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Navigating Tax Changes: Key Takeaways from the April 2025 Tax E-News
Welcome to a breakdown of the key tax updates from the April 2025 Tax E-News. This month’s newsletter covers important changes from the Spring Statement and other vital tax developments that could impact you or your business.
Spring Statement Highlights:
Fiscal Stability: Chancellor Rachel Reeves emphasized maintaining fiscal rules despite economic challenges, focusing on government spending reviews set for June 11, 2025.
No New Tax Changes: The Spring Statement refrained from announcing new tax changes, concentrating on spending efficiencies.
Self-Assessment and Income Reporting:
High-Income Child Benefit Charge (HICBC):
For 2025/26, the HICBC is 1% of child benefit for every £200 of income above £60,000, fully clawing back benefits at £80,000.
A new digital PAYE service will be available from summer 2025 for employees to declare and pay HICBC.
Simplified Reporting for Small Traders:
Income below £1,000 remains tax-free.
A new online service will allow reporting of £1,000-£3,000 trading income without a full self-assessment.
Income over £3000 will still require a full self assessment.
Making Tax Digital (MTD) for Income Tax:
Mandatory digital record-keeping and quarterly reporting are coming:
April 2026: Income over £50,000.
April 2027: Income over £30,000.
April 2028: Income over £20,000.
MTD-compatible software is required for both quarterly updates and the end-of-year tax return.
Certain exemptions and deferrals will apply.
31 March year end businesses can start compliance on 1 April.
Employment Taxes:
Employer National Insurance Contributions (NICs):
From April 2025, NICs increase to 15%, with a lower threshold of £5,000.
The employment allowance increases to £10,500, with relaxed eligibility rules.
National Minimum Wage and NICs:
New minimum wage rates are in effect, with the National Living Wage at £12.21.
Employers NI has increased to 15% and the threshold has lowered to £5000.
National Minimum Wage rates
The new minimum wage rates are as follows:
| Hourly Rate |
National Living Wage (21 and over) | £12.21 |
18-20 Year Old Rate | £10.00 |
16-17 Year Old Rate | £7.55 |
Apprentice Rate | £7.55 |
Accommodation Offset | £10.66 |
Taxes on Capital Assets:
Capital Gains Tax (CGT):
CGT rates are 18% for basic rate taxpayers and 24% for others.
Business Asset Disposal Relief (BADR) increases to 14%, with a further increase to 18% planned for April 2026.
Inheritance Tax (IHT) Reliefs:
Changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) are planned for April 2026.
Relief will be limited to 100% of the first £1 million, and 50% above that.
BPR on AIM shares reduces to 50%.
Corporate Taxes:
Research and Development (R&D) Tax Reliefs:
Consultation on mandatory advance clearances for R&D claims.
Consultation regarding a minimum expenditure threshold for R&D claims.
Tackling ‘Phoenixism’:
HMRC intensifies efforts against tax-driven business cessations.
Stamp Duty Land Tax (SDLT):
England and Northern Ireland:
SDLT thresholds change from April 2025, impacting standard and first-time buyers.
Tax Avoidance and Compliance:
Enhanced Measures:
New legislation to combat tax avoidance, especially offshore non-compliance.
Increased powers and sanctions for promoters of tax avoidance schemes.
New reward scheme for informants regarding tax fraud.
HMRC Compliance:
Increased compliance resources and AI usage.
Improved data collection from financial institutions.
Penalties and Interest:
Increased late payment penalties for MTD users from April 2025.
Late payment interest rates increase by 1.5 percentage points from April 2025.
Key Takeaway:
Staying informed and compliant is crucial. We recommend contacting us to discuss how these changes affect you and to ensure you're prepared for the upcoming tax year.
Navigating these complex tax changes can be challenging. Don't leave your financial well-being to chance. Contact RGA Accountants today for personalized advice and proactive solutions to ensure you're fully compliant and maximizing your financial opportunities
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