12 tax changes being introduced this week

They include increases to some taxes and levies as well as changes to rules governing reporting requirements and how ‘non-doms’ and landlords are taxed. 

Most of the changes take effect on Sunday 6 April, the start of the new tax year, though a few will start from today, Tuesday 1 April. 

Ellen Milner, CIOT Director of Public Policy, said: 

“The start of the new tax year brings plenty of change for taxpayers and their employers. 

“Some of this week’s changes are simply tax rises to raise revenue for public spending – the employer national insurance increase, for example. Others, such as the revised tax treatment of non-doms and those who let holiday homes, whilst also aimed at raising revenue, are significant structural reforms. Then there are the alterations to tax administration, such as additional reporting requirements for sole traders and company directors, which are largely about improving compliance.” 

Twelve April 2025 tax changes for taxpayers to be aware of 

1. Employer National Insurance increase. From Sunday (6 April) the rate of employers’ national insurance contributions (NICs) will rise from 13.8% to 15%, with the threshold falling from £9,100 to £5,000. The Employment Allowance, which allows eligible employers to reduce their NICs liability, will increase from £5,000 to £10,500, providing relief to smaller employers in particular. 
2. Council tax rises – by an average of 5% in England, by 6-15.6% in Scotland and by 4.5%-9.5% in Wales. These take effect today (1 April).
3. Increases in Scottish income tax thresholds. The basic and intermediate rate thresholds rise by 3.5% for Scottish income tax payers for the new tax year on Sunday (6 April), which will mean that Scottish taxpayers will pay up to £14.51 less income tax in cash terms (i.e. not allowing for inflation). Other income tax thresholds in Scotland remain frozen, as do all income tax thresholds in England, Wales and Northern Ireland. 
4. Higher stamp duty land tax. As of today (1 April) the temporary cut in SDLT nil rate thresholds in England introduced in 2022 has ended and thresholds have reverted to their previous levels - £300,000 for first-time buyers (the maximum purchase price for first-time buyers relief reduces to £500,000), £125,000 for other purchasers.  
5. Higher interest on late payments. The interest rate HMRC charge for late payment of tax increases by a further 1.5% on Sunday (6 April) to 8.5%, changing from the Bank of England base rate plus 2.5% to the base rate plus 4% for most taxes. The interest rate HMRC pay in relation to tax repayments remains at 3.5%, set at base rate minus 1%, with a lower limit of 0.5%. This means that the differential between the rate of interest charged by HMRC and the rate paid by HMRC is increasing from 3.5% to 5%. 
6. New reporting requirements for self-employed. From the start of the 2025-26 tax year (6 April) the previously voluntary requirement for taxpayers who start or cease to trade to report the start and end dates on their self-assessment tax return will become a mandatory requirement. 
7. New reporting requirement for company directors. From Sunday (6 April), directors of close companies (owner-managed businesses) must separately report dividend income received from their companies and their percentage shareholding on their self assessment tax return, as well as the company’s name and registration number.
8. Vehicle excise duty extended to EVs. Electric, zero and low emission cars, vans and motorcycles are now subject to the vehicle tax rates that were introduced today (1 April). Rates also go up for most other drivers. 
9. Changes to capital gains tax reliefs. The main rates of CGT rose from 10% and 20% to 18% and 24% respectively on Budget day (30 October 2024) for disposals on/after that date, equalising them with rates for residential property which were previously higher. On 6 April the rates payable by taxpayers eligible for Business Asset Disposal Relief and Investors’ Relief rise from 10% to 14% (ahead of a further rise to 18% in a year’s time). The rate for ‘carried interest’ gains rises from 18-28% to a single rate of 32%. 
10. Landlords lose access to allowances. The separate tax regime for furnished holiday lettings (FHLs) will be scrapped from today (1 April) for companies and Sunday (6 April) for other businesses. The current FHL regime means that qualifying holiday lets are treated as a trade for certain tax purposes giving them a tax advantage over non-FHL property businesses. These advantages include the availability of capital allowances and capital gains tax reliefs. 
11. New tax rules for non-doms. Also on Sunday (6 April) long-term residents face UK tax on their worldwide income and gains even if the UK is not their permanent home (‘domicile’). Previously, under the ‘remittance basis’, non-doms were able to not pay UK tax on their foreign income and gains provided they did not bring it (remit it) into the UK. A Temporary Repatriation Facility will enable former remittance basis users to bring capital representing previous years’ foreign income and gains into the UK with a reduced tax charge. New arrivers to the UK will benefit from up to four years of tax exemption on their foreign income and gains. There is also a new residence-based system for inheritance tax. 
12. Agricultural property relief extended. From Sunday (6 April) the scope of agricultural property relief (APR) from inheritance tax will be extended to land managed under an environmental agreement. This means land taken out of agricultural production permanently or for an extended period for this reason does not lose relief. Further reaching changes to APR, announced in October’s Budget, are expected to be introduced in a year’s time.