outranks every allowance question on the March list.

Often, yes. The return for the year just ended can go in from 6 April onwards, and filing early does not bring the payment date forward. So the only thing early filing costs you is the time, and it buys months of certainty about the number.

So you learn the number months before you have to pay it.

That alone makes early filing worth it for anyone whose income varies.

In our practice, the people who file in April spend far less time on it than those who file in January.

It resets with the year and applies automatically, so nothing needs doing. However, it tapers away once your adjusted net income passes a threshold, which catches higher earners by surprise.

GOV.UK explains adjusted net income and how it is worked out.

Pension contributions and Gift Aid both reduce that figure.

So two of the March moves can restore part of an allowance that would otherwise taper away.

Allowances for savings interest and dividends reset with the year, and the rates that apply sit alongside the main income tax bands rather than inside them. Both allowances are separate from the personal allowance, and both are easy to overlook until a bank statement arrives.

So the order in which income stacks matters.

For an American filer, both kinds of income are reportable in the US regardless of any British allowance.

That is the usual pattern. A British allowance removes British tax and leaves the American position untouched.

The ones you will want next January, gathered as the year goes rather than reconstructed at the end. Payslips, interest statements, dividend vouchers, donation receipts and any disposal paperwork cover most of it.

Doing this from 6 April costs a few minutes a month.

Our document checklist sets out what tends to be needed.

So the turn of the year is the cheapest moment to start, because the file is still empty.

No, and that is the central difficulty. The American year runs to 31 December, so it closes more than three months before the British one does. People moving from one system to the other often assume the two boundaries roughly align. They do not.

So one British year straddles parts of two American years.

That means figures rarely map across cleanly, and apportionment is often needed.

So figures rarely map across cleanly, and apportionment is often needed before either return can be finished.

Then you have to file, even where no tax turns out to be due. A notice creates the obligation on its own, and ignoring it brings penalties regardless of the eventual figure.

So open it when it arrives.

If you believe the notice is wrong, you can ask HMRC to withdraw it.

However, until they do, the obligation stands and the deadline keeps running.

Longer than most people expect, and the two countries ask for different periods. Britain sets its own minimum, and the American side runs its own clock, so the longer of the two effectively governs a cross-border household.

Some documents outlive both rules entirely.

Purchase records for property and investments matter decades later, when you sell.

Our guide to tax records sets out what to keep and for how long.

Then several things move at once, and most of them need telling. A large rise can taper your personal allowance, trigger the child benefit charge, and push payments on account upwards.

A sharp fall causes the opposite problem.

You may be paying on account against income you no longer earn.

So tell HMRC in either direction. The system does not notice on its own, and the correction is far easier made early.

Mostly through the credit. British allowances reduce British tax, and British tax feeds the credit claimed against the American charge on the same income. So a British saving can move the bill between countries rather than removing it.

So a British saving can shift rather than disappear.

That is not a reason to skip the allowances.

It is a reason to check both returns before acting, which is the recurring theme of every March list for this audience.

Consider an American in Edinburgh whose adviser sends the usual March reminder. Use the ISA, realise gains to the annual exempt amount, consider a pension top-up.

She makes the pension contribution, which works on both sides. She skips realising gains, because the British allowance would cover them and leave nothing to credit against her American charge.

For the ISA she subscribes in cash rather than funds, which keeps the British saving without creating PFIC reporting.

These figures are illustrative. However, the pattern holds generally: one item proceeds, one gets skipped, and one changes shape.

The first treats every allowance as equally urgent. Pension carry forward means some decisions can wait, and knowing which saves a scramble.

The second ignores the tax code for the new tax year, then waits months for a refund that a five-minute check would have prevented.

The third applies British March advice without testing the American consequence. Two of those moves regularly cost more than they save.

The fourth forgets to report capital losses, which quietly removes relief that would otherwise have carried forward.

We check the British March list against the American consequence before anybody acts, so the moves that work proceed and the ones that cost money do not.

We also review the code HMRC issues, which is the cheapest correction available in any year.

Our UK Self Assessment service covers the filing, and fees stay fixed and agreed in writing beforehand. How we work sets out the process.

If you would like your own March list checked, talk to us well before 5 April.