Households are facing a year of eye-watering price rises, as energy costs continue to rise upwards and inflation continues to bite.
The price cap, which limits how much households can be charged for gas and electricity is rising by £ 693 next month as a National Insurance tax increase kicks in.
To ease the pain, the Chancellor will pay homes in AD bands a £ 150 council tax discount and everyone else will get a £ 200 energy loan.
For workers, some earners may now find they are exempt from the NI hike.
In all, it means it is time to get on top of your finances.
From claiming work from home tax relief to the marriage allowance, here are some important money moves you need to make now to get ahead of your cash from April.
1. Get £ 125 from the tax man
Millions of people who have worked from home over the past year have until April 5 to claim £ 125 worth of tax relief from HMRC.
The ‘work from home’ rebate applies even if you’ve only worked one day from home – and it’s easy to claim online.
The money – which can cover broadband and heating costs – will automatically be returned in your next pay slip with your tax code adjusted accordingly. You don’t need to submit receipts to make a claim.
The rebate is paid based on the rate at which you pay tax.
For example, a worker that pays the 20% basic rate of tax and claims tax relief on £ 6 a week, would receive £ 1.20 a week in tax relief (20% of £ 6 a week) towards the cost of their household bills.
You can claim £ 2.40 a week if you pay the higher 40% tax rate.
Over the course of a year, this means workers could reduce the tax they pay by £ 62.40 or £ 124.80.
If you miss the deadline, you won’t be locked out completely. HMRC told The Mirror you will have to claim it separately and will receive a lump sum payment instead. If you had to work from home because of the pandemic, you can currently back date it two years.
Find out how to claim the money back, here.
2. Make use of the marriage allowance
Millions of couples may be eligible for a £ 252 tax break thanks to a little known law that lets you share your allowance with your partner.
It’s known as the marriage allowance and allows anyone with an income of £ 12,571 or less to transfer up to £ 1,260 of their Personal Allowance to their husband, wife or civil partner – if their income is higher.
This reduces their tax by up to £ 252 for the 2021 to 2022 tax year. Claims can also be backdated four years to April 2018.
If a claim is backdated, the couple could receive up to £ 1,220 back.
Find out how to make a claim, here.
3. Top up your Lifetime Isa
The Lifetime Isa is one of the best savings options out there – and can get you free cash from the government to put towards your first home or retirement.
Through it, you can get up to £ 1,000 a year in the form of a government bonus up until the age of 50.
If you opened a Lifetime Isa at age 18, that is a maximum government bonus of £ 33,000 (or £ 32,000 if you’re unlucky enough to have your birthday on April 6).
The Lifetime Isa can be opened by those aged 18 up to the day before their 40th birthday, and you can save up to £ 4,000 each year – either in one or more lump sums or as a regular monthly saving.
You can withdraw Lifetime Isa money once you’ve reached age 60 or earlier to buy your first property, but any other withdrawals will involve a penalty – currently 25%.
The deadline to contribute for this tax year is April 5, 2022.
4. Check your child benefit entitlement
The high income child benefit charge (HICBC) leaves thousands of parents with a tax-bill every single year in the UK, but a little planning ahead could get on top of it.
All parents are entitled to child benefit, but as soon as one of them earns more than £ 50,000, the amount starts to fall. This is then completely withdrawn when they hit the £ 60,000 salary threshold (more on this here).
You can of course withdraw from the payments completely to avoid filling in a tax-return each year, but remember to do so via HMRC as otherwise it could affect your state pension credits.
If you’re earning just slightly over the threshold, there is one way around it – and that’s by increasing your pension contributions.
HICBC is based on your salary after any pension deductions. This means if you contribute enough to your pension to get your salary back to £ 49,999 then you’ll get the full child benefit again.
Another option is to make charitable donations from the income over the £ 50,000 limit, which you’ll need to declare to HMRC on your tax return.
Don’t forget child benefit payments are also rising next month.
5. Check your council tax
Households across the UK are facing huge council tax hikes from April as the cost of living crisis continues to bite.
The official cap on how much local authorities can increase council tax by is 5% – this is made up of a 2% council tax rise and an additional 3% for social care.
Councils can technically ask to charge more than this, but they have to hold a referendum with residents first.
Any new council tax rates always come in from the start of April, to tie in with the new tax year.
If you’re retired, live alone, are on benefits or are disabled, it’s worth checking if you can claim a discount.
Millions of people may also be on the wrong tax band. If you act now, you may be able to escape the rise entirely.
Alamy Stock Photo)
6. Boost your pension contributions
As with your Isa, it may be worthwhile considering topping up your pension to increase your savings for retirement where you can afford it.
When saving in a pension you receive income tax relief, depending on your personal circumstances.
The annual allowance for 2021/22 for pension contributions is £ 40,000. It’s also worth noting that you can bring forward unused allowances from previous three tax years, as long as you were a member of the pension scheme within those years.
If you’ve been automatically enrolled into a workplace pension, the window is about to open for any changes to your contributions including any active salary sacrifices.
You and your employer must pay a percentage of your earnings into your workplace pension scheme. These minimums are currently 4% from you and 3% from your employer. If you can afford to increase your payments, now is the time to do so.
7. Use up your Isa allowance
The 2021-22 tax year Isa allowance is £ 20,000 – and as usual, all returns are tax-free.
However, before you move your money or open an account, check that an Isa is the best savings type for you.
That’s because Isas are in addition to the Personal Savings Allowance (PSA) which came into effect on April 6, 2016.
If you’re a basic rate taxpayer you can earn up to £ 1,000 in savings income tax-free. For higher rate taxpayers, this is £ 500.
In short, this means you can choose a non-Isa savings account and still benefit.
For example, if your current account provider has a savings account with a high rate, you might find it more convenient to pop your cash in there instead. Either way, it’ll be tax-free.
If you’re opting for an Isa, you’ll need to move your money before April 5 to take advantage of the full tax-free year.
8. Claim back cash for work uniform
Millions of hospital workers, shop staff and hairdressers are unaware they could get their expenses back from HMRC if they’ve had to pay for uniform in the past tax year.
It’s simple to claim and the average payout is around £ 60.
You can find out exactly how much you are owed by following the steps on this online tool – each claim takes around three weeks.
Who can claim it?
You might be able to claim tax relief if:
What can I claim it on?
Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
Business mileage (not commuting)
Travel and overnight expenses
Professional fees and subscriptions
9. Council tax
Bill-payers are being advised to set up a direct debit for their council tax payments before April to ensure they receive the £ 150 rebate on time.
The Energy Rebate scheme was announced by the Chancellor earlier this month to help people cope with rising energy bills.
It will see eligible households in England in Council Tax Bands AD properties receive a £ 150 energy rebate payment from their council from April this year.
This includes those who already receive help with paying some or all of their council bill through local council tax support.
Cllr Shaun Davies, chair of the Local Government Association, said: “Having a direct debit set up will mean councils can automatically pay the £ 150 energy rebate straight into your bank account. It is quick and easy to set up to pay council tax by direct debit via your council’s website.
“You can still get the money if you don’t have a direct debit set up, but it could take longer as your council will have to contact you and then you’ll have to make a claim.”