The change of government and advancement in technology has brought about significant changes over the last few years. And – as we’re probably all aware – there’s more still to come. With the aim of keeping you abreast of what these changes mean for you, the Foxley Kingham team have pulled together a chronological account of some significant recent and upcoming developments, signposting you to further detail where helpful. As always, be sure to get in touch with us if you want advice or guidance in navigating what any of these mean for you and/or your business.
Tax year 2024/25
The two main points to note for Tax year 2024/25, are:
R&D Tax Relief Changes
In April 2024, changes to R&D Tax Reliefs meant that the two existing schemes, were merged into one – now known as Research and Development Expenditure Credit. This will change how your R&D claims are calculated. More detail here.
Cash basis of accounting becomes more widely available
Financial year 2024/25 brought about a shift in how profits are calculated for sole traders and partnerships and the cash basis of accounting is now the default, with an “opt out” for accruals based accounts. If it’s new to you – we’ve pulled together an explanatory piece, to help you assess if it’s right for you and your business.
October 2024
It was announced in the Budget of October 2024 that the general rate of Capital Gains Tax would increase with immediate effect, bringing it in line with the rates for residential property at 18% and 24%. Detail here.
April 2025
That same budget announced a raft of changes for the coming financial year, including the following:
- National Insurance – a double impact for employers as the rate increases from 13.8% to 15%, and the threshold above which contributions are paid, lowers from £9,100 to £5,000. A small mercy is given with employment allowance being increased to £10,500 from £5,000, and large employers’ restriction being removed entirely.
- National Minimum Wage – A series of increases to the National Minimum Wage came into effect in April 2025, with the main rate for those 21 and above rising to £12.21 per hour.
- CGT Business Asset Disposal Relief (BADR) – The rate of tax paid as part of the relief, increased on 6th April 2025 to 14% from 10%, and will increase once again to 18% for 2026/27.
- Double Cab Pick Ups – from April 2025, double cab pick-up trucks will no longer be treated as commercial vehicles for income tax and capital allowance purposes. This means that effectively, double cab pick-ups will be treated as company cars.
- Nil rate thresholds for Stamp Duty Land Tax – From 1st April 2025, the nil rate thresholds decreased, meaning more tax due on properties valued at £125,000 and above. Alongside this, the first time buyers’ nil rate threshold decreased from £425,000 to £300,000 – equating to an extra £6,250 in tax for those above the threshold.
As well as these, other changes to take note of from April include:
- Tax advantages for Furnished Holiday Lets ended for both businesses and individuals, from April 2025.
- Company size thresholds increased, taking effect from accounting periods commencing 6th April 2025. This will also affect audit thresholds. More info here.
- Domicile ceases to be a concept and income tax and CGT will now be based solely on residence. The remittance basis is abolished and subject to certain reliefs, UK residents will be taxed on worldwide income. IHT also becomes residence based.
Read more about the above in the following articles: Tax Planning in the wake of the Budget, The first Labour budget in a decade – here’s all you need to know.
So, what’s coming next? Looking forward to the next twelve months and beyond, we can expect the following:
Autumn 2025
- Companies House identity verification is coming for company directors and persons of significant control – a closer look analysis of this by our team in the coming months.
- We’re expecting the outcomes of the consultation into the Charities SORP and the associated financial thresholds.
January 2026
January next year will bring about key changes to FRS102, applicable to accounting periods commencing from 1st January 2026. The most significant changes will be to revenue recognition and accounting for leases – more info here.
April 2026
- As mentioned above, the rate of tax paid when accessing the BADR rate relief, will rise once again to 18% from 14%.
- The Business Relief and Agricultural Property Relief restrictions affecting Inheritance Tax (IHT) come into force from April 2026.
- Making Tax Digital will be enforced for the self-employed and landlords with income of £50,000+ from April 2026.
We’ll be taking a closer look at each of the above very soon!
April 2027
- Looking even further ahead, April 2027 will mark unused pension pots being included in Estates for Inheritance Tax…
- …And Making Tax Digital will be compulsory for the self-employed and landlords with income of £20,000+.
- The Government have recently announced that the original April 2026 deadline has now been extended by a year, with mandatory payrolling of BiKs coming into effect from April 2027. From this date, all Benefits in Kind (except employment-related loans and accommodation) will have to be reported via payroll More here.
Whether you’re an existing client who wants peace of mind or are unknown to us but would like to have a confidential discussion about how we might help you navigate the new accounting and tax landscape – we’re more than happy to have a chat.
Get in touch if you would like more information about any of the above changes.