The end of the financial year is nearly here, which calls for some administrative duties.
At this time, a raft of responsibilities will fall on people and businesses of all sizes. From filing tax returns to accounting for upcoming changes in legislation, there’s a lot to do. In this piece, we’ll explain everything you should know before the tax year ends to help inform your actions.
In 2025, the financial year will end on the 5th of April, having started on the 6th of April the year prior.
This rule is consistent every single year, so keeping a mental note of this date is generally advised.
When it comes to business finances, the terms ‘financial year’ and ‘tax year’ can sometimes be used to describe the same thing.
Sometimes, though, businesses will have different financial years depending on how their finances are filed. This could mean running between one January and the next, in accordance with the actual calendar, for example.
Each tax year usually brings about a few changes to the way in which businesses operate. This could be an increase in national insurance contributions or a mandatory uplift in minimum wage. Regardless, all businesses should be aware of these changes prior to the new year starting.
Here are some of the most relevant changes to bear in mind in your new year tax planning:
Announced in the 2024 Autumn budget, the rate of National Insurance Contributions that businesses must pay has been increased by 1.2%, with the figure now sitting at 15%.
This change takes place on the 6th of April, the day the new tax year begins. In addition to this rate change, the secondary threshold for NICs has also been reduced to £5,000.
To support this, the Employment Allowance will be increased from £5,000 to £10,500, while the £100,000 threshold it previously had will be removed.
More details on this can be found in this government policy paper.
Also taking effect in the 2025 tax year will be the changes outlined to minimum wage. These too were highlighted in the most recent budget statement and will affect all national minimum wage figures.
18-20-year-olds will see the biggest change, as their wage goes from £8.60 per hour to £10. This is followed by increases to minimum pay for 16-17-year-olds and apprenticeships, which will grow by £1.15 to £7.55. The minimum wage for those 21 and over will increase by £0.77 to £12.21.
In late 2024, the government introduced amendments to the Small Companies and Groups (Accounts and Directors’ Report) Regulations of 2008, via a new piece of legislation dubbed The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024.
The most impactful change that businesses will see from this in the new tax year is the changing classification of company sizes based on turnover, balance sheet size, and number of employees.
New rules in 2025 will see a 4% increase on the rate of Capital Gains Tax that applies to BADR, totalling 14%. This rate is set to rise in the following tax year of 2026, to a rate of 18%.
In late 2024, new SSP rates were announced for the 2025 tax year onwards, which saw them increase by £2 per week, totalling £118.75. As of writing, there have not been any changes announced to the number of days an employer must give.
We want your business to thrive at all times of the year. With our business savings products, you can stay ahead of the game by setting aside funds in preparation for changes to how you do business.