What are the main UK tax changes from April 2025?

The main UK tax changes from April 2025 include: Employer National Insurance increasing from 13.8% to 15%, Secondary Threshold reducing from £9,100 to £5,000, Employment Allowance increasing from £5,000 to £10,500, Capital Gains Tax main rates increasing to 18% (basic) and 24% (higher), and income tax thresholds remaining frozen until 2028.

How much is Employer National Insurance from April 2025?

From April 2025, Employer National Insurance is 15% on employee earnings above £5,000 per year (previously 13.8% above £9,100). This is a 1.2 percentage point increase and a lower threshold, significantly increasing employer costs.

What is the Employment Allowance for 2025/26?

The Employment Allowance for 2025/26 has increased to £10,500 (from £5,000). This allowance reduces an employer's Class 1 National Insurance liability. More businesses now qualify as the £100,000 eligibility threshold has been removed.

Are income tax thresholds changing in 2025?

No, income tax thresholds remain frozen for 2025/26. The Personal Allowance stays at £12,570, Basic Rate band at £50,270, and Higher Rate threshold at £125,140. These thresholds will remain frozen until at least April 2028.

What are the Capital Gains Tax rates from April 2025?

From April 2025, Capital Gains Tax main rates are 18% for basic rate taxpayers and 24% for higher rate taxpayers (previously 10% and 20%). Residential property CGT rates remain at 18% and 24%. The Annual Exempt Amount stays at £3,000.

UK Budget 2025 Tax Changes | Complete Guide to April 2025 Tax Updates

💼

Employer NI Rate

13.8%

15%

+1.2% increase

📉

Employer NI Threshold

£9,100

£5,000

Lower threshold

🏢

Employment Allowance

£5,000

£10,500

Doubled for small businesses

📈

CGT Main Rate (Higher)

20%

24%

+4% increase

💰

CGT Main Rate (Basic)

10%

18%

+8% increase

❄️

Income Tax Thresholds

Frozen

Frozen until 2028

Continued freeze

Employer National Insurance Changes

The largest revenue-raising measure in the Autumn Budget 2024, employer National Insurance contributions see significant increases from April 2025.

Element	2024/25 (Old)	2025/26 (New)	Change
Employer NI Rate	13.8%	15%	+1.2%
Secondary Threshold	£9,100/year	£5,000/year	-£4,100
Per Employee Minimum	£175/week	£96/week	Lower threshold
Employment Allowance	£5,000	£10,500	+£5,500
EA Eligibility Threshold	NI bill < £100,000	No limit	Removed

Cost Impact Example

Employee earning £30,000

Old: £2,884 employer NI

New: £3,750 employer NI

Increase: +£866/year

Employee earning £50,000

Old: £5,644 employer NI

New: £6,750 employer NI

Increase: +£1,106/year

Small Business Relief The increased Employment Allowance of £10,500 means businesses with NI bills under this amount pay NO employer NI. This protects approximately 865,000 small businesses and charities.

Calculate Your Employer NI Costs

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Capital Gains Tax Increases

Capital Gains Tax on non-property assets increases significantly, with main rates now aligned with residential property CGT rates.

Asset Type	Basic Rate (Old → New)	Higher Rate (Old → New)
Shares, Investments, Other Assets	10% → 18%	20% → 24%
Residential Property	18% (unchanged)	24% (unchanged)
Business Asset Disposal Relief	10% → 14% (April 2025) → 18% (April 2026)
Investors' Relief	10% → 14% (April 2025) → 18% (April 2026)

Important: Immediate Effect for Main Rates The new 18%/24% CGT rates for shares and investments took effect from 30 October 2024 (Budget Day), not April 2025. Only Business Asset Disposal Relief changes are phased.

Annual Exempt Amount

The Capital Gains Tax Annual Exempt Amount remains at £3,000 for 2025/26 (reduced from £6,000 in 2023/24 and £12,300 in 2022/23).

Example: £50,000 Share Sale Profit

Higher rate taxpayer:

Old Tax: (£50,000 - £3,000) × 20% = £9,400

New Tax: (£50,000 - £3,000) × 24% = £11,280

Increase: +£1,880

Example: Business Sale (BADR)

£1m business disposal:

2024/25: £1m × 10% = £100,000

2025/26: £1m × 14% = £140,000

2026/27: £1m × 18% = £180,000

Income Tax Threshold Freeze Extended

Income tax thresholds remain frozen until at least April 2028, continuing the "fiscal drag" effect that pulls more earnings into higher tax bands.

Band	Threshold	Rate	Status
Personal Allowance	£12,570	0%	Frozen until 2028
Basic Rate	£12,571 - £50,270	20%	Frozen until 2028
Higher Rate	£50,271 - £125,140	40%	Frozen until 2028
Additional Rate	Over £125,140	45%	Frozen until 2028

Fiscal Drag Impact If thresholds had risen with inflation since 2021, the Personal Allowance would be approximately £14,800 and the Higher Rate threshold approximately £59,200. The freeze means millions more people now pay higher rates.

Scottish Income Tax Rates 2025/26

Scotland maintains its own income tax rates with six bands:

Band	Income	Rate
Starter	£12,571 - £14,876	19%
Basic	£14,877 - £26,561	20%
Intermediate	£26,562 - £43,662	21%
Higher	£43,663 - £75,000	42%
Advanced	£75,001 - £125,140	45%
Top	Over £125,140	48%

Inheritance Tax Changes

Significant changes to Inheritance Tax on pensions and agricultural/business property from April 2027.

