Lots on the Tax Agenda: What You Need to Know for 2025 and Beyond

As we navigate an uncertain economic climate, the new Chancellor, Rachel Reeves, has promised to limit tax changes to a single ‘fiscal event’ per year, meaning we are not expecting further tax announcements until the Autumn Budget. However, a series of scheduled tax changes from April 2025 onwards means businesses and individuals must stay alert.

At Merranti Accounting, we ensure that you’re ahead of the game by keeping you informed of these developments and helping you minimise your tax liabilities. Here’s what’s coming up and how it could affect you.

Double-Cab Pickup Vehicles – A Major Tax Shift

One of the most significant changes affects those using double-cab pickup vehicles for business purposes. These vehicles will soon be classified as cars rather than vans for tax purposes, impacting both corporation tax relief and benefit-in-kind (BIK) charges. If you rely on these vehicles, ordering before April 2025 could help you retain the current tax treatment.

Employers Beware: Rising Costs in 2025

From April 2025, two key changes will impact business payroll costs:

• A big increase in Employers’ National Insurance Contributions (NICs).
• A 6.7% rise in the National Living Wage.

Both changes will increase the cost of employing staff. However, employers can mitigate NIC costs by making use of the Employment Allowance and other reliefs.

📌 Action Point: If you run a business, you should review your payroll structure and employment costs ahead of April 2025.

Is Your Business Structure Still Right for You?

A series of tax changes over the years—including increases in dividend tax, corporation tax, and employer costs—have fundamentally altered the landscape for owner-managed businesses. In some cases, operating as a limited company may no longer be the most tax-efficient structure.

We can help you evaluate whether a sole trader, partnership, or limited company best suits your tax position.

Research & Development Tax Relief – A New Disclosure Facility

For businesses claiming R&D tax relief, HMRC has introduced a special disclosure facility for those who may have inadvertently overclaimed in previous years. If your business has claimed R&D relief, now is the time to review your submissions to ensure compliance and avoid potential penalties.

Inheritance Tax (IHT) Changes – What Business Owners and Farmers Need to Know

Much attention has been given to Inheritance Tax (IHT) increases for farmers from April 2026, but the impact extends far beyond agriculture.

Under proposed changes:

• Business owners will face IHT on company shares exceeding £1m when passed down at death.
• Gifting shares during your lifetime (and surviving for 7 years) remains fully exempt from IHT.

📌 Action Point: Business owners should review their estate planning now to assess whether gifting shares before April 2026 is a better option.

Pension IHT Rules to Change in April 2027

From April 2027, new IHT rules on pensions will come into effect. While the full details are yet to be finalised, pensions will no longer be entirely exempt from IHT. This means planning your pension withdrawals and beneficiary designations will be more crucial than ever.

Capital Gains Tax (CGT) Increases on Business Sales

As part of the recent tax adjustments, CGT rates on Business Asset Disposal Relief (BADR) will rise from 10% to 14% from April 2025. A further increase to 18% is scheduled for April 2026.

📌 Action Point: If you’re considering selling a business or qualifying asset, you may wish to accelerate the sale before April 2025 to take advantage of the lower CGT rates.

Stamp Duty Land Tax (SDLT) Changes – Higher Costs for Homebuyers

From 1 April 2025, SDLT will revert to higher rates:

• The nil-rate threshold will drop from £250,000 to £125,000.
• First-time buyer relief will reduce from £425,000 to £300,000 (for properties up to £500,000).

If you’re planning to purchase property, doing so before April 2025 could result in significant tax savings.

Making Tax Digital (MTD) for Income Tax – Are You Ready?

From April 2026, the much stricter reporting requirements of Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) will start being phased in for self-employed individuals and landlords.

We strongly advise preparing early, as MTD will require quarterly updates to HMRC, replacing the current annual tax return system.

How Merranti Accounting Can Help

With so many tax changes ahead, it’s vital to plan early. At Merranti Accounting, we help businesses and individuals stay ahead of new regulations, optimise their tax position, and avoid unnecessary costs.

Want to discuss your tax strategy? Get in touch with us today. We’re here to help you navigate these changes and keep your tax bill as low as possible.

Find more from the spring news letter here