Running a business is no small feat. Between juggling clients, managing cash flow, and, let’s be honest, keeping your sanity intact, staying on top of tax law changes probably isn’t at the top of your to-do list. But with 2025 bringing some important updates to UK tax laws, it’s worth giving it a little attention (before it sneaks up on you).
Whether you’re a sole trader, a small business owner or running a limited company, these changes could affect how you operate, what you owe, and how you report it. The good news? We’re here to break it all down for you. No confusing jargon, no scary accountant speak, just the key facts you need to know to stay compliant and keep things running smoothly.
In this guide, we’ll cover the new UK tax rules from increases in employers' National Insurance contributions to rising road taxes, plus a few practical tips to help you avoid headaches, and potential penalties, along the way.
Disclaimer: The information in this article is for general guidance only and should not be considered financial advice. All figures and tax rates are correct at the time of writing but may change. Always refer to official sources, such as GOV.UK, or consult a qualified professional for the most up-to-date information.
1. National Insurance for Employers: Costs Are Going Up
Big changes are on the horizon for employers in 2025. From April 2025, the rate of National Insurance for employers will increase, and the threshold at which employers start paying it will be significantly reduced. These changes were announced in the Autumn Budget to help raise £25 billion for public finances.
Here’s what you need to know:
Employer National Insurance Rates and Thresholds
2024/2025 Tax Year:
Rate: 13.8%
Threshold: £9,100 per year (£758 per month or £175 per week)
From April 2025:
Rate: 15%
Threshold: £5,000 per year (£417 per month or £96 per week)
Why These Changes Matter
With the reduction in the secondary threshold and the increased rate, the amount you pay in National Insurance for each employee will rise. This change could have a noticeable impact on your payroll costs, especially for small businesses with multiple employees.
The Employment Allowance Boost
The good news? The Employment Allowance will also increase from £5,000 to £10,500 in April 2025. This allowance lets eligible businesses reduce the amount of Employer National Insurance they pay each year.
For example, if your Employer NIC bill is £10,500 or less, you may not need to pay anything after claiming the full allowance. For businesses with higher NIC bills, the allowance helps offset the total amount you owe, reducing overall payroll costs.
What Should Employers Do?
Review Your Payroll Costs Early: Plan for how these changes will affect your budget in the next financial year.
Maximise the Employment Allowance: Make sure your business is eligible and take full advantage of the increased allowance.
Seek Professional Advice: Strive Business Limited can help you understand the full impact on your business and explore cost-saving strategies.
For full details and updates, visit GOV.UK’s Employer National Insurance page.
2. Changes to Business Rates: What’s New in 2025
If you’re in retail, hospitality, or leisure, you’re probably familiar with business rates relief. The good news? Relief is sticking around for another year. The not-so-good news? It’s shrinking in 2025, which could leave you paying more.
Here’s what you need to know:
Business Rates Relief Changes
2024/2025 Tax Year: Business rates relief was set at 75%.
2025/2026 Tax Year: Relief is dropping to 40%, with a cap of £110,000 per business.
This change could significantly affect your outgoings, particularly if your business operates multiple properties.
Updated Rateable Values
As part of the business rates overhaul, properties will now be assessed using market conditions from 1 April 2021, reflecting changes in property values since 2017. This means your rateable value could have gone up, or down. It’s worth double-checking your new rateable value to see how it affects your costs.
Small Business and Standard Multipliers
In 2025/2026, the small business multiplier will remain at 49.9p, while the standard multiplier will increase to 55.5p. These rates are used to calculate how much business rates you owe, so even a small change can have a noticeable impact.
Why These Changes Matter
For many businesses, reduced relief and updated rateable values mean higher bills. While some businesses might benefit from lower rateable values, others will see their costs rise, particularly those in high-value areas.
What Should Businesses Do?
Check Your New Rateable Value: Visit the Valuation Office Agency website to see your updated rateable value and make sure it’s accurate.
Review Your Budget: Build these changes into your financial planning for 2025/2026.
Get Professional Advice: We can help you understand how the new rates affect your business and explore relief options.
3. Capital Gains Tax Changes: What You Need to Know
If you’re planning to sell business assets, 2025 is bringing some important changes to Capital Gains Tax (CGT) that could increase your tax bill. These changes are part of a phased adjustment, so knowing what’s coming will help you plan ahead and avoid surprises.
Here’s what you need to know:
Capital Gains Tax Rates Are Rising
From 6 April 2025: The rate for business asset disposal relief will rise to 14%.
From 6 April 2026: The rate will increase again to 18%.
These changes follow adjustments introduced in October 2024, when the lower CGT rate for most assets rose to 18%, and the higher rate jumped to 24%.
Why These Changes Matter
If you’re planning to sell business assets, such as property or shares, these rising rates mean you’ll pay more in tax. For some, it might make sense to bring forward planned disposals to lock in a lower rate before the next increase.
