Employer National Insurance increase. From 6 April 24 the rate of employers’ national insurance contributions (NICs) will rise from 13.8% to 15%, with the threshold falling from £9,100 to £5,000. The Employment Allowance, which allows eligible employers to reduce their NICs liability, will increase from £5,000 to £10,500, providing relief to smaller employers in particular.

Council tax rises – by an average of 5% in England, by 6-15.6% in Scotland and by 4.5%-9.5% in Wales. These take effect 1 April 25.

Increases in Scottish income tax thresholds. The basic and intermediate rate thresholds rise by 3.5% for Scottish income tax payers for the new tax year on Sunday (6 April), which will mean that Scottish taxpayers will pay up to £14.51 less income tax in cash terms (i.e. not allowing for inflation). Other income tax thresholds in Scotland remain frozen, as do all income tax thresholds in England, Wales and Northern Ireland.

Higher stamp duty land tax. From 1 April 25 the temporary cut in SDLT nil rate thresholds in England introduced in 2022 has ended and thresholds have reverted to their previous levels – £300,000 for first-time buyers (the maximum purchase price for first-time buyers relief reduces to £500,000), £125,000 for other purchasers.

Higher interest on late payments. The interest rate HMRC charge for late payment of tax increases by a further 1.5% from 6 April 25 to 8.5%, changing from the Bank of England base rate plus 2.5% to the base rate plus 4% for most taxes. The interest rate HMRC pay in relation to tax repayments remains at 3.5%, set at base rate minus 1%, with a lower limit of 0.5%. This means that the differential between the rate of interest charged by HMRC and the rate paid by HMRC is increasing from 3.5% to 5%.

New reporting requirements for self-employed. From the start of the 2025-26 tax year (6 April) the previously voluntary requirement for taxpayers who start or cease to trade to report the start and end dates on their self-assessment tax return will become a mandatory requirement.

New reporting requirement for company directors. From 6 April, directors of close companies (owner-managed businesses) must separately report dividend income received from their companies and their percentage shareholding on their self assessment tax return, as well as the company’s name and registration number.

Vehicle excise duty extended to EVs. Electric, zero and low emission cars, vans and motorcycles are now subject to the vehicle tax rates that were introduced from 1 April. Rates also go up for most other drivers.

Changes to capital gains tax reliefs. The main rates of CGT rose from 10% and 20% to 18% and 24% respectively on Budget day (30 October 2024) for disposals on/after that date, equalising them with rates for residential property which were previously higher. From 6 April the rates payable by taxpayers eligible for Business Asset Disposal Relief and Investors’ Relief rise from 10% to 14% (ahead of a further rise to 18% in a year’s time). The rate for ‘carried interest’ gains rises from 18-28% to a single rate of 32%.

Landlords lose access to allowances. The separate tax regime for furnished holiday lettings (FHLs) will be scrapped from 1 April 25 for companies and  6 April 25 for other businesses. The current FHL regime means that qualifying holiday lets are treated as a trade for certain tax purposes giving them a tax advantage over non-FHL property businesses. These advantages include the availability of capital allowances and capital gains tax reliefs.

New tax rules for non-doms. Also from 6 April 25 long-term residents face UK tax on their worldwide income and gains even if the UK is not their permanent home (‘domicile’). Previously, under the ‘remittance basis’, non-doms were able to not pay UK tax on their foreign income and gains provided they did not bring it (remit it) into the UK. A Temporary Repatriation Facility will enable former remittance basis users to bring capital representing previous years’ foreign income and gains into the UK with a reduced tax charge. New arrivers to the UK will benefit from up to four years of tax exemption on their foreign income and gains. There is also a new residence-based system for inheritance tax.

Agricultural property relief extended. From 6 April 25 the scope of agricultural property relief (APR) from inheritance tax will be extended to land managed under an environmental agreement. This means land taken out of agricultural production permanently or for an extended period for this reason does not lose relief. Further reaching changes to APR, announced in October’s Budget, are expected to be introduced in a year’s time.

The existing tax regime that applies to non-UK domiciled individuals is to be abolished with effect from April 2025. It will be replaced with a residence-based system which will mean that new arrivers to the UK will be able to claim not to pay tax on their foreign income and gains during their first four tax years of residency, provided they have been non-UK resident for the previous ten tax years. Where a claim is made, personal allowances will be lost.

Eligible employees will also be able to claim overseas workdays relief (OWR) in their first three tax years of residency, which provides UK tax relief in respect of employment income received in respect of overseas duties. This relief will no longer rely on the income earned being left offshore, but full details of the eligibility conditions that will have to be met for it to apply have yet to be released. Transitional arrangements for current UK resident non-UK domiciled individuals are to include:

A two year repatriation facility to allow foreign income and gains arising in the tax years up to and including 2024/25 to be remitted to the UK and taxed at a flat 12% tax rate. Remittances made after the two year window will be taxed at standard income and capital gains tax rates.

