Top takeaways:

National Insurance

From April 2025, employers will pay national insurance contributions (NIC) on an employee’s earnings above £5,000 at the rate of 15%. The employment allowance will increase from £5,000 to £10,500 per year from 6 April 2025. Eligible employers can offset the employment allowance against their NIC liability, potentially reducing it to £nil.   We claim the employment allowance for eligible clients.

Benefits in Kind

Reporting of benefits in kind via payroll software will become mandatory as of April 2026, with the exception of employment related loans and accommodation as these can be difficult to value within the tax year.   If you have a director’s loan from your OMB and do not pay interest this is a benefit and would need to be reported. We can help you understand this and outline your options.

Corporation Tax

The government has confirmed that it will make no changes to the following during the life of this parliament:

• the main and small profits rates of corporation tax, marginal relief and the associated thresholds;
• the rates of writing down allowances and the availability of the annual investment allowance and the structures and buildings allowance;

There is also talk of modernisation of the administration of the corporation tax system (potentially involving further digitalisation), with further details to be provided in the spring.  We’ll keep you up to date with changes.

Business rates

The government will permanently lower multipliers for the retail, hospitality and leisure (RHL) sectors for properties with a rateable value (RV) under £500,000 from 2026/27. This will be funded by a higher multiplier on all properties with an RV of £500,000 and above.

In the shorter term, a 40% relief will be available to RHL businesses on their rates in 2025/26, up to a cash cap of £110,000 per business. In addition, the small business multiplier will be frozen in 2025/26.

Capital gains tax (CGT) and stamp duty land tax SDLT rates increased in Budget

CGT

From 30 October 2024, the main rates of capital gains tax (CGT) will be increased to 18% and 24%.

The 10% rate of CGT for disposals attracting business asset disposal relief (BADR) will increase to 14% (from April 2025) and to 18% (from April 2026).

The lower and higher rates of CGT applying to gains on residential property are unchanged at 18% and 24% respectively.  We can calculate the impact of this on any assets you are looking to dispose.

SDLT

Some changes to the rates of stamp duty land tax (SDLT) were announced. With effect from 31 October 2024:

• the supplement for purchases of second or additional homes by individuals is increased from 3% to 5%; and
• for companies and ‘non-natural persons’ buying UK residential property worth over £500,000, the rate of SDLT is increased from 15% to 17%.

The withdrawal of the temporary residential rates of SDLT will go ahead as planned on 31 March 2025. For transactions with an effective date on or after 1 April 2025: 

• the residential nil rate band will revert to £125,000;
• the first-time buyers’ relief nil rate band will revert to £300,000; and
• the maximum transaction value for first-time buyers’ relief will revert to £500,000.

The Budget included significant changes to inheritance tax (IHT)

IHT nil rate band

Currently, IHT is payable on gifts made by a person up to seven years before their death. IHT is charged where the value exceeds their available nil rate band (£325,000) at the date of the gift.  The amount of the nil rate band has been £325,000 since 6 April 2009, but has been supplemented by the residence nil rate band since 6 April 2017. 

At the Autumn Budget, the government announced that the following will be fixed until 5 April 2030:

• the nil-rate band at £325,000;
• the residence nil-rate band at £175,000; and
• the residence nil-rate band taper, starting at £2m.

Agricultural Property Relief (APR) currently allows a person to pass on the agricultural value of some property in the UK free of IHT. 

Business Property Relief (BPR) is available on assets including business or an interest in a business; land, buildings or machinery used in a business; and shares in an unlisted company.

The government will reform APR and BPR from 6 April 2026, restricting the level of reliefs currently available.

If you’d like help planning the disposal of any of your assets in a tax efficient way please get in touch.

The above article is for general information only and does not constitute advice. The information was up to date at the time of publishing and may not be relevant to your particular circumstances.