Q. What things do I need to do before April 5th as a freelancer?

April 5th is the end of the UK tax year - this is a point at where a lot of things reset or come to an end, such as the 2024/2025 tax year, your allowance for pension contributions, payments in to an ISA, personal tax allowances etc.

Whilst 2024 was a very challenging financial year for many, you might have a little bit of spare cash lying around in your business, which you can use effectively if you know how (or lose if you don’t before April 5th).

Pension Contributions

Despite only 20% of self-employed individuals in the UK were contributing to a pension, they’re a really tax efficient way of saving and reducing your tax bill.

Basic rate tax payers receive 20% tax relief, whilst higher rate tax payers can reclaim 20% or 25% through their self-assessment.

If you’ve not already setup a pension, there’s still time, and many pension schemes allow you to pause contributions if times are harder.

There’s a useful guide here: Pensions for self-employed people

And consider providers like Penfold, PensionBee and NEST.

ISA Contributions

Every adult has a £20,000 allowance to put into an ISA each tax year, which is a tax-free way of saving money. ISA allowances don’t roll over, so if you don’t pay into the ISA before April 5th, you’ll lose the opportunity to benefit from the tax breaks. So even if you might be a bit low on cash, it can be worth considering whether to make a contribution.

Lifetime ISAs might also be an option for you, if you’re aged between 18 and 39. Like other types of ISA, any money held within the Lifetime ISA will not be subject to UK income or capital gains tax.

But a major benefit of the Lifetime ISA is that the government pay an extra 25% on top of your contributions.

You can put up to £4,000 into a LISA per tax year, and it’s not too late to open an ISA.

Compare the market for good options, using tools like Money Saving Expert.

Making large purchases

If you’re planning to spend some money on purchasing some larger priced items for your business, then it would be worth doing so before the end of the tax year.

Bigger spends like laptops, phones, cameras, etc - any assets which provide a benefit to your business for longer than a year are classed as capital items, and of course are an expense which will likely be offset against your profits in the tax year, reducing your tax bill.

Equally smaller purchases like stationery, or purchasing services for your business, like web design, getting those done before the April 5th deadline means you’ll benefit from the cost being accounted for in this year.

Remember that only items which are used wholly and exclusively for your business can generally be claimed as a business expense.

Make use of your business allowances

If you’re a limited company, and you haven’t used your £150 allowance for social functions, i.e. parties, perhaps throw yourself a bash!

As an employer, you’re entitled to host an annual social function, open to all employees, costing no more than £150 per head.

You can even bring a family member!

Keep on top of your records

This time of year is a good point to also check you’re not owed any payments from clients, and once April 5th has past, you’ll need to start gathering your notes to start completing your self-assessment tax return, or if you’re a new freelancer, register for self-assessment.

If you’re not already working with an accountant, it can be a worthwhile time to get a little bit of advice, and see where a professional could save you time and money!