The UK tax year begins on 6 April each year. This date triggers a reset of key financial allowances — and is the best time of year to review and reframe your finances.
Here’s what to check and action at the start of each new tax year.
This article covers the 2026/27 tax year. For the 2025/26 tax year end checklist, see Tax Year End Checklist 2025/26.
Allowances That Reset on 6 April
| Allowance | 2026/27 amount | Notes |
|---|---|---|
| ISA allowance | £20,000 | Per person; unused amount lost if not used by 5 April 2027 |
| Junior ISA | £9,000 | Per child |
| Lifetime ISA | £4,000 | Under 40s only; counts toward £20,000 total; 25% bonus |
| Pension Annual Allowance | £60,000 | Or 100% of earnings; carry-forward possible |
| Capital Gains Exempt Amount | £3,000 | Gains below this level are tax-free |
| Dividend Allowance | £500 | Dividends up to £500 are tax-free |
| Annual Gift Exemption (IHT) | £3,000 | Unused portion can carry forward 1 year |
1. Open or Contribute to Your ISA
The new allowance is £20,000 from 6 April.
Starting contributions early in the tax year maximises time in the market (for Stocks and Shares ISAs) or time earning interest (for Cash ISAs). A discipline of early ISA contribution has historically produced better outcomes than waiting until 31 March the following year.
Quick calculation: Contributing £20,000 on 6 April 2026 vs 5 April 2027 gives your money ~12 months of additional tax-free growth.
Post-April 2024 rule change: You can now pay into multiple ISAs of the same type in the same tax year (e.g., two different Cash ISAs). The total across all ISAs still cannot exceed £20,000 per year.
Lifetime ISA reminder: You must open a LISA before your 40th birthday. The annual contribution limit is £4,000; the government adds 25% (up to £1,000/year). If buying a first home, hold for 12 months before use.
2. Check Your Tax Code
Your employer will have been issued an updated tax code for 2026/27 by HMRC. Check it on your first payslip in April.
Standard code: 1257L (reflects £12,570 Personal Allowance — frozen until at least 2028)
Reasons your code might differ:
- Benefits in kind (company car, private medical insurance — taxable as income)
- Unpaid tax from a previous year being collected
- Multiple jobs (second job often coded BR or D0)
- Marriage Allowance transfer to/from your partner
- High Income Child Benefit Charge adjustment
If your code is wrong: Contact HMRC via your Personal Tax Account or call 0300 200 3300. An incorrect code left all year costs you money.
3. Review and Set Up Your Pension Contributions
New Annual Allowance for 2026/27: £60,000 (unchanged from 2025/26)
Actions:
- Confirm your monthly pension contribution level with your employer
- If auto-enrolled, check the contribution rate and consider whether to increase it
- If self-employed, review SIPP contribution schedule for the year
- Use your State Pension forecast to check whether topping up NI makes sense
Salary sacrifice review: If your employer offers salary sacrifice pension contributions, these save you income tax and National Insurance on contributions. Worth reviewing at the start of each tax year.
4. Start Gathering 2025/26 Self Assessment Documents
The 2025/26 return is due 31 January 2027.
From April, you can start collecting:
- P60 from your employer (issued by 31 May)
- P11D (if you received benefits in kind — issued by 6 July)
- Bank and savings interest statements (many banks issue these in April/May)
- Dividend income statements
- Rental income and expense records
- Pension contributions (for higher-rate relief claims)
- Details of charitable donations made under Gift Aid
Starting in April means 10 months to prepare rather than a January scramble. File early and HMRC processes any repayment sooner.
5. Review Investments Outside an ISA
If you hold investments or savings outside an ISA:
- Are you using your £3,000 CGT Annual Exempt Amount? Could you realise some gains this year without tax?
- Is interest income at risk of exceeding your Personal Savings Allowance (£1,000 basic / £500 higher rate)?
- Should you move more savings into a Cash ISA or Stocks and Shares ISA to shelter future growth?
Annual ISA top-up discipline: Even if you can’t contribute the full £20,000, a regular monthly contribution (e.g., £250/month = £3,000/year) steadily moves money from taxable to tax-free over time.
6. Check Benefit Rates Have Been Updated
From 6 April, most social security benefits are uprated (usually by the September CPI figure). Check your award letters for:
- Universal Credit
- Child Benefit (now £26.05/week first child; £17.25/week additional children — 2026/27)
- PIP and DLA
- Working Tax Credit / Child Tax Credit (legacy claimants)
- State Pension and Pension Credit
If your benefit hasn’t increased — or you think you’re now eligible for something you weren’t before — contact the DWP or use benefits calculators to check.
7. Review Your Insurance
The new tax year is a natural annual review point:
- When do your insurance renewals fall due?
- Have your circumstances changed (new car, home improvements, new baby, salary increase) that affect cover needs?
- Are you paying loyalty penalties on auto-renewed policies?
Action: Set a calendar reminder for each insurance renewal date now so you have 3+ weeks to compare alternatives rather than auto-renewing.
8. Update Your Budget
If your pay has changed (salary review, new role, benefit changes), update your monthly budget:
- New take-home pay after tax code changes
- Updated pension contributions
- Childcare costs changes (DfE free hours updates often take effect September — plan ahead)
- Any debt repayments that have ended
A budget reviewed once a year at the natural April reset is often overlooked but valuable.
9. Check Your P800 or Simple Assessment
HMRC sends P800 tax calculations (or Simple Assessments) to employees who have overpaid or underpaid tax under PAYE — usually in June/July following the tax year end.
If you receive one, check it carefully. Underpayments will be collected through your tax code (and may reach you before you return). Overpayments can be reclaimed online within 45 days of issue.
10. Inheritance Tax Annual Gifting
Gift exemptions reset partly from 6 April:
| Exemption | Annual amount | Notes |
|---|---|---|
| Annual Exemption | £3,000 | IHT exempt immediately; unused amount carries forward 1 year only |
| Small Gift Exemption | £250 per recipient | Unlimited number of recipients; can’t combine with annual exemption for same person |
| Gifts on marriage/civil partnership | £5,000 (parent) / £2,500 (grandparent) | Per relationship |
If you want to reduce your estate for IHT purposes, the start of a new tax year is the time to action your gifting plan.
New Tax Year Checklist
| Action | Priority | Done? |
|---|---|---|
| Contribute to ISA (new £20,000 allowance) | High | ☐ |
| Check your new tax code on first payslip | High | ☐ |
| Review pension contribution level for the year | High | ☐ |
| Start collecting 2025/26 Self Assessment documents | Medium | ☐ |
| Review investments outside ISA | Medium | ☐ |
| Check benefit rates have been uprated | Medium | ☐ |
| Update your monthly budget | Medium | ☐ |
| Set insurance renewal reminders | Low | ☐ |
| Review IHT gifting plan (£3,000 annual exemption) | Low | ☐ |