When is the new tax year 2024? When UK tax year 2023/24 ends, dates, last day - what does it mean for finances

The tax year in the UK is a crucial period that affects both individuals and businesses, defining when taxes are assessed and collected by HM Revenue & Customs (HMRC).

Understanding the start and end dates of the tax year is essential, whether you’re employed, self-employed or running a business.

One of the key aspects of the new tax year for employees is the adjustment of tax codes and allowances. Employers use these tax codes to calculate the amount of tax to deduct from their employees' pay.

For the self-employed, the start of the new tax year brings several considerations. They must assess their business performance from the previous tax year, reconcile their accounts, and prepare for the submission of tax returns and payments.

As for the impact on households, the start of the new tax year may result in changes to individuals' take-home pay and overall tax liabilities. Depending on adjustments made by HMRC to tax rates, thresholds and allowances, some households may experience savings, while others may face increased tax burdens.

But what can you expect from the tax year 2024/25, when does it start, and what does it mean for your finances? Here is everything you need to know about it.

When does the new tax year start in 2024?

In the UK, the tax year runs from 6 April of one year to 5 April of the following year. That means that in 2024,the start of the new tax year falls on Saturday 6 April.

What does it mean for my finances?

The commencement of the new tax year on 6 April marks a fresh financial cycle for taxpayers across the UK. It's a time when HMRC updates tax codes, allowances and rates, impacting the income and financial responsibilities of millions.

For employees, understanding the implications of the new tax year is crucial as it directly affects their pay packets, tax obligations and potential savings. Self-employed individuals, on the other hand, need to prepare for changes in tax regulations and allowances that may influence their business operations and financial planning.

In 2024, Some households will see boosts to their income or have new savings options to choose from as April gets under way.

Many will be grappling with April price hikes to their regular bills, but with a new tax year starting from April 6, some changes during the month may ease part of the strain. Around 170,000 families will be taken out of paying a tax charge.

The Government will increase the threshold at which the high income child benefit charge kicks in, from £50,000 to £60,000, from April.

The charge had been triggered when one parent in a household claiming child benefit has taxable income of £50,000 or more – but the threshold has been criticised for falling unfairly on the shoulders of single parents, as it is based on the income of the highest earner.

The rate at which the fee is charged will also be halved from 1% of the child benefit payment for every additional £100 earned above the threshold, to 1% for every £200. This means that child benefit will not be withdrawn in full until a parent is earning £80,000 or more.

Overall, the Government has estimated that 485,000 families will gain an average of £1,260 towards the costs of raising their children in 2024/25 and that 170,000 families will be taken out of paying the tax charge.

Read more: April money: benefits and savings changes in new tax year - from child benefit to ISAs

National insurance (NI) will ALSO be cut in April, with the main rate of employee national insurance cut from 10% to 8% from 6 April. When combined with a cut previously announced in the autumn statement, this will save the average worker on £35,400 more than £900 a year, the Government has said.

The main rate of self-employed national insurance will also be trimmed down. The main rate of Class 4 NI contributions for the self-employed will be reduced to 6%. When combined with the abolition of the requirement to pay Class 2, this is expected to save a self-employed worker earning £28,000 around £650 a year.

But some thresholds may act as a “stealth tax” and make people feel worse off just by being left unchanged. Frozen income tax bands pull people into higher brackets over time as their pay increases.

The standard personal allowance is £12,570, which is the amount of income that someone does not have to pay tax on.

Basic rate taxpayers can earn up to £1,000 in savings interest before paying tax, under the personal savings allowance. But recent rises in savings rates may push some people into paying tax.

This could make Isas, which are ringfenced from tax, a more attractive option for some savers.

What do I need to do?

Staying informed about changes in the UK tax system is crucial for individuals, whether they are employed, self-employed or managing household finances. Here are some things to bear in mind as we head into the new tax year.

If you are employed

Keep an eye on any updates to your tax code, as this directly affects the amount of tax deducted from your pay. You can find your tax code on your payslip or through your HMRC online account.

Understand any changes to tax allowances and rates that may impact your take-home pay. HMRC publishes updates on their website, and financial news outlets often cover changes in tax legislation. NationalWorld has a guide here.

Your employer may provide resources or information sessions on tax matters. Take advantage of these opportunities to stay informed and understand how tax changes affect your employment situation.

If you are self-employed

Maintain accurate records of your business income, expenses and receipts throughout the year. This will make it easier to prepare your tax return and ensure you claim all eligible deductions.

Consider consulting with a tax adviser or accountant who specialises in self-employment taxation. They can help you navigate complex tax regulations, identify opportunities for tax savings and ensure compliance with HMRC requirements.

Mark key tax deadlines, such as the deadline for filing self-assessment tax returns, on your calendar. Missing deadlines can result in penalties, so staying organised and prepared is essential.

For households

Keep abreast of any changes to benefits and tax credits that may affect your household income. This includes changes to eligibility criteria, payment amounts and application procedures.

Take the time to review your household budget regularly, considering factors such as changes in income, expenses and tax obligations. Adjust your budget as needed to accommodate any changes in your financial situation.

If you're unsure about how tax changes will impact your household finances, don't hesitate to seek support from resources such as Citizens Advice or financial advisers. They can provide guidance and assistance tailored to your specific circumstances.