The 2025/26 tax year starts on 6 April 2025. Several changes take effect this month, mostly for employers. This post sets out what is changing and what stays the same.
For employers
Employer National Insurance is 15%. It applies to pay above £5,000 a year per employee, down from £9,100. See our earlier posts for what this costs and how to manage it.
The Employment Allowance is £10,500. It reduces your employer NIC bill. Employers whose bill was £100,000 or more can now claim it too. Other eligibility rules still apply.
Class 1A NIC on benefits is 15%. This is the employer charge on taxable benefits such as company cars.
Minimum wage rates are higher from 1 April 2025.
Aged 21 and over: £12.21 an hour
Aged 18 to 20: £10.00 an hour
Under 18, and apprentices under 19 or in their first year: £7.55 an hour
Statutory pay rates are higher. Statutory Sick Pay is £118.75 a week. Statutory Maternity Pay is 90% of average weekly earnings for the first six weeks, then £187.18 a week (or 90%, if lower). Statutory Paternity Pay is £187.18 a week (or 90% of average weekly earnings, if lower).
If you use payroll software, check it has updated to the new rates. Make sure you have claimed the Employment Allowance for 2025/26.
For business owners and company directors
Business Asset Disposal Relief is 14%. This is the Capital Gains Tax rate on qualifying business sales from 6 April 2025, up from 10%. It is due to rise to 18% from April 2026.
HMRC charges more interest on late tax. From 6 April 2025, late payment interest is the Bank of England base rate plus 4%, up from plus 2.5%. Paying on time matters more than before.
Companies House identity checks have started. Directors and people with significant control can now verify their identity with Companies House. It is voluntary for now and is expected to become compulsory from autumn 2025.
Company size limits are higher. For financial years starting on or after 6 April 2025, a company is micro-sized if it meets two of these: turnover up to £1 million, balance sheet up to £500,000, and 10 or fewer employees. Normally this must apply for two years in a row. More companies can now file simpler accounts.
For landlords
Furnished holiday lets are now taxed like other rental property. The special rules ended on 5 April 2025 for individuals and 31 March 2025 for companies.
Making Tax Digital is one year away. If your qualifying income (rental and self-employed income before expenses) was over £50,000 in 2024/25, you must use MTD for Income Tax from 6 April 2026. The limit falls to £30,000 from April 2027. At the Spring Statement on 26 March, the government said it plans to lower it to £20,000 from April 2028.
What stays the same
Personal allowance: £12,570
Higher rate starts at £50,270 (England, Wales and Northern Ireland)
Dividend allowance: £500
Capital Gains Tax allowance: £3,000
Corporation Tax: 19% on profits up to £50,000, 25% above £250,000, with marginal relief in between (for a 12-month year with no associated companies)
VAT registration threshold: £90,000
Summary
Most of the April 2025 changes affect employers: higher National Insurance, a bigger Employment Allowance and higher minimum wage rates. Business owners also face a higher BADR rate and higher interest on late tax. For landlords, the holiday let rules have ended and MTD starts next April for the first group.
If you would like us to check how these changes affect you, book a call or contact us.