6th April marks the end of the current tax year and the start of a new one.

It’s a great opportunity to review your personal finances and ensure you’ve made the most of your tax-efficient savings and investments, such as ISAs and pension contributions. You can read more about these in our previous article: 6 things to do before the end of every financial tax year.

The new tax year is also often the time when previous Budget announcements come into effect. Indeed, last year, Chancellor Rachel Reeves announced several significant changes to taxes and reliefs for businesses in the Autumn Budget. While some were implemented immediately, others are set to start in April.

Reeves claimed that the Budget would raise an additional £40 billion, with analysis revealing that a large portion of the burden will fall on businesses. Although most businesses are likely to pay more tax under the upcoming changes, a financial planner can work with you and your accountant to help limit the costs and ensure your business is positioned for stability and future success.

Read on to discover four key changes coming in the new tax year that could impact your business.

Most businesses are likely to pay more tax under the upcoming changes.

1. Employer National Insurance contributions are increasing

The headline announcement in the Autumn Budget was the decision to increase the rate of employer National Insurance contributions (NICs) from 13.8% to 15%.

Reeves also announced a reduction to the earnings threshold at which employers start paying NICs on their staff salaries – “the secondary threshold” – from £9,100 a year to £5,000. Reuters reports that these changes are predicted to bring in an additional £25 billion a year.

To help smaller businesses offset some of these costs, the Employment Allowance – which provides NIC relief – will increase from £5,000 to £10,500 a year.

Furthermore, the £100,000 threshold for total employer NICs, which previously restricted larger businesses from claiming the allowance, is being abolished. This means that more businesses, including those with higher NIC liabilities, will now be eligible for the Employment Allowance.

Regardless of the relief, the changes to NICs could significantly impact your business’ net income. So, now could be a good time to start exploring salary sacrifice options that might help lower your employee wage bill.

A financial planner can work with you and your accountant to determine how much the new NICs will cost you. They can also help you assess various salary sacrifice options, such as pension contributions, to determine the best approach for your company and staff.

2. Capital Gains Tax has increased, and business reliefs are changing

The government increased Capital Gains Tax (CGT) rates for non-property holdings on 30 October 2024, with the basic rate rising from 10% to 18% and the higher rate from 20% to 24%. However, Business Asset Disposal Relief (BADR), which reduces CGT when selling or disposing of a business or business assets, currently at 10%, will increase to 14% on 6 April. A further rise to 18% is scheduled for 2026.

Additionally, the lifetime limit for Investors’ Relief – a tax break that lowers CGT on the sale of shares in unlisted companies – was reduced from £10 million to £1 million in October last year. The Investors’ Relief rate will increase in line with BADR. So, with CGT already higher and the relief rate still to change, you could end up paying significantly more tax on the sale of your business or business assets.

Your accountant can calculate how much of your lifetime allowance for Investor’s Relief and BADR you’ve already used. Meanwhile, a financial planner can help structure any business or asset sales to maximise tax efficiency, ensuring you retain more of your proceeds.

3. The National Living Wage and other statutory payments are rising

From 6 April, the National Living Wage (NLW) for workers aged 21 and over will rise from £11.44 to £12.21 an hour, benefiting over 3 million workers.

For a full-time employee on the NLW, the rise will equate to an annual pay increase of £1,400.

Other wage increases include:

  • The National Minimum Wage (NMW) for 18- to 20-year-olds will increase from £8.60 to £10 an hour.
  • Apprentices will see the largest pay rise, with hourly wages rising from £6.40 to £7.55.
  • Statutory Sick Pay (SSP) will increase from £116.75 to £118.75 a week.
  • Statutory Maternity Pay (SMP), along with paternity, adoption, shared parental, and bereavement pay, will rise from £184.03 to £187.18 a week.

Combined with NIC changes, these wage increases could significantly raise your total business costs, especially when combined with the reforms to employer NICs.

Again, exploring salary sacrifice options with a financial planner can help reduce your wage bill while ensuring your employees continue to receive valuable benefits.

4. Additional tax and business policy changes coming into effect in April

Several other key changes will impact businesses starting in April 2025, including adjustments to business rates relief.

Since 2020, retail properties have benefited from a 75% business rates discount, capped at £110,000. However, this relief is set to expire in April 2025.

Although Reeves introduced a 40% business rates relief for the retail, hospitality, and leisure sectors for 2025/26, the reduction from 75% to 40% means many businesses will see their rates nearly double.

Additionally:

  • Fuel duty will remain frozen
  • Corporation Tax will stay at 25%
  • Non-dom status will be abolished, replaced by a residence-based tax regime, with a transition period to allow wealth relocation to the UK.

Forecasting the effect these changes will have on your business can be difficult, but a financial planner can work with you and your accountant to assess the implications and develop strategies to manage costs.

An Amber River financial planner can help ensure the continued success of your business

The changes coming into effect in April are likely to have a considerable impact on many businesses. However, working with an Amber River financial planner can help ensure your business remains resilient and well-prepared, and they can explore strategies to help improve your financial position.

By taking a proactive approach, you can help protect your business’s financial health and position it for long-term success.

Get in touch

To speak to one of our financial planners today, call 0800 915 0000, or alternatively use our contact form to arrange an appointment.

Business Owners Business tax planning Capital Gains Tax New tax year