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8 notable tax changes coming into effect from April 2025

From April 2025, noteworthy tax changes have come into effect impacting both individuals and companies, with some of the changes already implemented by the Finance Act 2025.

We set out below a summary of the main tax changes.

1. Employers’ National Insurance: From 6 April 2025 onwards, the top rate of secondary National Insurance Contributions (NICs) paid by employers on an employee’s earnings increased from 13.8% to 15%.
2Employment Allowance changes to benefit small businesses: The Employment Allowance has been increased from £5,000 to £10,500 and is no longer restricted to employers with a prior tax year secondary NIC liability of £100,000 or less.

  1. Non-domiciled individuals: This fiscal year marks the end of the tax rules for non-UK domiciled individuals ("non-doms") with effect from 6 April 2025 and the implementation of a new residence-based regime for foreign income and gains (FIG) as well as Inheritance Tax (IHT). For more information, please refer to our Newsletter “Changes to the Taxation of non-UK domiciled individuals and carried interest”.
  2. CGT rates: The tax rate for Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) has begun to increase in stages, rising from 10% to 14% from 6 April 2025, before reaching 18% from 6 April 2026. Also from 6 April 2025, the lower and higher rates of CGT for carried interest gains (18% and 28%) have been replaced with a flat rate of CGT of 32% (before further changes from 6 April 2026).
  3. Residential rates of SDLT: For transactions with an effective date on or after 1 April 2025:
    - the residential nil rate band reverted to £125,000 (from £250,000);
    - the first-time buyers’ relief nil rate band reverted to £300,000 (from £425,000); and
    - the maximum transaction value for first-time buyers’ relief reverted to £500,000 (from £625,000).
  4. Making Tax Digital: HMRC has introduced Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA), affecting individuals with self-employment or property income. For more information, please refer to our Newsletter “Changes to Making Tax Digital (MTD) for Self-Assessment Taxpayers from April 2026”
  5. Tax return information requirements: From 6 April 2025, new compulsory tax return requirements apply to taxpayers who start or cease to trade. In addition, a director of a “closely controlled” company must include in their tax return: the name and registered number of the company, the value of dividends received and their percentage shareholding in the company.
  6. ATED: The annual tax on enveloped dwellings (ATED) is a tax on non-natural persons (including companies) with interests in UK dwellings valued at more than £500,000. The annual chargeable amounts for ATED have been uplifted in line with inflation.