Below is a summary of the issues we think are relevant now and going forward.

Income Tax

Personal tax
The tax-free allowance has been frozen at £12,570 until 2028. Individuals with income over £100k lose this on a sliding scale of £1 for every £2 until they get to £125,140. So income between £100k and £125,140 actually gets taxed at 60%. This is to be avoided.

The point at which the 40% tax rate applies, is £50,270, ignoring the things that increase that level, such as pension contributions and charitable donations, and the point at which the 45% tax rate applies, is £125,140.

Dividends
From April 2025 the nil rate band is £500. The rates over this are 8.75%, 33.75% and
39.35%.

Savings rate
Interest on savings up to £1k is tax free for basic rate taxpayers. Higher rate taxpayers get the first £500 tax free and additional rate taxpayers don’t get any allowance at all unfortunately.

Transfer of allowances between couples
Married couples where one person has unused tax relief can transfer up to £1,257 to the other and save a maximum of £252. This only works where neither spouse is a higher rate taxpayer.

Child benefit
The high-income child benefit charge (HICBC) will apply to adjusted net income over £60,000. For those with income between £60,000 and £80,000, the rate at which the HICBC is charged is equal 1% for every £200 of income that exceeds £60,000. The
charge on taxpayers with income above £80,000 will be equal to the full amount of child benefit paid.

Some families decide not to claim child benefit, but this could cause a problem for a non-working parent who does not pay national insurance because it creates a gap in contributions and impacts the amount of state pension paid.

If child benefit is never claimed for a child, their National Insurance number will not be automatically issued at the age of 16, which will cause a problem further down the line. Therefore, if your income is over the threshold rather than not claiming the child benefit a better option would be to claim it and opt not to receive the payments.

Pensions
The pension Annual Allowance (AA) remains at £60,000. The AA applies to the combined pension input by the individual and, in the case of employees, their employer.

Pension contributions in excess of the AA result in a tax charge on the individual, although they may take advantage of unused AA amounts from the 3 previous tax years.
For those with high incomes, the AA is tapered, where a taxpayer’s adjusted income exceeds £260,000 (increasing from £240,000), the AA is tapered by £1 for every £2 in excess of £260,000, down to a minimum of £10,000 (increasing from £4,000).

Inheritance Tax
Nil rate band and residence nil rate band stay at £325k and £175k respectively. These allowances/rates will apply until April 2030.

With effect from 6 th April 2026 the government are restricting the 100% Agricultural property relief and Business tax relief to £1m. Anything over the £1m you get 50% tax relief, so rather than paying 40% IHT (the full rate) you pay 20%. The £1m limit is for both Agricultural property relief (APR) and Business property relief (BPR) combined.

The government has confirmed it will extend the existing scope of agricultural property relief from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, devolved governments, public bodies, local
authorities, or approved responsible bodies.

It was also announced back in October 2024 that unused pensions pots will be subject to inheritance tax from April 2027

Capital Gains Tax (CGT)

CGT Rates
In 25.26 there will no longer be separate rates for residential and non-residential disposals with the main rates for disposals being set at 18%/24%. The annual tax-free capital gains tax exemption (or allowance) will be £3k.

The tax on assets subject to business asset disposal relief will increase from 10% to 14% for disposals after 6th April 2025 and increase further to 18% for disposals after 6th April 2026. The £1m lifetime limit is still in place for now.

CGT on residential property sales – report and pay deadline extended to 60 days If you sell a house and CGT is due, the gain must be reported and tax paid within 60 days of sale. HMRC will issue penalties for missing the 60-day deadline.

VAT

The VAT registration and deregistration thresholds are £90,000 and £88,000 respectively.

Business Taxes

National Insurance Contributions (NIC) for the self-employed
If your profits are £6,725 or more a year, your class 2 NIC are treated as having been paid to protect your National Insurance record. This means you do not have to pay Class 2 NICs.

The rate of Class 4 NIC is 6% on profits between £12,570 and £50,750, and at 2% on profits over £50,750. These NICs are usually collected with the individual’s income tax self-assessment payments.

MTD for Income Tax
MTD for Income Tax comes into effect if you are self-employed or a landlord from April 2026 and if you have an annual business or property income of more than £50,000 and April 2027 if you have an annual business or property income of more than £30,000. It looks likely if you have an annual business or property income of more than £20,000 you will be brought into MTD from April 2028. The start date for MTD for partnerships and companies has not been confirmed.

