What has changed for the new tax year?

The new tax year brings a wave of changes to tax legislation that could impact your personal and business finances. Understanding what's new will help you plan ahead and be prepared to ensure you stay compliant and make tax savings where you can.

Tax planning helps to ensure your personal and business finances are run effectively and you benefit from tax changes. Talking to an accountant can keep you informed about changes early and make sure you're planning for taxes effectively. 

Capital Gains Tax rate changes 

The Capital Gains Tax (CGT) rate on for the disposals 'other assets' i.e. non residential property, increased from 30th October 2024, and these rates apply for 2025/26. 

The CGT rate for carried interest, for those who provide investment management services to investment funds and receive sums of carried interest, increases to 32% from April 2025.

	Residential property	Other	Carried interest
Individual - basic rate	18%	18%	32%
Individual - higher rate	24%	24%	32%
Trusts/estates	24%	24%	32%

The CGT annual exemption remains at £3,000 for individuals and £1,500 for trusts.

Business Asset Disposal relief

The rate for Business Asset Disposal relief (BADR) has increased from 10% to 14% for the 2025/26 tax year. In addition, the rate will increase to 18% from 6th April 2026.

Business Asset Disposal relief is a Capital Gains Tax relief that may be available to individual business owners when disposing of their business or business assets. There are eligibility criteria for qualifying disposals and talking to your accountant when you are thinking of retiring or selling your business is crucial for making tax savings. Our comprehensive guide to Business Asset Disposal relief is a useful starting point.

National Minimum Wage and National Living Wage 

From 1st April 2025, the new National Minimum Wage and changes to the National Living Wage will apply.

	Rate from April 2025
National Living Wage	£12.21
18-20 Year Old Rate	£10.00
Under 18 Rate	£7.55
Apprentice Rate	£7.55

Scottish tax band changes 

The Scottish Budget introduced changes to the tax bands for Scottish taxpayers from 6th April 2025.

• The starter rate (19%) - £12,571 - £15,397
• The basic rate (20%) - £15,398 - £27,491
• The intermediate rate (21%) - £27,492 - £43,662

All other Scottish tax bands and rates remain the same.

Employer National Insurance changes

The rate of employers' National Insurance Contributions (NIC) increases to 15% from April 2025. Our artricle on how change to employers NI may affect you, including our Employer NIC calculator is essential reading.

Furthermore, the secondary threshold reduces to £5,000. This is the threshold for when employer NI contributions are payable on an employee's salary.

Employment Allowance increase

The Employment Allowance has been increased to £10,500 and will no longer include restrictive arrangements for employers who were previously only eligible if their employers NIC bill was £100,000 or less.

The Employment Allowance is not available to business that have one employee paid above the secondary threshold, who is also a director.

Business rate relief

Business rate support for the retail, hospitality and leisure sector across England, Wales and Scotland has been reduced. Take a look at guidance for England, Scotland and Wales for more information.

Abolishments

The Furnished Holiday Let scheme will be abolished from 6th April 2025, removing some of the advantages to running a Furnished Holiday Let business.

The Remittance basis for non-domiciled individuals will also be abolished from 6th April 2025.

There are transitional arrangements in place for both schemes so do seek further guidance if this is relevant to you.

Property tax

There have been various changes to Stamp Duty Land Tax, Land Transaction Tax and Land and Building Transactions Tax that property investors must be aware of.

How can TaxAssist Accountants help?   

Our proactive and experienced team at TaxAssist Accountants can help you with your tax planning needs effectively. To discuss your options further, speak to our expert team today on telephone or use our online contact form.

Last updated 25 Mar 2024 | First published 25 Mar 2024

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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