Tax changes coming into effect for the 2025 tax year

As we begin a new tax year, there are key changes to the tax law that have come into effect, influencing both individuals and businesses. Below we will discuss five key changes to be aware of for the new tax year.

Employers’ National insurance increase

From 6 April 2025, the rate of employers’ National Insurance contributions increased from 13.8% to 15%. In addition to this, the threshold in which an employer becomes liable to pay secondary Class 1 NICs on a given employment will drop from £9,100 to £5,000.

However, the Employment Allowance, which helps eligible employers reduce their national insurance liability, will rise from £5,000 to £10,500, offering additional relief. This will especially benefit smaller businesses

Landlord changes

The separate tax regime for furnished holiday lets (FHL) was scrapped on 1 April 2025 for limited companies and 6 April 2025 for personal tax. Previously, there were tax advantages to having a FHL compared to a non- FHL business. This change means that FHLs will be treated in line with all other property income and gains.

Business asset disposal relief

Business asset disposal relief (BADR) is a lower rate of tax you pay when you sell or dispose of part of your business. From 6 April 2025 the rate of BADR has increased from 10% to 14%. In the Autumn budget it was also announced that this would be increasing a further 4% to 18% in April 2026.

Non-UK domiciled individuals

The pre-existing long-standing rules will be abolished and replaced by a new regime. From 6 April 2025 there will be new rules regarding how non-domiciled individuals are taxed on their foreign gains and income.

New arrivals into the UK will receive a four-year tax exemption on their foreign income and gains.

Double cab pickup trucks

From 6 April 2025 new double cab pickup trucks will be treated as cars rather than commercial vehicles. This will affect how they are treated for capital allowances and as a benefit in kind.

Please see our recent blog regarding the changes in relation to the double cab pickup trucks:

If you have any questions or would like to discuss further, please contact your local Perrys branch.