Employer’s National Insurance Contributions (NICs)
Starting from 6 April, employers will face a 1.2% increase in National Insurance contributions (NICs). This change affects all employers, adding an average of £800 per employee to employment costs. Additionally, the secondary threshold will drop to £5,000 from the current £9,100.
Employment Allowance
Meanwhile, the employment allowance will rise to £10,500 from £5,000. The removal of the £100,000 threshold will expand eligibility to all employers.
HMRC Interest Rates for Late Payments
From 6 April, HMRC will increase interest rates for late payments by 1.5% for all taxes, resulting in a future rate of 8.5%. The rate will be calculated at the base rate plus 4%, up from the current plus 2.5% premium.
Late Payment Penalties
Effective from 1 April, late payment penalties will increase to 10% from the current 4%. For income tax under self-assessment, those failing to pay within a month will face a 10% penalty. This regime will also apply to VAT late payment penalties.
Tax Thresholds
Tax thresholds will remain frozen for another year, with the tax-free personal allowance staying at £12,570 per year.
Scottish Tax Rate Bands
In Scotland, the starter rate band will increase by 22.6% and the basic rate band by 6.6%. Consequently, the thresholds for paying both the basic 20% and intermediate 21% rate of tax will rise by 3.5%. The higher, advanced, and top rate thresholds will remain frozen at their current levels until the end of this Scottish parliament (2026-27).
Personal Savings Allowance
The personal savings allowance will stay at £1,000 for basic rate taxpayers, £500 for higher rate taxpayers, and £0 for additional rate taxpayers.
Business Asset Disposal Relief (BADR) and Investors’ Relief
From 6 April 2025, the rate for business asset disposal relief (BADR) and investors’ relief will increase by 4% from the current 10% to a standard rate of 14%. The following year, it will rise again to equalise with the main lower rate of 18% capital gains tax from 6 April 2026.
Furnished Holiday Lets (FHL)
Starting from 6 April, income from furnished holiday lets (FHL) will be treated the same as long-term lets for individuals, trusts, and partnerships.
Non-Domiciled Individuals (Non-Doms)
From 6 April, the current remittance basis rules for non-doms will be abolished and replaced with a system based on tax residence. The concept of domicile will be replaced by long-term residency.
Double Cab Pick-Up Tax Hike
Beginning on 1 April for corporation tax and 6 April for income tax, double cab pick-up vehicles (DCPUs) with a payload of one tonne [1,016 kilos] or more will be treated as cars for certain tax purposes.
Statutory Payment Rises
From 6 April, a new statutory payment for neonatal care leave will start, with the rate set at £187.18 per week or 90% of earnings if lower.
Child Benefit Payments
Starting from 7 April 2025, child benefit payments will increase. Parents will receive £26.05 per week for the eldest or only child and £17.25 per week for a second child.