We’ve broken down the most significant tax changes and what they mean for you.
National Insurance Changes – Higher Costs for Employers
From April 2025, employer National Insurance Contributions (NICs) will increase from 13.8% to 15% on salaries above £5,000.
📌 What This Means for You:
- Businesses with employees will see increased payroll costs.
- Budgeting for 2025/26 should factor in these higher NIC expenses.
- Employers may need to review salary structures and employment costs.
💡 Tip: Now is the time to reassess payroll strategies and explore tax-efficient employee benefits to mitigate the impact.
Capital Gains Tax (CGT) Increases – Higher Tax on Asset Sales
If you’re planning to sell assets, you’ll face higher CGT rates:
- Basic rate taxpayers: CGT increases from 10% to 18%.
- Higher and additional rate taxpayers: CGT rises from 20% to 24%.
📌 What This Means for You:
- If you’re selling shares, property, or other chargeable assets, expect to pay more tax on your profits.
- Business Asset Disposal Relief and Investors’ Relief rates will also rise, impacting business sales.
- It may be worth accelerating asset sales before these changes take effect.
💡 Tip: If you’re considering selling assets, a strategic tax review now could save you thousands.
The End of Non-Domiciled Tax Status
The UK is abolishing the remittance basis of taxation. Non-domiciled individuals will now be taxed on worldwide income and gains based solely on their residency status.
📌 What This Means for You:
- If you’re a UK resident but currently benefit from non-dom status, your tax liabilities could increase significantly.
- New residents (not UK-tax-resident for the past 10 years) will get a four-year 100% tax relief on foreign income and gains.
💡 Tip: If you’re a non-dom individual, speak to a tax adviser now to explore restructuring options.
Electric Vehicles (EVs) to Lose Road Tax Exemption
From April 2025, electric vehicles will no longer be exempt from Vehicle Excise Duty (VED).
- New EVs registered from April 2025 will pay £10 in the first year, followed by £195 annually.
- Existing EVs (registered between 2017–2025) will also move to the £195 standard rate.
📌 What This Means for You:
- Owning an EV will now come with annual tax costs.
- If you’re considering an EV purchase, factor in this extra expense.
💡 Tip: Businesses using EVs for company fleets should review cost implications.
Stamp Duty for First-Time Buyers – Threshold Reduction
The Stamp Duty Land Tax (SDLT) threshold for first-time buyers will fall from £425,000 to £300,000.
📌 What This Means for You:
- If you’re planning to buy your first home, your SDLT costs could increase.
- Buyers purchasing over £300,000 will pay 5% SDLT on the excess.
💡 Tip: If you’re a first-time buyer, consider completing your purchase before April 2025 to benefit from the current tax break.
Inheritance Tax on Agricultural Property
Previously, agricultural land qualified for 100% Inheritance Tax (IHT) relief. From April 2026, this will change:
- The first £1 million of agricultural property remains tax-free.
- The value above £1 million will be taxed at 20%.
📌 What This Means for You:
- If you own farmland or agricultural property, this could impact estate planning.
- Inheritance tax liabilities could increase for farming families.
💡 Tip: Review your estate planning now to ensure assets are structured tax-efficiently.
National Minimum Wage Increase
From April 2025, the National Minimum Wage (NMW) will rise by 6.7%, with the rate for over-21s increasing to £12.21 per hour.
📌 What This Means for You:
- Employers will need to adjust payroll budgets.
- Small businesses could face increased wage costs, especially in low-margin industries.
💡 Tip: If wage increases impact your business, consider efficiency improvements or pricing adjustments.
How Can You Prepare for These Changes?
With these tax increases and new regulations, it’s crucial to plan ahead. John Morgan Accountants can help you:
- Minimise tax liabilities with proactive planning.
- Optimise payroll and employee benefits to offset NIC increases.
- Structure your investments and asset sales tax-efficiently.
Need a tax planning review? Contact us today for tailored advice.
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