As we enter the 2025/26 tax year, Bells Accountants keep you abreast of several significant updates affecting personal and corporate taxation.
Personal Tax: Thresholds and Allowances: Personal Allowance: Remains at £12,570.
Income Tax Bands: Basic rate (20%) up to £37,700.
Higher rate (40%) from £37,701 to £125,140.
Additional rate(45%) above £125,140.
Dividend Allowance: £500.
Savings Allowance:
£1,000 for basic rate taxpayers.
£500 for higher rate taxpayers.
£0 for additional rate taxpayers.
Blind Person’s Allowance: Increased to £3,130.
Marriage Allowance: Transferable amount remains at £1,260.
Rent-a-Room Relief: £7,500.
Trading and Property Allowances: £1,000 each.
Child Benefit:
£26.05 per week for the first child.
£17.25 per week for additional children.
Reduced by 1% for every £200 of income over £60,000; fully repayable if income exceeds £80,000.
PAYE Tax Codes:
Standard Tax Code: 1257L, reflecting the £12,570 personal allowance.
High Earners:
Personal allowance tapers for incomes over £100,000, reducing to zero at £125,140.
Scottish and Welsh:
Taxpayers: Use prefixes ‘S’ and ‘C’ respectively (e.g., S1257L, C1257L).
Capital Gains Tax (CGT)
Annual Exemption:
£3,000 for individuals.
£1,500 for most trusts.
Rates: From 30 October 2024:
18% for basic rate taxpayers.
24% for higher rate taxpayers.
Residential Property Gains:
18% for basic rate taxpayers.
24% for higher rate taxpayers.
Carried Interest Gains:
32% for both basic and higher rate taxpayers.
Business Asset Disposal Relief (BADR):
Lifetime limit:
£1,000,000 Tax rate on qualifying gains: 14%.
Investors’ Relief:
Lifetime limit: £1,000,000.
Tax rate on qualifying gains: 14%.
Inheritance Tax (IHT) Nil Rate Band: £325,000.
Residence Nil Rate Band: £175,000, tapered for estates exceeding £2,000,000.
Rates:
20% on chargeable lifetime transfers.
40% on transfers on or within seven years of death (excess over nil rate band).
36% if 10% or more of the estate is left to charity.
Pensions:
Annual Allowance: £60,000 (with a minimum of £10,000 for high earners).
Tapered Annual
Allowance: Applies when adjusted income exceeds £260,000.
Money Purchase Annual Allowance: £10,000.
Lump Sum and Death Benefit Allowance: £1,073,100.
Lump Sum Allowance: £268,275.
Savings & Investments ISA Limits: £20,000 for standard ISAs.
£4,000 for Lifetime ISAs.
£9,000 for Junior ISAs.
Lifetime ISA Withdrawal Charge: 25%. Corporation Tax
Rates:
19% for profits up to £50,000.
25% for profits
over £250,000.
Marginal relief applies between these thresholds.
Making Tax Digital (MTD)
HMRC is actively promoting the MTD initiative, encouraging accountants to plan for its implementation, choose
appropriate software, and participate in the MTD Pilot ahead of the April 2026 deadline .
HMRC Interest and Penalties
Late Payment Interest: From 6 April 2025, the rate increases to the Bank of England base rate plus 4% for most taxes
Late Payment
Penalties: 3% of the tax outstanding after 15 days.
Contact Bells Accountants
For any queries do give us a call on 020 8468 1087 or email . All our clients have dedicated client managers who are there to guide you.