Whether you’re arranging a bank transfer or direct debit, there are some key dates and times you should know about before you can confidently navigate tax year end.
You may have seen us mention tax year end recently – for good reason too. The 5 April deadline is fast approaching, and a few simple steps could have a sizeable impact on your wealth. But as with so many seemingly simple financial tasks, it’s not always immediately clear what the rules are.
The 2019/20 tax year ends on Sunday 5 April, but there are certain tasks you’ll need to undertake a little sooner. Let’s take a look.
If you have a pension with us:
Friday 20 March 2020 – If this is your first direct debit payment into a Nutmeg pension
Your first payment into a Nutmeg pension takes 10 business days to process from when the mandate is put in place. This means that if you have not paid into your pension before, your deadline for payments to ensure they reach us before tax year end is Friday 20 March .
Note, we may ask for documents to verify your identity or support your direct debit set-up. In which case, it could take a little longer to get your pension set up. The main takeaway here is act quickly.
Friday 27 March 2020 – If you have previously made direct debit payments from the same bank account
If you have previously made direct debit payments to your pension, you’ll need to make sure that you submit a one-off contribution payment by 4pm on Friday 27 March.
If you have an ISA with us:
Wednesday 1 April – If you’re initiating a bank transfer
You may want to check first with your bank if they can send your payment via the Faster Payment method. If so, you have an extra couple of days to complete (see below). Otherwise, 1 April is your deadline to initiate a bank transfer and complete in time for tax year end.
Some banks will have upper payment limits, meaning you may have to send a payment on two consecutive days. Either way, the final payment must come no later than the 1 April deadline.
Thursday 2 April 2020 – If you’re moving taxable investments into an ISA
Moving taxable investments into an ISA wrapper is sometimes called ‘bed & ISA’, ‘maximise’ or ‘migration’ by industry types.
If you have a Nutmeg account, you can make the most of your tax benefits by moving taxable investments from your general investment account into your ISA wrapper. Head to your ISA Settings, switch Auto-fill ON and check your full allowance/ISA limit settings.
Friday 3 April 2020 before midday – If you’re arranging a transfer via Faster Payments
As above, some banks may have per transaction limits. So again, you may need to split your payment over two or three days, with the final payment coming no later than midday.
At Nutmeg, we are only able to accept Faster Payments into a stocks and shares ISA and not a Lifetime ISA, Junior ISA or pension.
23:59 Sunday 5 April 2020 – If you’re making a debit card payment
You can pay into your ISA until 23:59 on Sunday 5 April via debit card. You’ll get another allowance in the next tax year, but your current allowance won’t roll over. Use it or lose it.
In the current tax year, you can contribute a maximum of £20,000 tax free across different types of ISAs: cash, stocks and shares, Innovative Finance and Lifetime ISA. Note, you can only contribute to one stocks and shares and one cash ISA per tax year.
If you need any support:
Our customer support team is available to answer any of your questions as we approach 5 April 2020. See our extended support hours.
As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may be subject to change in the future.