Even if your disposal qualifies for business asset disposal relief (formerly entrepreneurs’ relief), the rate is still rising, so timing is everything.
What Should Business Owners Do?
Review Your Asset Plans: If you’re considering selling assets, assess whether it makes sense to do so before the next rate increase in April 2025.
Seek Advice on Reliefs: Maximise your use of available reliefs to reduce your tax liability.
Talk to a Professional: We can help you plan your asset strategy and minimise your tax exposure.
4. Vehicle Excise Duty Increases: What It Means for Your Business
If your business relies on vehicles, it’s time to factor in higher Vehicle Excise Duty (VED), commonly known as road tax. From April 2025, road tax rates will rise for all types of vehicles. The increase will be small for most, but for vehicles with higher emissions, the costs could climb significantly.
Here’s What’s Changing:
For most newer vehicles (registered after 1 April 2017), the standard rate of road tax will rise by around £10.
For older, higher-emission vehicles, the increase will be steeper. First-year tax for cars emitting over 76g/km of CO2 will double compared to current rates.
Even if you don’t drive for work, rising vehicle costs could still affect your business, especially in logistics and delivery services, where higher road tax costs can lead to increased fulfilment fees.
Why These Changes Matter
If your business operates a fleet or depends on vehicle transport, these increases can quickly add up. For those with low-emission vehicles, the impact will be minimal, but older vehicles may need to be replaced sooner than planned to avoid escalating costs.
What Should Business Owners Do?
Review Your Vehicle Fleet: Consider the long-term savings of upgrading to lower-emission or electric vehicles.
Factor in Rising Logistics Costs: Adjust your pricing or delivery budgets to account for potential increases.
Stay Informed on New Rules: The landscape for road tax and driving laws is always evolving, keep an eye on the latest updates to avoid surprises.
5. Non-Dom Status Abolished: What It Means for You
The non-domicile (non-dom) tax regime is coming to an end in April 2025, marking one of the biggest changes to UK tax rules in recent years. For those who’ve used non-dom status to avoid UK tax on overseas income, things are about to change dramatically.
What’s Changing?
From April 2025, non-dom status will be replaced with residence-based tax rules, meaning individuals will be taxed on their worldwide income and gains, regardless of whether they bring the money into the UK.
To help with the transition, the government is introducing a Temporary Repatriation Facility, a three-year scheme that allows former non-doms to bring their assets into the UK at a discounted tax rate.
The government has promised to make this transitional period more generous, but it’s clear the goal is to replace the outdated non-dom system with something seen as fairer and more transparent.
Why These Changes Matter
If you’ve relied on non-dom status, this change could significantly affect your tax obligations. With worldwide income now taxable, it’s essential to review your assets and understand how the new rules will affect you.
For some, the Temporary Repatriation Facility offers a rare opportunity to bring assets into the UK at a reduced tax rate. Taking advantage of this could make a big difference to your long-term tax position.
What Should Affected Individuals Do?
Review Your Tax Position: Work with a tax adviser to fully understand how the new rules affect you.
Consider the Repatriation Facility: This window won’t last forever, so explore whether it’s worth bringing overseas assets into the UK under the discounted rate.
Plan for the Future: With the non-dom regime ending, now is the time to develop a long-term tax strategy based on the new rules.
Wrapping It Up: What These 2025 New UK Tax Rules Mean for Your Business
2025 is bringing some significant New UK Tax Rules for UK businesses, and while not all of them are welcome, being prepared will help you stay ahead. Here’s a quick recap of what you need to know:
National Insurance for Employers – The rate is increasing to 15%, and the threshold is dropping, meaning higher payroll costs for employers. But the Employment Allowance boost will help ease the impact for eligible businesses.
Changes to Business Rates – Relief continues for retail, hospitality, and leisure, but it’s reduced to 40%. Make sure you’ve checked your new rateable value to avoid surprises.
Capital Gains Tax Adjustments – If you’re selling business assets, rising capital gains tax rates mean it’s worth reviewing your timing and strategy to reduce your tax liability.
Vehicle Excise Duty Increases – Road tax is on the rise, especially for older vehicles with higher emissions, which could affect logistics and delivery costs.
Non-Dom Status Abolished – The non-dom tax regime is being replaced with residence-based rules, meaning worldwide income will now be taxable. The Temporary Repatriation Facility could offer some relief for ex-non-doms.
How We Can Help
Navigating these changes might feel overwhelming, but you don’t have to do it alone. At Strive Business Limited, we provide tailored support to help your business stay compliant and thrive:
Bookkeeping Services to keep your finances organised and up to date.
Accountants with expertise in tax planning and business strategy to help you stay on top of these changes.
Virtual Assistants to take care of the admin, freeing up your time to focus on growing your business.
Get in touch today and let’s talk about how we can help you stay ahead of the 2025 tax changes and beyond.
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