Navigating the 2025 Tax Landscape: Key Updates for UK Individuals and Businesses

As the new tax year begins, it’s crucial for individuals and businesses alike to understand the latest changes in the UK tax system. At SJC Chartered Accountants, we’re here to help you navigate these updates with confidence and clarity.

Income Tax and National Insurance: What’s New?

From 6 April 2025, employees will benefit from a further cut in National Insurance Contributions (NICs). The main rate of employee Class 1 NICs has dropped from 10% to 8%. Self-employed individuals will also see a reduction in Class 4 NICs from 8% to 6%, in addition to the abolition of Class 2 NICs for profits above the small profit threshold. These changes are designed to ease the tax burden for working individuals.

Child Benefit Reforms on the Horizon

A major overhaul of the Child Benefit system has been announced, with a new income-based assessment approach expected by April 2026. In the interim, the High Income Child Benefit Charge (HICBC) threshold has been raised to £60,000, with a tapered withdrawal up to £80,000. This shift is a welcome relief for many families and could prompt a review of income planning strategies.

Furnished Holiday Lettings: A Tax Perk Phased Out

The Furnished Holiday Lettings (FHL) regime was abolished from April 2025, removing favourable treatment for qualifying short-term holiday lets. This includes loss of capital allowances and Business Asset Disposal Relief eligibility. If you own or are planning to invest in FHLs, now is the time to reassess your strategy with professional guidance.

VAT and Business Investment Incentives

With the VAT registration threshold remaining at £90,000, business can take advantage of this along with the Full Expensing regime for capital investment in plant and machinery, offering 100% relief for qualifying expenditure.

Let Us Help You Stay Ahead

At SJC Chartered Accountants, we are dedicated to helping our clients make the most of every opportunity while remaining fully compliant with HMRC requirements. Whether you're adjusting to NIC changes, reassessing your property portfolio, or planning for future investments, our team is here to support you.

For tailored advice or to schedule a consultation, get in touch with us today at www.sjc-chester.com