Upcoming Key Tax Changes You Need To Know About

As the tax year-end approaches, it’s essential to prepare for key changes that could impact your finances.

We are just over 5 weeks away from April, which means it is not long until some key tax changes are due to take place. In this article we will be giving a summary as to what tax changes will be taking place this April.

Your quick summary to the tax changes taking place in April

Employers National Insurance:Employers will face an increase in National Insurance rates, rising from 13.8% to 15%. Additionally, the threshold for employee earnings at which National Insurance applies will drop from £9,100 to £5,000 and the Employment Allowance will increase significantly, rising from £5,000 to £10,500. For more information on how the National Insurance changes will affect your business, click here.

National Minimum wage:Increased rates of the National Living Wage and National Minimum Wage will come into effect from 1st April 2025. The National Living Wage is to rise from £11.44 to £12.21 per hour, and the rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a "single adult rate".

R&D:Starting on the 1st of April 2024, the UK introduced significant changes to the R&D tax relief system. The SME and RDEC schemes are now merged, reducing tax relief for SME claimants. Overseas subcontractor and EPW costs are no longer eligible, and businesses can now claim relief on subsidised projects. New rules clarify that only the company conducting R&D, not subcontractors, can claim. Additionally, businesses must notify HMRC of their intention to claim within six months of the accounting period’s end. For more information on these changes click here.

Double cab pickups:From April 2025 the Government will treat double-cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars. This affects capital allowances and benefits in kind (BIK).

Furnished Holiday Lettings:The Furnished Holiday Lettings (FHL) tax regime will be abolished from April 2025. The effect of abolishing the rules will be that FHL properties will form part of the person’s UK or overseas property business and be subject to the same rules as non-furnished holiday let property businesses.

Prior notifications:As of the 1st of April 2023, businesses must now notify HMRC of their intention to make an R&D tax credit claim within six months after the end of the relevant accounting period. The intention of implementing this rule is to deter last-minute claims. It is important to note that there are various exceptions to this, for example, if a company has claimed R&D tax credits in the past three years.

Removal of non-UK domiciled tax status:The Government will proceed with removing the non-UK domicile tax regime for foreign income and gains, with effect from 6 April 2025. The new regime will provide an exemption from tax on foreign income and gains for four years for individuals who have not been UK resident in any of the previous 10 years. From the fifth tax year, foreign income and gains will be taxable in the same way as for other UK residents.

Click here to view a summary of how to prepare for the upcoming tax year-end

Tax affairs are complicated and we would always advise you to speak with your advisers before making any changes. For more information on R&D or how we can help you and your business, please contact us via email or call 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 (20/02/25). 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.