The tax year runs from 6 April to 5 April. Happy new tax year!
Several new rules were introduced in early April 2025. Here’s a round-up of the changes kicking off our new tax year:
Changes for Employers
- Employer’s National Insurance Contributions (NICs) have increased to 15%, a rise of 1.2%. This affects all employers, with an estimated additional cost of £800 per employee. The double whammy for employers is the big reduction of the secondary threshold to £5,000 (previously £9,100).
- A new statutory payment for neonatal care leave starts on 6 April and the rate will be £187.18 per week or 90% of earnings if lower.
- Neonatal care leave will be available for those responsible for babies born on or after 6 April 2025 and receiving neonatal care. Employees will be entitled to take one week’s leave for each uninterrupted seven-day period the child is receiving neonatal care, up to a maximum of 12 weeks’ leave.
HMRC Charges
The interest rate charged by HMRC for late payments is now 8.5%, a rise of 1.5%.- Make sure you schedule your tax payment on time! Late payment penalties for income tax (via self assessment) have increased, including a rise to 10% (from 4%) if you fail to pay within one month (effective 1 April).
- VAT late payment penalties have also increased, with staged charges of 3% (from 2%) of unpaid tax at 15 days, 3% (from 2%) at 30 days, and 10% (from 4%) from day 31.
Thresholds and Allowances
- There are no changes to tax thresholds. This means wage increases could move more people into higher-rate tax bands. (In Scotland, starter and basic bands are increasing.)
- Similarly, there is no change to the personal savings allowance. It remains at £1,000 for basic rate, £500 for higher rate and £0 for additional rate taxpayers.
- For businesses, the rate for business asset disposal relief (BADR) and investors’ relief will increase to 14% (from 10%) from 6 April. A further rise to 18% will take effect from 6 April 2026.
Non-Dom Rules
The current remittance basis rules for non-doms will be abolished and switched to a system based on tax residence. Effective from 6 April, the concept of domicile will be replaced by long-term residency. Read more about the new rules for non-doms.
Furnished Holidays Lets (FHL) Changes
FHL properties will be treated the same as long-term lets from 6 April for individuals, trusts and partnership. This is a huge shake up for the property rental sector. Read about the new FHL rules and transition process.
Double-Cab Pickups
For tax purposes, these vehicles are now treated as cars, not commercial vans. The unpopular change was paused but is now live, starting on 1 April. Read about the new double-cab treatment.
‘The new tax year is always a time of change,’ says Felicity Reader, Accounts Senior at re:accounts Chartered Accountants in Stevenage. ‘There are a lot of new rules to keep up with! We’re here to ensure our clients meet the new requirements. It’s also an important opportunity to adjust financial planning and forecasting.’
How do April’s changes affect you or your business?
For an initial chat without obligation, talk to the friendly experts at re:accounts. Saving money for our clients is our superpower. Let’s explore your options.