If the remittance basis has been claimed and the individual is neither legally nor deemed UK domiciled by 5 April 2025, there will be an option to rebase the value of foreign capital assets owned personally on 5 April 2019 to their value on that date. There will also be a temporary 50% exemption for individuals who were remittance basis users on the taxation of foreign income in the first tax year of the new regime (2025/26). Foreign capital gains in that year will be taxable in full.

Business Investment Relief will remain available after 5 April 2025 for qualifying investments of foreign income and gains from remittance basis years.
Trust protections are to be abolished. At a high-level, the intention is to tax settlors on both UK and foreign trust income and gains that arise from 6 April 2025 (unless the new four year regime applies), with no further tax on distributions made by the trustees. Pre-6 April 2025 foreign income and gains are to be taxable if matched to trust distributions, which HM Treasury comment could be to settlors or beneficiaries.

Draft legislation is to be published on the above points for technical consultation. The draft legislation will contain further detail on the above points.

A consultation will be held on moving to a residence-based inheritance tax system. Whilst subject to consultation, the policy documents released today indicate that the new rules may involve charging inheritance tax on worldwide assets after ten years of UK residence and for deemed UK domicile to remain for ten years after leaving the UK.

No changes to the existing rules will be made before April 2025. The existing system is to continue to apply to foreign property settled on foreign trusts before 6 April 2025 (note under existing legislation specific rules apply such that certain foreign assets that derive value from UK residential property are subject to inheritance tax).

Current non-UK domiciled individuals who remain resident in the UK in 2025/26 and individuals who have arrived in the UK since 6 April 2022, or who come to the UK following these announcements, who have not been tax-resident in the UK in any of the 10 tax years prior to the year of arrival.

The income and capital gains tax changes will be effective from 6 April 2025.

The inheritance tax changes are subject to consultation, but the government would like any new rules to apply from 6 April 2025

From 3 to 6 February 2025, the UN intergovernmental negotiating committee (Committee) held an organisational session to draft a UN Framework Convention on International Tax Cooperation (Convention). Key decisions included the composition of the committee’s bureau, choosing “prevention and resolution of tax disputes” as the topic for the convention’s second early protocol, and adopting a simple majority decision-making process for the convention negotiations with a two-thirds majority required for protocols.

The UN is moving to take a larger role in international tax development. There will be opportunities for stakeholders to contribute to the committee’s work, and companies should monitor developments and engage when possible. The UN is seeking to conclude negotiations by 2027.

Where multinationals shift profits to low- or no-tax locations where they have little or no economic activity or erode tax bases through deductible payments like interest or royalties, it costs countries USD 100-240 billion in lost revenue annually. A two-pillar solution reveals the latest tax developments evolving around a two-pillar solution and the key building blocks that are foundational to building up your readiness.

On 1 February 2025, the Indian finance minister presented the Union Budget for 2025–26. The budget focuses on various development measures that include boosting manufacturing and ‘Make in India’, enabling employment-led development, investing in people, the economy, and innovation, securing energy supplies, promoting exports, and nurturing innovation.

On 16 December 2024, the Legislative Assembly of the Macau Special Administrative Region (Macau SAR) passed the bill for approval of the Tax Code (new legislation). This new legislation not only clarifies and strengthens the tax legal system in the Macau SAR but also establishes a modern tax system in line with international standards. The Chief Executive of the Macau SAR signed and ordered the publication of the new legislation on 28 December 2024, which was then officially published in the Macau SAR Gazette on 30 December 2024. To allow sufficient time for relevant sectors to adopt, the majority of the provisions of the new legislation will take effect on 1 January 2026. However, the definition of tax resident and certain amendments to the stamp duty regulations have come into effect as of 1 January 2025 and 31 December 2024, respectively.

The Income Tax (Exemption) Order 2025 (2025 Order) was gazetted on 13 February 2025 and provides exemption from income tax on various payments from specified Labuan persons.

On 3 January 2025, Vietnam signed the multilateral competent authority agreement on the exchange of country-by-country reports (MCAA CbCR).

This states what this means for companies and groups in Vietnam which fall within the CbCR rules.

Among the developments in early 2025 are:

• Canada –Release of draft legislation to increase the capital gains inclusion rate
• Cyprus – Extension of application of debt restructuring provisions
• France – Finance Law for 2025 finally adopted
• United Arab Emirates – UAE implements Pillar Two effective 1 January 2025
• United States – Trump Administration announces steep tariffs on Canada, Mexico and China
• India – Guidelines issued for application of PPT under India tax treaties