Key Changes from April 2027

Pensions in IHT: Inherited pension pots will be included in estate value for IHT purposes from April 2027
Agricultural Property Relief (APR): 100% relief limited to first £1m of combined agricultural and business assets; 50% relief above £1m
Business Property Relief (BPR): Same £1m cap applies; combined limit with APR
AIM Shares: Reduce to 50% relief (from 100%)

IHT Element	Current	From April 2027
Nil-Rate Band	£325,000	£325,000 (frozen)
Residence Nil-Rate Band	£175,000	£175,000 (frozen until 2030)
APR/BPR (first £1m)	100%	100%
APR/BPR (above £1m)	100%	50%
Inherited Pensions	Exempt	Included in estate

Farm Succession Planning Alert Farmers and family business owners should urgently review succession plans. The £1m cap on 100% relief could significantly impact inheritance planning for family farms and businesses.

National Minimum Wage Increases

The National Living Wage and Minimum Wage rates increase from April 2025:

Category	Current Rate	April 2025 Rate	Increase
National Living Wage (21+)	£11.44	£12.21	+6.7%
18-20 Year Olds	£8.60	£10.00	+16.3%
Under 18	£6.40	£7.55	+18.0%
Apprentice Rate	£6.40	£7.55	+18.0%

Full-Time NLW Earnings A full-time worker (37.5 hours/week) on the National Living Wage will earn £23,809 annually from April 2025 (up from £22,308).

Stamp Duty Land Tax Changes

The temporary SDLT threshold increases introduced in September 2022 will end on 31 March 2025:

Threshold	Until 31 March 2025	From 1 April 2025
Main Residence Nil-Rate	£250,000	£125,000
First-Time Buyer Nil-Rate	£425,000	£300,000
First-Time Buyer Maximum	£625,000	£500,000
Additional Property Surcharge	3%	5%

Second Home Buyers The surcharge for additional properties (buy-to-let, second homes, companies) increases from 3% to 5% from 1 April 2025, adding £5,000 tax per £250,000 of property value.

Pension Tax Updates

Annual Allowance

The pension Annual Allowance remains at £60,000 for 2025/26 (or 100% of earnings if lower).

Money Purchase Annual Allowance

The MPAA remains at £10,000 for those who have flexibly accessed their pension.

Lifetime Allowance Abolished

The Lifetime Allowance was fully abolished from April 2024 and remains so for 2025/26.

State Pension

Pension Type	2024/25 Weekly	2025/26 Weekly
New State Pension (full)	£221.20	£230.25
Basic State Pension	£169.50	£176.45

Triple Lock Maintained The State Pension rises by 4.1% in April 2025 under the Triple Lock guarantee (highest of: 2.5%, inflation, or earnings growth).

Business Tax Updates

Corporation Tax

Main Rate: 25% (profits over £250,000) - unchanged
Small Profits Rate: 19% (profits under £50,000) - unchanged
Marginal Relief: Applies between £50,000-£250,000

Capital Allowances

Full Expensing: 100% first-year allowance on qualifying plant and machinery - made permanent
Annual Investment Allowance: £1,000,000 - permanent

VAT

Registration Threshold: £90,000 (from April 2024)
Deregistration Threshold: £88,000
Private School Fees: VAT at 20% from 1 January 2025

Dividend Tax Rates

Band	Rate (unchanged)
Basic Rate	8.75%
Higher Rate	33.75%
Additional Rate	39.35%

Dividend Allowance: £500 (unchanged from 2024/25)

Implementation Timeline

30 October 2024

Capital Gains Tax main rates increase (18%/24%) took immediate effect

1 January 2025

VAT on private school fees begins (20%)

1 April 2025

Stamp Duty threshold relief ends; Additional property surcharge rises to 5%

6 April 2025

Tax year 2025/26 begins: Employer NI 15%, new thresholds, National Minimum Wage increases, BADR rate rises to 14%

6 April 2026

Business Asset Disposal Relief rate rises to 18%

6 April 2027

Pensions included in IHT; APR/BPR £1m cap takes effect

Frequently Asked Questions

Will employees pay more National Insurance?

No, employee National Insurance rates remain unchanged at 8% (between £12,570-£50,270) and 2% (above £50,270). The increases only affect employers, not employees directly.

How much extra will my employer pay in NI for me?

For a £30,000 salary employee, employers will pay approximately £866 more per year. For a £50,000 salary, approximately £1,106 more. Use our Employer NI Calculator for exact figures.

Will small businesses be protected?

Yes, the Employment Allowance doubles to £10,500, meaning businesses with NI bills below this pay nothing. The £100,000 eligibility threshold is also removed, helping more businesses qualify.

When did CGT rates actually change?

Main CGT rates (18%/24%) changed immediately on Budget Day, 30 October 2024. Only Business Asset Disposal Relief has phased increases (14% from April 2025, 18% from April 2026).

Should I sell assets before April 2025?

The main CGT rate increase already applies (from October 2024). For assets qualifying for BADR, timing could be important - the rate rises from 10% → 14% in April 2025 → 18% in April 2026. Consult a tax advisor for significant disposals.

Will income tax bands ever increase?

The freeze is confirmed until April 2028. After this, the government has indicated thresholds may rise with inflation, but this is not guaranteed and depends on future Budget decisions.

Calculate Your Tax Position

Use our free calculators updated for 2025/26

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Official Sources

Autumn Budget 2024 - GOV.UK | Income Tax Rates - HMRC | National Insurance - GOV.UK

Information accurate as of January 2026. Tax rates and thresholds may change. This guide is for general information only.

UK Budget 2025 Tax Changes