The new tax year is just around the corner, starting on 6 April 2025, and it brings major changes that every UK business owner should know about. Whether you run a small business, a limited company, or you’re a sole director, preparing now can save you money and stress later.

Here’s an easy-to-follow checklist of what’s changing and what you need to do to stay compliant — and avoid nasty surprises.

1. Employer National Insurance (NIC) Is Going Up – Budget for It Now

From April 2025, the Employer NIC rate will increase from 13.8% to 15%.
Also, the threshold at which you start paying NIC on employees’ salaries will drop from £9,100 to £5,000/year.

What does this mean for you?

If you employ staff, you’ll be paying NIC on a bigger part of their salary, and at a higher rate.

Example:
If you pay an employee £12,000/year, currently you might not pay much NIC. From April 2025, you’ll be paying NIC on £7,000 of that salary, at 15%.

Action Point:

• Review your payroll budget to make sure you can handle these higher costs.
• If you’re a sole director paying yourself a small salary, speak to us to see if you should adjust it (to avoid overpaying NIC).

2. Minimum Wage and Living Wage Are Increasing – Time to Adjust Salaries

From April 2025, the National Minimum Wage and National Living Wage rates are going up:

• 21 and over: £12.21/hour
• 18 to 20: £10.00/hour
• Under 18 and apprentices: £7.55/hour

Example:
If you employ a 21-year-old working 30 hours/week, their weekly pay will need to be at least £366.30 (up from £343.20).

Action Point:

• Review all salaries and update your payroll accordingly.
• Budget for higher wage costs in the coming year.

3. VAT Threshold Increasing – Will You Need to Register?

Good news for growing businesses: the VAT registration threshold will rise to £90,000 in annual turnover (up from £85,000).

Example:
If your turnover is around £88,000/year, you don’t need to register for VAT yet under the new threshold — but if you grow beyond £90,000, you will.

Action Point:

• Review your projected turnover for 2025/26.
• If you’re close to the threshold, start planning for VAT registration (pricing, invoicing, admin).

4. Changes to R&D Tax Relief – Extra Opportunities for Innovation

If your business does research and development (R&D), enhanced tax relief may be available in 2025/26. The government is adjusting R&D tax credits to encourage innovation, especially for small and medium-sized businesses.

Example:
If you develop new products, software, or processes, you may be able to claim R&D credits to reduce your Corporation Tax bill.

Action Point:

• Check if your business qualifies for R&D relief — even if you haven’t claimed before.
• Talk to us to see if you can benefit.

5. Business Rates Relief Is Being Cut – Especially for Retail, Hospitality, and Leisure

If you run a shop, café, hotel, or similar, business rates relief will reduce from 75% to 40% in 2025/26.

Example:
If you were receiving £7,500 in relief, from April 2025 you may only get £4,000, meaning you’ll need to pay more out of pocket.

Action Point:

• Review your premises costs and factor in higher rates.
• Consider adjusting pricing or budgeting for higher overheads.

6. Key Tax Deadlines You Shouldn’t Miss

Mark these important dates in your calendar:

• 6 April 2025 – Start of the new tax year.
• 31 July 2025 – Deadline for second payment on account for 2024/25 Self Assessment.
• 31 January 2026 – Deadline for online Self Assessment returns and final tax payments for 2024/25.
• 9 months after company year-end – Submit annual accounts and pay Corporation Tax.

Action Point:

• Keep these dates handy and make sure your records are up to date.
• If you’re unsure of any deadlines, ask us for help!

7. New Rules for Directors – Identity Verification

From late 2025, new rules will require all company directors and persons of significant control (PSC) to complete identity verification with Companies House.

Action Point:

• Stay informed about when this comes into effect.
• Be prepared to submit ID documents when requested.

Final Checklist – What You Should Do Now

Review payroll and salary budgets for NIC and wage increases.

Check if you need to register for VAT under the new £90,000 threshold.

Explore R&D tax credits if you innovate or develop products.

Review business rates bills and plan for reduced relief.

Stay on top of tax deadlines to avoid penalties.

Need Help? Let’s Make 2025/26 a Smooth Year for Your Business!

If you’re not sure where to start, AWOC Accountants are here to help. We’ll review your business, help you adjust salaries, check for tax reliefs, and make sure you’re ready for the new tax year — without overpaying.

📞 Contact us today — Monday to Friday, 9 am to 3 pm

Because planning ahead means peace of mind.