Most of the changes take effect on Sunday, 6 April, the start of the new tax year, though a few started from the first day of April – here is all the changes you need to know about
Several tax changes were introduced this week – with more set to be introduced this weekend when the new tax year starts. Changes include increases to some taxes and levies, changes to reporting requirements, and changes to 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 started from the first day of 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 out 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.” Here are 12 tax changes occurring in April this year which taxpayers will need to be aware of.
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Employer National Insurance increase
From Sunday, April 6, 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 National Insurance liability – will also increase from £5,000 to £10,500 – providing relief to smaller employers.
Council tax rises
From April 1, council tax rose by an average of 5% in England, 6% to 15.6% in Scotland, and 4.5% to to 9.5% in Wales. Now is the time to check if you’re eligible for a council tax discount – for example, if you’re living alone, you get 25% off your council tax bill. Finally, see if you can challenge your council tax band. If you’re in too high of a band, you may be due thousands of pounds back, plus lower bills going forward.
Increases in Scottish income tax thresholds
The basic and intermediate rate thresholds rise by 3.5% for Scottish income taxpayers for the new tax year on Sunday, April 6. Other income tax thresholds in Scotland remain frozen, as do all income tax thresholds in England, Wales, and Northern Ireland. From Sunday, Scottish tax bands will be:
- Personal Allowance – up to £12,570
- Starter rate – £12,571 to £15,397
- Scottish basic rate – £15,398 to £27,491 (Previous rate: £14,877 to £26,561)
- Intermediate rate – £27,492 to £43,662 (Previous rate: £26,562 to £43,662)
- Higher rate – £43,663 to £75,000
- Advanced rate – £75,001 to £125,140
- Top rate – Over £125,140
Higher Stamp Duty land tax
As of April 1, the temporary cut in Stamp Duty Land Tax nil rate thresholds in England introduced in 2022 ended.
Under the previous rules in England and Northern Ireland, you have to pay stamp duty if your property is your only residence and is worth over £250,000. This higher rate was introduced in September 2022 but returned to its previous level of £125,000 after March 31.
The threshold for first-time buyer relief also dropped from £425,000 to £300,000, with the maximum purchase price for first-time buyers relief reducing to £500,000 and £125,000 for other purchasers.
Higher interest on late payments
From April 6, HMRC is hiking the official rate of interest for late payments on taxes by 1.5% to 8.5%. The late payment rate currently sits at 7% and has been at this level since February 25, 2025.
HMRC interest rates are set in legislation and are linked to the Bank of England base rate, so would rise and fall alongside it. The late payment interest rate was previously set at the Bank’s base rate plus 2.5%. However, this changed in te Autumn Budget and now it is set as the Bank’s base rate – which is currently 4.5% – plus 4%.
New reporting requirements for self-employed
From April 6 – so the start of the 2025-26 tax year – 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.
New reporting requirement for company directors
From Sunday, 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.
Car tax changes
From April, Vehicle Excise Duty (VED) rates – which is more commonly known as car tax – rose in line with Retail Price Index (RPI) inflation. Car tax is paid every year and is a legal requirement for all vehicles registered in the UK. You need to pay tax when the vehicle is first registered and this covers the car for the next 12 months.
You then pay vehicle tax every six or 12 months after this at a different rate. The first time you register your car, the rate you pay is based on your vehicle’s CO2 emissions, and this is what’s changing.
Rates for cars emitting between one and 50 grams of CO2 per kilometre, including hybrid vehicles, have increased from £10 to £110 for 2025-26 for the first year. Similar hikes have come for cars emitting 51-75g/km of CO2, with the cost going from £30 to £130.
The biggest price hike has been seen for owners of vehicles that emit 76g/km of CO2 and above as rates have “doubled from their previous level. The lowest rate in this category – 76-90g/km – sat at £135, but under the new changes, it now sits at £270.
Brits who buy the most polluting petrol and diesel cars (over 255g/km) from April 1, 2025, now have to fork out £5,490 – up from the previous £2745.
First-year VED rate for new zero-emission vehicles now sits at £10 until the 2029-30 tax year – which is £10 more than what they were paying before April. From the second tax payment onwards, EV drivers now pay the standard rate, which is £195.
Changes to Capital Gains Tax reliefs
Capital Gains is a tax charged if you sell, give away, exchange, or dispose of an asset—such as a second home, shares in companies, art, or jewellery – and make a profit or “gain.” The tax applies to individuals, but it also applies to company owners, partners in a business, and self-employed people.
In the October Budget, the lower rate of Capital Gains Tax (CGT) rose from 10% to 18%, while the higher rate rose from 20% to 24%. On April 6, the rates payable by taxpayers eligible for Business Asset Disposal Relief and Investors’ Relief rise from 10% to 14%. This will rise even further next year to 18%. The rate for “carried interest” gains will also rise from 18-28% to a single rate of 32%.
Landlords lose access to allowances
The separate tax regime for furnished holiday lettings (FHLs) was scrapped on April 1 for companies and on Sunday, April 6 it will b scrapped for other businesses. The current furnished holiday lettings rules mean 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.
New tax rules for non-doms
Reeves announced that the “non-dom” status – which means claimants can avoid paying tax in the UK on overseas earnings – will be abolished from April 2025. Non-dom describes a UK resident whose permanent home – or domicile – is outside the UK for tax purposes.
Currently, a non-dom only pays UK tax on the money they earn in the UK. They do not have to pay taxes to the UK government on money made elsewhere in the world. From Sunday, long-term residents face UK tax on their worldwide income and gains even if the UK is not their permanent home.
Under the previous rules, 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 also be put in place to enable former remittance basis users to bring money representing previous years’ foreign income into the UK with a reduced tax charge. New arrivers to the UK will also 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.
Agricultural property relief extended
From Sunday April, 6 April the scope of Agricultural Property Relief (APR) from Inheritance Tax will be extended to include 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 tax relief.
If you’re a landowner considering changing the use of your land to deliver environmental schemes, this is something you should be aware of. Further reaching changes to the relief – which was first announced in October’s Budget last year – are expected to be introduced in a year’s time.
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