With the start of the new tax year, the 6th April, we have highlighted some key changes that could affect you and your business.
Employer’s national insurance contributions
In the Autumn Budget, the Chancellor announced a change that will have an impact on many businesses. The increase to employer’s national insurance contributions, going from 13.8% to 15% from 6 April.
There is also a change to the threshold at which the contributions are paid at – this is being reduced from £9,100 to £5,000.
The Employment Allowance (the allowance which eligible employers get to reduce their NI bill) increases from £5,000 to £10,500.
The National Living Wage and National Minimum Wage
The National Living Wage, paid to those over 21, is increasing by 6.7% from April 6, from £11.44 an hour to £12.21.
The National Minimum Wage for individuals aged between 18 and 20 increases from £8.60 to £10 an hour from 1 April.
There is also an increase for 16 and 17 year olds with a new hourly rate of £7.55.
Business Asset Disposal Relief (BADR)
From 6 April, the BADR rate is increasing from 10% to 14%.
Company cars and vans
From 6th April, Double cab pickup trucks are classed as cars not commercial vehicles for tax purposes.
Furnished Holiday Lets (FHL)
The Furnished Holiday Lettings tax regime is abolished From the 1st April 202 for companies and the 6th April for Individuals. FHL properties will no longer benefit from tax advantages such as capital allowances and preferential treatment under Capital Gains Tax (CGT).
Non-UK domiciled (Non-Doms)
The Non domiciled individuals tax regime is abolished from 6th April 2025.
New tax rules for non-doms. Also on Sunday (6 April) long-term residents face UK tax on their worldwide income and gains even if the UK is not their permanent home (‘domicile’). Previously, under the ‘remittance basis’, non-doms were able to not pay UK tax on their foreign income and gains provided they did not bring it (remit it) into the UK. A Temporary Repatriation Facility will enable former remittance basis users to bring capital representing previous years’ foreign income and gains into the UK with a reduced tax charge. New arrivals to the UK will benefit from up to four years of tax exemption on their foreign income and gains. There is also a new residence-based system for inheritance tax.
Stamp Duty Land Tax
The rate of Stamp Duty Land Tax (payable in England) due on the purchase of second homes, buy-to-let residential properties, and companies buying residential property rose from 3% to 5% from 31st October 2024.
From 1st April 2025 the rates and bands for SDLT will be:
0% on properties up to £125,000
2% on the next £125,000 (the portion from £125,001 to £250,000)
5% on the next £675,000 (the portion from £250,001 to £925,000)
10% on the next £575,000 (the portion from £925,001 to £1.5 million)
12% on the remaining amount (the portion above £1.5 million)
SDLT charged when companies purchase properties costing more than £500,000 is 17%.
Higher interest on late payments.
The interest rate HMRC charge for late payment of tax increases by a further 1.5% on the 6th of April to 8.5%. This changes from the Bank of England base rate plus 2.5% to the base rate plus 4% for most taxes.
If you have any questions about any of the changes above or need specific advice, please do not hesitate to contact us. Our team will be happy to help.
