It’s important for UK businesses to be ahead of tax changes. Big NICs, CGT allowances, and Tax thresholds changes for 2024–25 Navigating these changes is essential to stay financially fit and compliant.

Key NICs reforms
Major NIC changes in 2024–2025 tax year Since January 6, 2024, staff C1 NICs have been cut from 12% to 10%. Class 2 NICs stopped being due on profits above £1, and the class 4 NICs rate on the self-employed fell from 9% to 8% on April 6, 2024. For their part, employers will be hit with higher fees in 2025–2026. The main NIC rate will rise from 13.8% to 15% per year, and the threshold for additional Class 1 NICs for employers will fall from £9,100 to £5,000 per year. Employers will therefore need to pay higher NICs on lower earnings. With the abandonment of the £100,000 capability cap, the Employment Allowance will rise from £5,000 to £10,500, providing a measure of relief.

CGT Allowances: A Declining Path

CGT’s annual exempt amount (AEA) keeps on shrinking. This AEA is just £3,000 for 2024-25 and 2025-26, compared to £12,300 in 2022-23. More profits will be taxed too. CGT rates changed. As of April 6, 2024, the tax rate on profits from selling homes will decrease from 28% to 24%. The standard rates on other assets have gone up, with the standard rate increasing from 10% to 18% and the higher rate from 20% to 24% for disposals after 30 October 2024. Furthermore, for Their Relief, BADR will rise from 10% to 14% on 6 April 2025, and then to 18% on 6 April 2026. More than ever, it’s important to watch your taxes when you sell.

VAT thresholds—a welcome increase

VAT registration threshold rises from £85,000 to £90,000 – 1 April 2024 (great news for many small businesses). The deregistration threshold leapt from £83,000 to £88,000. For small outfits, the increase makes life simple. Approximately 2.18 million individuals were registered for VAT in the UK during the 2023–2024 period. It reduces the cost of managing the exclusion of numerous small businesses from the VAT system.

Maintaining your lead with professional tips

These tax updates serve as a reminder to budget wisely. Conformity has become critical for ensuring accurate VAT processing, timely VAT filing, and the elimination of Revenue and Customs submissions. Expert assistance—whether from dedicated IT accounting firms or outsourced accounting support—can be critical for businesses navigating these complexities.

Sources:

 GOV.UK—Rates and thresholds for employers 2024 to 2025:

GOV.UK – Capital Gains Tax rates and allowances

GOV.UK – Increasing the VAT registration threshold:

GOV.UK—Annual UK VAT statistics for 2023–2024 commentary: