Avoiding Halloween’s Tax ‘Tricks’ and Making the Most of the ‘Treats’

A timely reminder: tax doesn’t have to be frightening

Stefanie Tremain, Partner, warns:

It’s not just ghosts and ghouls that keep you awake at night, your taxes can be the stuff of nightmares too.

The UK tax system is full of both opportunities (“treats”) and pitfalls (“tricks”). Understanding how to use legitimate reliefs and avoid costly errors can make a meaningful difference to both individuals and businesses – particularly as the self-assessment deadline looms.

Policy context: complexity and opportunity in the UK tax system

The UK’s personal tax system is notoriously complex, with multiple reliefs, allowances, and deadlines. While this complexity can make compliance daunting, it also creates planning opportunities for those who understand how the system works – or who seek the right advice.

Government initiatives such as Gift Aid, pension tax relief, and capital gains loss offsets are designed to encourage investment, saving, and charitable giving. However, these rules come with important conditions. Missing a deadline or misapplying a rule can turn what should be a tax “treat” into an administrative or financial “trick.”

Key insights and implications

Gift Aid donations – good for charities and your tax bill

If you make a Gift Aid donation to charity now in the 2025/26 tax year, you can carry back the donation to the 2024/25 tax year by including it on last year’s tax return before you submit it to HMRC, which could ‘treat’ you to a lower tax bill.

Gift Aid donations not only extend your basic and higher-rate tax bands, reducing the proportion of income taxed at higher rates, but they also lower your taxable income for thresholds affecting the personal allowance, free childcare, and the High-Income Child Benefit charge.

The caveat? You must carry back a whole donation, rather than part of one. Large donations should therefore be made in tranches to retain flexibility.

Using PAYE to smooth cashflow

For those with PAYE income and a total tax liability under £3,000 for 2024/25, there’s an often overlooked cashflow benefit. You can request to pay your tax bill through your PAYE code, rather than by 31 January, which can be a huge help for cashflow.

You must submit your tax return online by 30 December to request this. Missing that deadline can mean an unwelcome tax bill arriving just after the festive period.

Rental properties and ownership structure

Many landlords are unaware that how they own a property affects how rental income is taxed. If you own a rental property as tenants in common, you can hold the property in uneven shares and ‘treat’ yourself to only being taxed on your share of the rental income and expenses.

But for married couples and civil partners, this flexibility only applies if a Form 17 is submitted to HMRC. Without it, both are automatically taxed on 50% of the income – even if ownership is unequal.

Pension contributions – powerful, but with limits

Pension contributions remain one of the most effective ways to reduce taxable income. As for Gift Aid donations, these increase your tax bands and affect your income for things like the personal allowance, free childcare and the High-Income Child Benefit charge.

The “trick”, however, lies in the limits. Relief is capped at the lower of UK earnings, the annual allowance, and £3,600. Contributing beyond these thresholds or without sufficient “earnings to frank” the payment can lead to unexpected tax charges.

Capital losses – don’t let them vanish

Finally, Stefanie highlights a simple but often missed opportunity:

Capital losses can reduce your capital gains and therefore reduce your capital gains tax bill. If unused, these losses can be carried forward indefinitely – but only if claimed within four tax years. Failing to do so means the loss as good as disappears in a puff of smoke.

Why it matters

For individuals and business owners alike, these rules demonstrate how easily tax planning opportunities can be lost through inattention or poor timing. As inflation and cost-of-living pressures continue, efficient tax management can directly improve cashflow, liquidity, and long-term wealth.

Beyond the immediate savings, proactive tax planning also signals sound financial governance – a quality increasingly valued by investors, lenders, and employees.

What you should consider or do next

Review your tax position early: Don’t wait until the January deadline – especially if you plan to carry back donations or use PAYE to settle your bill.

Maximise available reliefs: Check eligibility for Gift Aid, pension contributions, and loss offsets.

Check ownership structures: If you share property or income with a partner, ensure the tax treatment matches your actual ownership.

Keep detailed records: Claims such as capital losses must be supported by documentation and made within strict time limits.

Seek professional advice: The “treats” in the UK tax system can be valuable, but the “tricks” can be costly. Expert guidance ensures compliance while maximising efficiency.

Would you like to know more?

If you would like to discuss any of the above in more detail, please get in touch with your usual Blick Rothenberg contact or with Stefanie Tremain using the form below.