10 tax changes starting in April 2025

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The Chancellor focused on spending cuts in the 2025 Spring Statement rather than raising taxes, but a string of previously announced changes to tax legislation are set to come into play from April.
 

1. From 6 April 2025, Employers' National Insurance Contributions (NIC) will increase from 13.8% to 15%, while the threshold - the point at which employers begin to pay NI on an individual’s salary - will be reduced from £9,100 to £5,000. The measure, announced in the Autumn Budget, is estimated to impact 940,000 employers who are due to see an increase in their NIC liability as a result, according to HMRC. This change comes at the same time the National Minimum Wage also sees a significant increase, with those aged 21+ rising to £12.21 per hour, 18-20 year-olds £10 per hour, and under 18s receiving £7.55 per hour.  From an employment cost perspective, this might be a good time for employers to review salary packages and, where applicable, consider employee salary sacrifice options.
    
2. Employment Allowance will increase from £5,000 to £10,500 and is no longer restricted to employers with previous secondary NIC tax bills of £100,000 or less.  This change, will provide some relief to the increase in Employer NIC for the smallest employers.
    
3. Income from furnished holiday lets (FHL) will be treated the same as long-term lets from 1 April for companies and 6 April for individuals, trusts and partnership. An FHL will no longer be eligible for beneficial capital allowances treatment, while eligibility for existing reliefs will cease.
    
4. The Stamp Duty Holiday is due to end on 31 March 2025, with thresholds for the rates of Stamp Duty Land Tax (SDLT) reverting to previous levels (before they were increased in the 2022 mini-budget). If you are looking to purchase a property, this is something that should be factored into your planning. From 1 April, the 0% threshold will drop from £250,000 (£425,000 for first-time buyers) to £125,000 (£300,000 for first-time buyers). For higher valued properties the rates are also changing with 2% SDLT due on properties between £125,001 and £250,000 and 5% stamp duty for properties between £250,001 and £925,000. Those buying property worth £925,001 and £1.5m will pay 10% and for properties over £1.5m stamp duty will be 12%.
    
5. The rate of Business Asset Disposal Relief will increase from 10% to 14%. This relief, which gives business owners a lower rate of CGT on qualifying gains, was changed in the Autumn Budget and will increase further to 18% in April 2026. Therefore, if you are looking to dispose of assets prior to 5 April 2026, there is still a chance to make a small tax saving. It should be noted that the £1m lifetime limit still applies.
    
6. HMRC is changing the tax treatment of double cab pick-ups (DCPUs), which will be treated as cars rather than commercial vehicles, from 6 April. The Government made a double u-turn when it included this change in the Autumn Budget document, having previously announced the plans in early 2024 before quickly withdrawing them. This change, which will mainly impact farm businesses, will mean DCPUs no longer qualify for Annual Investment Allowance but will instead be subject to the same capital allowances as cars.
    
7. Long-standing tax rules for non-UK domiciled individuals will be abolished and replaced by a new regime. Effective from 6 April, these complex new rules will impact how non-doms are taxed on their foreign income and gains (FIG) and how Inheritance Tax applies to their estate. The FIG regime provides a four-year exemption to new arrivals in the UK on the foreign income and gains for individuals who have been non-UK residents for 10 years.
    
8. For Scottish taxpayers, changes have been made to the starter, basic and intermediate income tax bands. The uprate to the thresholds is inline with inflation and those with income below about £30,300 will pay up to £28 a year less income tax than those in the rest of the UK, while higher earners continue to pay significantly more.
    
9. Enhanced tax return requirements will be introduced from April 6 and will apply for tax returns for 2025/2026 going forward. The voluntary requirement for taxpayers who start or cease to trade to report the date of commencement / cessation on their tax return will become a mandatory requirement.
    
10. It will also become mandatory for directors of close companies to provide details including the value of dividends received from the close company for the year and their percentage shareholding, as well as their name and the registered number of the close company. It is therefore essential that information held on Companies House will match that of an individual’s tax return.

 

Many of the new tax changes will require careful consideration and, where they apply,  should be factored into your planning to allow you to minimise your tax liabilities.