Capital Gains Tax (CGT)
- The increases in rates which are effective immediately:
- the 10% rate for basic rate taxpayers to 18% for disposals
- the 20% rate for higher rate taxpayers to 24%
- the 20% rate of Capital Gains Tax that applies to gains accruing to trustees and personal representatives to 24%
- Changes from 6th April 2025 onwards:
- the 10% rate that applies to the first £1million gain on Business Asset Disposals will increase to 14% for disposals made on or after 6th April 2025 and from 14% to 18% for disposals made on or after 6th April 2026.
- There are special provisions announced to deal with sales that have been entered into but not completed by 30th October. We will contact any clients affected by this.
- The existing 18% and 24% rates that apply to residential property will remain unchanged. This measure means that it will no longer be necessary to specify separate rates for this purpose.
Inheritance Tax (IHT)
- The IHT thresholds remain frozen until 2030 at:
- nil-rate band at £325,000
- residence nil-rate band at £175,000
- residence nil-rate band taper, starting at £2 million
- The government has also announced it will reform agricultural property relief (APR) and business property relief (BPR) from 6th April 2026. The current 100% rate of relief will only continue for the first £1 million of combined agricultural and business property, and it will be 50% thereafter.
- APR will be extended to include environmental land management schemes.
- The government will also reduce the rate of business property relief available from 100% to 50% in all circumstances for shares designated as “not listed” on the markets of recognized stock exchanges, such as AIM.
- From 6th April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for Inheritance Tax purposes.
National Minimum Wage (NMW)
- The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025.
- The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour
Employers National Insurance
- From 5th April 2025, employers National Insurance will increase from 13.8% to 15%
- This will “kick in” after the first £5,000 of salary rather than the current £9,100.
- To compensate slightly, the employer allowance will increase from £5,000 to £10,500.
Stamp Duty Land Tax (SDLT)
- Effective from tomorrow (31st October), the higher rates of SDLT on purchases of additional residential properties by individuals and purchases of residential properties by companies will increase from 3% to 5% above the standard residential rates of SDLT.
Private School Fees
- As expected, VAT will become payable on private school fees.
- Private schools will no longer benefit from business rates relief, which may put further inflationary pressure on school fees going forwards.
Tax Administration
- The government is going to invest heavily in HMRC to “close the tax gap,” including 5,000 more compliance officers. This means we might see an increase in tax enquiries going forward.
Business Taxes in general
- Treatment of double-cab pickup vehicles (DCPUs)—From 1 April 2025 for Corporation Tax and 6 April 2025 for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits. The existing capital allowances treatment will apply to those who purchase DCPUs before April 2025.
Corporate Tax Roadmap – The government has published a Corporate Tax Roadmap. The roadmap includes a commitment to cap the Corporation Tax Rate at 25%; maintain the Small Profits Rate and marginal relief at current rates and thresholds; and maintain key features as such as Full Expensing, the Annual Investment Allowance, R&D relief rates, and the Pate