Upcoming UK Business Tax Changes in 2025
Business tax changes 2025 are coming in hot this April. it is crucial for UK businesses to prepare for these changes that will impact costs, compliance, and financial planning.
Increase in Emoloyers' National Insurance
From April 2025, employers’ National Insurance contributions will increase from 13.8% to 15%. Additionally, the secondary threshold—the income level at which businesses start paying—will reduce from £9,100 to £5,000 annually (£417 per month or £96 per week).
Changes to Business Rates.
Businesses in retail, hospitality, and leisure will still benefit from business rates relief, but the discount is being reduced from 75% to 40%, capped at £110,000 per business.
Additionally, business rates will now be assessed based on property values from 1st April 2021, rather than the previous 2017 valuations.
The small business multiplier remains 49.9p for 2025-26, while the standard multiplier rises to 55.5p, increasing costs for many businesses.
Adjustments to Capital Gains Tax Allowance.
For businesses selling assets, the Capital Gains Tax (CGT) rate is increasing.
- From 6th April 2025, the CGT rate rises to 14%.
- From 6th April 2026, the rate increases further to 18%.
This follows previous hikes on 30th October 2024, when CGT rates rose from 10% to 18% (lower rate) and from 20% to 24% (higher rate). Businesses considering asset sales should factor in these changes when planning their financial strategies.
Rise in Vehicle Excise Duty
Businesses using vehicles should prepare for increased Vehicle Excise Duty (road tax) from April 2025.
- The standard rate will rise by £10 to £165.
- Older, higher-emission vehicles will see significantly higher tax rates.
- The first-year tax for high-emission vehicles (76g/km CO₂ and above) will double.
Even businesses that don’t rely on transport directly may experience higher delivery and operational costs due to these increases.
Abolition of Non-Domicile Status
From April 2025, the non-domicile (non-dom) tax status will be abolished. This means:
- The UK will shift to residence-based taxation, meaning individuals who previously benefited from non-dom status will be taxed on worldwide income and gains, even if they don’t bring those funds into the UK.
- A Temporary Repatriation Facility will allow affected individuals to repatriate funds to the UK at a discounted tax rate for a three-year period.
Strategic Considerations for tax changes in 2025
These business tax changes 2025 present both challenges and opportunities. In rder to mitigate risks it’s important to take a fresh look at your business. Review the following to help prepare:
- Review staffing costs and budgets to prepare for the National Insurance increase.
- Assess property investments and asset disposal strategies in light of the business rates and CGT changes.
- Evaluate potential operational cost increases due to higher road tax and tax rule changes.
To navigate these shifts effectively, consult financial advisors and plan ahead. Staying informed and adaptable will help businesses remain resilient in an evolving financial landscape.
For tailored financial solutions, Partnership Invoice Finance can assist businesses in securing funding to support growth and cash flow stability.
About the Author
Chris Falby
With over two decades dedicated to helping businesses in the South East thrive, Chris, Sales and Marketing Director, brings a wealth of knowledge in securing financial assistance for SMEs. His career began in mainstream banking, where he gained valuable experience managing advances. This foundation, coupled with his extensive network and expertise in independent funding, allows Chris to provide tailored invoice finance solutions that meet the unique needs of each client.
