End of tax year deadlines and what they mean for you

The tax year has an impact on how much you can save tax-free each year, here’s everything that you need to know.
End of Tax Year
Reading time: 4 mins

Each tax year runs from April 6th through to April 5th the following year, something that was decided by the British Treasury back in 1752 and has stayed the same ever since. We won’t bore you with the reasons why, but we will tell you what this means for your current investments.

The most obvious impact on you, is that the end of the tax year is when your current allowance runs out. Here is what the tax year end means to anyone who holds an ISA, Junior ISA or Personal Pension.

What the tax year end means for your ISA
Each year, you’re given an allowance by the government for the amount of money you’re able to save tax-free. Currently, this is set at £20,000, and each year you can open one of each type of ISA:

  • Cash
  • Stocks and Shares
  • Lifetime
  • Innovative Finance

It’s worth mentioning that the Lifetime ISA has a limit of £4,000 a year which is included in your £20,000 allowance, but all other ISAs allow you to top up the full amount, if you wanted to. However, you can always spread your annual allowance across different ISA types, for example, £10,000 in Cash and £10,000 in a Stocks and Shares ISA.

The end of tax year is also the end for your ISA allowance. So, if you haven’t used the full amount it could be worth adding to your ISA. It doesn’t matter if this is hundreds or thousands, as everything that’s added will be tax-free for as long as it remains in your ISA.

What if I can’t use my full ISA allowance?
Don’t worry, this is a huge allowance to use, and most people probably aren’t able to max out an ISA each year. The beauty of an ISA is that everything you put in is, and stays, tax-free. So, if you put £1,000 in your ISA this year, you’ll still have a £20,000 limit next year but with £1,000 already shielded from the tax man.

And this is what the end of a tax year means for ISA holders. It’s another chance to save in a tax-efficient way. This resetting is especially important, because say you managed to save £5,000 a year, you would max out your annual ISA allowance in just four years. But thanks to new tax years resetting this limit, you could save £5,000 tax-free in an ISA every year for 10, 20 or 30 years and keep building up your pot.

Don’t forget, ISAs also come in child-size, and the Junior ISA tax year also reset on the 6th April. The Junior ISA allowance 2019/20 was set at £4,368. However, the government has increased the allowance to £9,000 a year for children for 2020/21.

When is the last payment into an ISA this tax year?
We can’t talk for everyone, but at Wealthify we’ll process all electronic ISA contributions made, up until midnight on the 5th April of the current tax year. This also applies to any one-off direct debit mandates that are set up in the current tax year, helping to give you the full year to contribute to your Stocks and Shares ISA with us. If you wish to pay in by cheque, we’ll need to have received this by midnight 5th April and it will need to be eligible to be banked immediately in order for it to contribute to the current tax year.

The money may not hit your Plan straight away, but as long as the payment was made prior to this cut-off, we’ll make sure that it slots into your allowance.

What does the tax year mean for pensions?
The tax year also applies to your personal pension. This may come as a surprise to some, as there’s technically no limit to how much you can put in each year. But in terms of tax efficiency, you can put up to £40,000 or 100% of your income - whichever is lower - into your pension each year - this is your pension annual allowance. It’s important to note that this amount includes all pension contributions – from you, an employer and the government. With tax relief being added to all contributions, this amount is theoretically 25% easier to achieve.

Just like with an ISA, this limit resets on the 6th April and you have access to your entire allowance again. Everything you’ve managed to save into your pension will stay tax-free for as long as it stays in your account – when it comes to taking from your pension later, you’ll receive 25% of the total amount tax-free, but the rest will be charged at the income rate for that amount.

When is the last payment into a pension this tax year?
This is a little bit different to our ISA, and there are a number of different deadlines that depend on your payment method. The very latest a payment date to be eligible for the current tax year of 2019/20 is Thursday 2nd April, and to receive pension benefits this amount would have had to be received by 27th March.

There are some differences in payment dates for different methods, these are as follows:

  • Direct Debit Mandate - set up by Friday 20th March 2020
  • Cheque payments – received by us before Tuesday 24th March 2020
  • Bank Transfers – can take up to five working days, cut off is likely 30th March 2020

If you have any questions about what the end of the tax year means for your investments with Wealthify, then please get in touch with our Customer Care team through our Help Centre.


Your tax treatment will depend on your individual circumstances and it may be subject to change in the future.

With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.

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