Tax Changes

Hello all it is important to stay informed about upcoming tax changes as they can significantly impact your finances. Here's a summary of key tax changes coming into effect in the UK in April 2025:

Key Tax Changes:

• National Insurance Contributions (NICs):

  • Employers' NICs will increase from 13.8% to 15%.

  • The threshold at which employers start paying NICs will decrease from £9,100 to £5,000 per year.

  • However, the Employment Allowance will increase from £5,000 to £10,500, and the £100,000 eligibility threshold will be removed. This is aimed to help small businesses.

• Vehicle Excise Duty (VED):

  • Significant changes are coming to car tax rates, particularly affecting new vehicle purchases.

  • Electric vehicle owners will begin paying vehicle tax.

  • Changes to VED rates will be based on CO2 emissions.

• Capital Gains Tax (CGT):

  • The rate of tax on gains eligible for Business Asset Disposal Relief (BADR) will increase from 10% to 14%.

• Furnished Holiday Lets (FHLs):

  • Changes to how mortgage interest is treated for income tax purposes.

  • Changes to how Capital Gains Tax is applied to FHLs.

• Double cab pick-ups:

  • From April 2025 double cab pick-ups will be reclassified as cars for tax purposes. This will have an effect on benefit in kind tax rates.

UK Minimum Wage Set to Rise in April 2025

On April 1st 2025 the UK's National Minimum Wage rates are set to increase. Here's a quick breakdown:

• National Living Wage (21 and over):

  • Will rise to £12.21 per hour.

  • This is an increase of £0.77.

• 18-20 Year Old Rate:

  • Will increase to £10.00 per hour.

  • This is an increase of £1.40.

• 16-17 Year Old Rate & Apprentice Rate:

  • Will increase to £7.55 per hour.

  • This is an increase of £1.15.

Oliver