Key tax changes and actions business owners should take before April 5th

Essential actions to take before April 5th

A well-designed action plan ensures the success of strategic planning. In the following article, we discuss some of the key steps that as a business owner you should be considering in order to create an effective action plan.

Employer’s National Insurance ContributionsStarting on the 6th of April, the rate of Employer National Insurance Contributions will rise from 13.8% to 15%. Additionally, the secondary threshold will drop from £9,100 to £5,000 but the Employment Allowance will increase from £5,000 to £10,500, becoming available to all businesses.

Stamp Duty Land Tax (SDLT)The zero rate SDLT threshold will be halved from £250,000 to £125,000, with a starting rate of 2%. This means that any residential property purchase above £250,000 will cost an additional £2,500 in SDLT. For first-time buyers, the zero rate threshold is decreasing from £425,000 to £300,000. The threshold at which you cease to be eligible for first time buyer’s relief is also reducing from £625,000 to £500,000.

Double Cab PickupsFrom the 6th of April, all double cab pickups will be treated as cars for Benefit in Kind tax purposes. This will significantly increase the tax burden for employees using these vehicles. If a double cab pickup is purchased before April 5th, it will still be taxed as a commercial vehicle until the end of it’s lease, or 5th April 2029.

4. Business Asset Disposal Relief (BADR)Capital gains tax rates for BADR will rise from 10% to 14% starting from the 6th of April. However, for disposals made before April 6th, the lower rate of 10% still applies, allowing business owners to save up to £40,000 per shareholder in taxes on qualifying disposals.
 

With the changes looming, here are some immediate actions to consider:

Double Cab PickupsIf your business uses double cab pickups, we recommend ordering them by the 31st of March to ensure they qualify for the old tax rules, which will offer tax benefits compared to the new regulations.

Vehicle PlanningIf your business leases or provides vehicles to employees, consider the long-term implications of the shift in Benefit in kind tax rates, especially for plug-in hybrid cars. For example, a VW Passat plug-in hybrid will see an increase in Benefit in kind tax from £97 per month to £292 per month by 2028, for a sample 40% taxpayer.

Bonus Payments and Pension ContributionsTo mitigate the effects of the increased employer National Insurance Contributions, consider paying any planned bonuses in March rather than April. In some circumstances it may also work to offer employees additional pension contributions —as there are no employer NICs for pension contributions, and can be a win for both the business and the employee.

Employment AllowanceMake sure your business is registered for the Employment Allowance, as it is not automatic. Registering for this allowance could save your business money on employer National Insurance Contributions.

Dividends PlanningEnsure that shareholders, and potentially their family members, use their basic-rate tax allowances before April 5th. Any unused tax allowances after that date are lost, so it’s crucial to declare dividends before the end of the tax year to take advantage of these favourable tax rates.

Succession PlanningOne area that many business owners overlook is succession planning, but with the increased risk of inheritance tax charges following changes announced in the Budget, now is the time to act. Shares in trading companies that were once largely exempt from IHT are now a key consideration in shareholder’s estates. Therefore, business owners should begin considering their succession planning earlier rather than waiting until they’re further along in their business journey.

There’s a clear financial incentive to act quickly, especially for those in their 50s and 60s. If you plan to sell your business in the future, now is the time to transfer shares or assets to reduce the exposure to IHT and capital gains tax. Taking advantage of the current BADR rate of 10%, which increases to 14% in April, could save a significant amount—up to £40,000 for each shareholder, or £80,000 for a couple. Additionally, with IHT changes due to come into effect in 2026, shareholders who delay their succession planning could see their tax exposure grow significantly as their business continues to increase in value.

For business owners, the period before the 5th of April represents a crucial opportunity to take advantage of favourable tax rates and take proactive steps to reduce tax liabilities. If you'd like to receive a callback, simply schedule one using the button below and a member of the team will then be in touch with more details and next steps. Please note that the timescales for completing such projects are extremely tight, so please reach out early to avoid disappointment.

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For more information on how we can help you and your business, please contact us via email or phone and we will be happy to advise on the best solutions for your business.

Please note: This article is provided for information only and was correct as at the time of writing (06/02/25). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance.  No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.