Summary of Upcoming Tax Changes: What’s Already Decided for 2025 and Beyond

While the Spring Statement wasn’t a formal fiscal event, it’s important to remember that a number of significant tax changes are already confirmed and on the horizon. Some of these changes have already caused considerable debate – especially around National Insurance and Inheritance Tax reliefs.

Here’s a breakdown of the key measures that are already planned, including when they take effect and what they mean for individuals and businesses.

Coming into effect from April 2025

1. Major shift in tax for non-domiciled individuals

• The current remittance basis will be abolished.
• A new residence-based system will be introduced for foreign income and gains.
• This also impacts Inheritance Tax, which will now be based on long-term UK residence rather than domicile status.

2. Increase in Employers’ National Insurance Contributions (NICs)

• A rise in employer NICs from April 2025.
• The Employment Allowance is also changing — important for small businesses relying on this relief.

3. Changes to Capital Gains Tax (CGT)

• The CGT rate on Business Asset Disposal Relief will increase from 10% to 14%.
• Rates on Investors’ Relief and carried interest receipts are also increasing.

4. End of the Furnished Holiday Lettings (FHL) Regime

• From April 2025, the FHL tax advantages (including capital allowances and favourable CGT rules) will be scrapped.
• FHLs will be treated like standard residential lettings.

5. Double Cab Pick-Ups reclassified

• All new double cab pick-ups will now be taxed as cars (not vans).

• This affects company car tax and capital allowances.

6. Increases to Company Car Benefit Charges

• Expect higher Benefit-in-Kind (BIK) costs for company cars, especially on vehicles with higher CO₂ emissions.

7. Stamp Duty Land Tax (SDLT) thresholds reduced

• Buyers may now face higher SDLT bills, particularly on second homes and investment properties.

8. Environmental land management and IHT

• Agricultural Property Relief will be extended to land managed under qualifying environmental schemes.

9. Business Rates Relief changes

• Substantial reform to business rates reliefs, potentially increasing liabilities for small and medium-sized businesses.

10. Changes to creative industry tax credits

• Updates to the Audio-Visual Expenditure Credit (AVEC) may impact film, TV, and gaming industries.

11. Higher late payment penalties for VAT

• New penalty structures are being introduced for late VAT payments.

12. Interest rate on unpaid tax and VAT increases

• Interest on overdue tax and VAT will increase by 1.5 percentage points.

Later Changes to Watch – April 2026 and Beyond

April 2026

• • Compulsory payrolling of taxable benefits – All benefits in kind will need to be processed via payroll.
  • Agricultural & Business Property Relief capped – 100% relief will apply only to the first £1 million of qualifying assets. Above that, only 50% relief will apply.
  • Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) – Becomes mandatory for those with income above £50,000.

April 2027

• Unused pension pots to face Inheritance Tax – Pensions left untouched at death may now be subject to IHT for the first time.

April 2027 & 2028

• MTD for ITSA will extend to:
  • Income above £30,000 from April 2027
  • Income above £20,000 from April 2028

What Should You Do?

With these wide-ranging changes already baked into the legislative pipeline, it’s crucial to review your financial affairs now. Whether you’re a business owner, landlord, or private investor, these updates could affect your tax bill – or your future plans.

Merranti Accounting is here to help.

• Book a year-end planning session
• Review your property or investment strategy
• Get clarity on how the new rules apply to you