Tax Year 2025: Everything UK Employers Need to Know (Without the Headache) 📊

📈 1. Employer National Insurance Hike (from 6 April 2025) 

 

Heads up, employers 👀 

 

NICs have gone up from 13.8% to 15%, and the threshold has dropped from £9,100 to £5,000/year. 

 

💸 That means more costs for over 900,000 employers this tax year. 

If payroll is one of your biggest expenses—it’s time to review your cash flow strategy. 

 

✅ Make sure your payroll software is up to date. 

 

💰 2. Employment Allowance Doubled! 

 

Some relief for small businesses 🙌 

 

From 6 April 2025, the Employment Allowance jumps from £5,000 to £10,500/year. And the old £100k cap? Gone. 

 

📊 865,000 small businesses are expected to pay no employer NICs this year. 

 

🖥 You can apply through your payroll software—apply early to benefit sooner! 

 

🧾 3. Other NI Updates You Should Know 

 

From 6 April 2025: 

 

Lower Earnings Limit (LEL): £6,500 

 

Small Profits Threshold (SPT): £6,845 

 

Class 2 NICs: £3.50/week 

 

Class 3 NICs: £17.75/week 

 

🎖Bonus: The NIC relief for hiring veterans has been extended to April 2026—save on up to £50,270 of their salary! 

 

💼 4. Minimum Wage Boost 

 

Effective 1 April 2025, here are the new rates: 

 

£12.21 (21+) 

 

£10.00 (18–20) 

 

£7.55 (under 18 & apprentices) 

 

💡 Tip: Check your payroll provider is ready. 

📉 If wage rises impact your profit margins, chat with your advisor for cost-saving ideas. 

 

👶 5. Statutory Pay Increases + Bigger Relief 

 

From 6 April 2025: 

 

Parental pay (SMP, SPP, SAP, etc.): £187.18/week 

 

Statutory Sick Pay: £118.75/week 

 

🧾 Small employer relief is now 108.5% (yes, you can claim more than you pay). Larger employers can still reclaim 92%. 

 

🏴 6. Scottish Tax Changes for 2025/26 

 

Scotland has a new Advanced Tax Band and updated income brackets 👇 

 

Up to £12,570 – 0% 

 

£12,571–£15,397 – 19% 

 

£15,398–£27,491 – 20% 

 

£27,492–£43,662 – 21% 

 

£43,663–£75,000 – 42% 

 

£75,001–£125,140 – 45% 

 

Over £125,140 – 48% 

 

📍The higher, advanced, and top bands are frozen until 2026/27. 

 

📣 Scottish employers: You might need to offer extra perks or salary bumps to stay competitive for high earners. 

 

💸 7. Capital Gains Tax Alert 

 

Selling your business or assets soon? Heads up: 

 

BADR & IR rates rise from 10% to 14% in April 2025 

 

Then jump again to 18% in 2026 

 

💡 Talk to your accountant about the timing of any big sales to avoid extra tax. 

 

📚 8. Apprenticeship Levy = Growth & Skills Levy 

 

Big upgrade incoming! 🎓 

 

In 2025, the Apprenticeship Levy becomes the Growth & Skills Levy, backed by £40M. 

 

New benefits: 

 

✅ Wider training options 

 

✅ Easier access for small businesses 

 

✅ Courses tailored to local skill needs 

 

✅ Support for high-demand industries 

 

Training just got a whole lot more flexible. 

 

🏪 9. Relief for Retail, Hospitality & Leisure Continues 

 

Good news if you’re in retail, hospitality, or leisure! 👇 

 

The 40% Business Rates Relief is staying for 2025/26, up to £110,000 per business. 

 

📌 Small business multiplier: frozen at 49.9p 

📌 Standard multiplier: increased to 55.5p 

 

💼 More savings while we wait for permanent lower tax rates in 2026/27. 

 

👶 10. New Neonatal Leave Law (from April 2025) 

 

Parents now get up to 12 extra weeks of paid leave if their newborn is in hospital for 7+ continuous days within their first 28 days of life. 

 

📌 Applies to babies born on or after 6 April 2025. 

 

✅ Update your HR policies & payroll systems 

 

✅ Make sure staff & managers are aware 

 

🎓 11. Student Loan Thresholds Updated 

 

For the 2025/26 tax year: 

 

Plan 1, 2, & 4 thresholds have increased 

 

Plan 3 (Postgrad): stays at £21,000 

 

Repayments start once an employee’s income hits the threshold. Make sure your payroll is using the latest rates. 

 

📆 12. Other 2025/26 Updates You Can’t Miss 

 

🧾 Making Tax Digital (MTD): 

Sole traders can start voluntarily from April 2025—mandatory if earning £50k+ by April 2026. 

 

🍻 Alcohol Duty Cuts: 

 

Draught pint duty down by 1p 

 

Spirits duty stamps scrapped from 1 May 2025 

 

🏡 Furnished Holiday Lettings (FHL): 

 

FHLs now taxed like regular rental properties. No more special treatment. 

✅ Final Thoughts 

 

A lot’s changed this tax year—but don’t stress. 

 

📌 Stay on top of updates 

 

📌 Work with your payroll provider 

 

📌 Chat with your advisor to keep your business compliant & cash-flow happy 

 

👉 Save this post and share it with your team! 

 

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