As we move into 2025, a number of key tax changes are set to impact businesses and individuals alike. From National Insurance increases and ongoing corporate tax consultations to rising late payment penalties and new rules for foreign nationals, staying ahead and informed is essential.
Our tax experts outline the most important changes to be aware of in the year ahead and share practical advice on staying on top of your tax responsibilities.
Employment Taxes
National Insurance Changes
Senior Manager, Neil Maslen, explains that from April 2025, the National Insurance rate for employers will rise from 13.8% to 15% while the starting threshold will decrease. As a result, business owners should consider tax-efficient ways to reward their employees while managing costs.
A simple but effective approach is implementing a salary sacrifice agreement for employees’ pension contributions. When structured correctly, this allows employees to contribute to their pensions without incurring National Insurance, resulting in both the employer and employee saving money.
Corporate Tax
Partner, Andrew Tall, highlights two significant consultations from the government that could impact businesses: one on Land Remediation Relief and another on Transfer Pricing.
Land Remediation Relief was previously proposed for abolition in the OTS review of tax reliefs published ahead of the 2011 Budget. At the time, the Government agreed that the relief was not meeting its policy objective. However, following consultation, it was retained.
It remains in the policy firing line and companies engaged in land development or otherwise incurring costs to remove contamination should closely monitor the consultation when it is published and consider submitting a response.
In its Corporation Tax Roadmap, the Government has plans to consult on several international tax matters, including:
All medium-and large-sized international groups need to pay attention to these consultations as they could have a significant effect on the documentation requirements and, in some cases, tax liabilities. Businesses operating across borders should stay informed and be prepared to adapt.
Personal Tax
Late Payment Penalties
Samuel Dewes, Partner, emphasises paying your tax on time. With HMRC’s late payment interest already at 7.25% (2.5% over the bank of England base rate) and set to rise again in April 2025 by a further 1.5%, timely tax payments are more important than ever.
Missing deadlines can lead to penalties, missed claims, and delayed rebates, which can be particularly problematic for those relying on repayments. Submitting provisional figures can help avoid penalties, ‘lock in’ claims, and keep tax obligations on track.
Taking a proactive approach by gathering tax return information throughout the year, rather than waiting until after deadlines, can ultimately save time and money and reduce the chances of overlooking something.
Relocating Abroad
Director, Daniel Tomassen advises that if you are looking at relocating abroad following recent Budget changes, its essential to seek guidance and advice both from your UK tax adviser and a tax adviser in your destination country.
There may be planning opportunities that could provide long-term tax savings. For example, rebasing the tax cost of assets before becoming tax resident in the new jurisdiction can help optimise your tax position. Proper planning in advance can ensure a more tax-efficient transition in both the UK and the destination jurisdiction.
New Tax Rules for Foreign Nationals
Partner, Adam Bonell, explains that the recent changes to the UK’s tax rules on the taxation of foreign nationals introduces opportunities for individuals to rearrange their financial affairs to benefit from the new legislation. These changes are not restricted to ‘non-doms’ but may also benefit those currently living overseas.
Those individuals who are planning to move overseas need to ensure they factor in flexibility into their planning to minimise unforeseen changes, as governments around the world reassess their expatriate tax regimes, with many restricting or cancelling favourable status previously used to entice foreign nationals to relocate.
Please do not hesitate to get in touch if you would like to find out more.
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