Tax Relief for expenditure on plant and machinery
The Annual Investment Allowance (AIA), giving 100% tax relief to unincorporated businesses and companies investing in qualifying plant and machinery, is now permanently set at £1million.

As a replacement for the super-deduction, ‘full expensing’ (effectively 100% tax relief, called a ‘First Year Allowance’ (FYA)) will be available to companies incurring expenditure on new qualifying plant and machinery from 1 April 2023. The qualifying criteria is quite broad although there are exclusions, including cars and features integral to a building (for example, heating systems). With regard to ‘integral features’, a smaller 50% FYA will be available. Subsequent disposals of assets on which one of these FYAs has been claimed will trigger a clawback of tax relief at a rate of 100% or 50% of the disposal proceeds, depending on the rate of the original relief. These new FYAs will mainly be of interest to companies that have already fully utilised their £1million AIA.

There is also a separate 100% FYA for electric cars and cars with zero CO2 emissions and electric vehicle charge points remains available for unincorporated businesses and companies for now.

Corporate Taxes

Corporation tax rates
From April 2023 we went back to different tax rates. 19% for small profits (up to £50k). Profits over £250k will be taxed at 25%. Profits falling between £50k and £250k will be taxed at the marginal rate. These threshold rates are adjusted for short periods and the number of associated companies.

R&D
The existing Research and Development Expenditure Credit (RDEC) and the Small and Medium-sized Enterprises (SME) schemes will be merged, with expenditure incurred in accounting periods beginning on or after 1 April 2024 to be claimed in the merged scheme, which is being heralded as a significant tax simplification. Claimants will receive relief for R&D expenditure by means of a taxable, above-the-line credit at a rate of 20% of qualifying R&D spend. The net benefit will depend on the taxable profits of the company and whether the main rate of tax (25%) or the small profits rate (19%) applies. The notional tax rate applied to loss-making companies will be 19%.

Employment Taxes

National Living Wage
From April 25 the minimum wage for over 21s, known officially as the National Living Wage, will rise by 6.7%, from £11.44 to £12.21. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10 and for apprentices and 16–17-year-olds the minimum wage will rise from £6.40 to £7.55 an hour. Don’t miss birthday related increases.

National Insurance – Employees
The main rate of primary Class 1 National Insurance contributions is currently 8%.

National Insurance – Employers
Employers NI is to increase to 15% from 6 April 2025 and employers will now start paying it when employees earn over £5k (previously £9,100).

However, the Employment allowance is increasing from £5,000 to £10,500. Also, the large employer’s restriction will be removed, meaning businesses who have Employers NI bills of over £100,000 will now be eligible to claim the Employment allowance. These changes come into effect from 5th April 2025.

Connected businesses (those under common control) can only claim it once and employers with only one employee cannot claim it.

Car and van benefits
Employees are required to pay income tax on certain non-cash benefits. For example, the provision of a company car constitutes a taxable ‘benefit in kind’. Employers also pay Class 1A NIC at 15% on the value of benefits.

The set percentages used to calculate company car benefits have increased by 1 percentage point from April 2025 and the flat-rate van benefit charge will be £4,020 for 2025 to 2026.

The multiplier for the car fuel benefit will increase to £28,200 from April 2025 and the flat-rate van fuel benefit charge will be £769.

Double cab pick-ups (with payloads of over 1 Tonne) will be treated as cars for benefit in kind purposes from April 2025, although transitional arrangements for benefits on kind will apply until April 2029.

Other benefit in kind changes
From April 2025 the Official rate of interest which is used to calculate the Benefit in Kind for Employment-related loans and living accommodation will be updated quarterly (previously this was an annual change).

Other things to note.....

Stamp Duty
The stamp duty surcharge on second homes increased from 3% to 5% from 31st October 2024. The government also decided not to extend the temporary reduction in the stamp duty thresholds for people buying their first home so these will go back down from £425k to £300k in April 25, along with the thresholds for stamp duty on a main home from £250k to £125k.

For companies buying residential property over £500k the stamp duty rate is 17%.

ATED
The ATED charge for 25.26 has increased marginally across all the bands.

Late payment interest
The government has announced that from 6 April 2025 it will increase the late payment interest rate charged by HMRC on unpaid tax liabilities by 1.5 percentage points. This means that the new interest rate will be the bank of England base rate plus 4%.

Time to pay
HMRC are still prepared to enter into delayed payment terms for personal and business taxes. They will expect chapter and verse on the reasons and circumstances.

And finally, some well needed humour

What did the left eye say to the right eye? Between us, something smells!