Key Tax Changes April 2025
- 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. 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.
- 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.
- 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.
- The rate of Business Asset Disposal Relief will increase from 10% to 14%. It will increase further to 18% in April 2026. The £1m lifetime limit still applies.
- Double cab pick-ups (DCPUs) will be treated as cars rather than commercial vehicles, from 6 April. 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.
- The 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.
- Enhanced tax return requirements have been introduced from April 6 and will apply for tax returns for 2025/2026 going forward. It is now mandatory for taxpayers who start or cease to trade, to report the date of commencement / cessation on their tax return.
- For 2025/26 onward, directors of close companies need to provide details 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.
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