As the end of the 2024/25 tax year approaches on 5 April 2025, it’s vital to keep yourself informed about the tax changes that could reshape your financial landscape. While the world of personal taxes may seem complex and overwhelming, grasping these changes can empower you to make informed financial decisions.

🚀 Key tax changes on the horizon:

1. Frozen thresholds leading to higher liabilities:

The personal allowance will remain unchanged at £12,570. With inflation on the rise, you might find yourself unexpectedly facing higher tax liabilities. Likewise, the Inheritance Tax (IHT) threshold remains frozen at £325,000 until 2030, posing potential challenges for your estate planning. Recognising these thresholds now can set you on a path to effective future strategies.

National Minimum Wage will change starting from April 2025, and will be as follows:

• 21 years old and older – £12.21

• 18 to 20 – £10.00

• under 18 – £7.55

• apprentice - £7.55

2. Capital Gains Tax increase from 30 October 2024.

For basic rate taxpayers, the Capital Gains Tax (CGT) rose from 10% to 18%. Meanwhile, higher and additional rate taxpayers will see an increase from 20% to a staggering 24%. This means that profits from selling your investments or valuables may incur a heavier tax burden. It’s essential to maintain precise records of your asset sales, as you can offset gains against losses to help lighten the tax load.

3. Stamp Duty changes for property buyers.

Homebuyers, take note! Starting 1 April 2025:

- The stamp duty threshold for primary residences will drop from £250,000 to £125,000, meaning that purchases above this amount will incur stamp duty at the applicable rate.

- First-time buyers will also feel the pinch, with their threshold falling from £425,000 to £300,000.

4. Council Tax increases.

Brace yourselves for a rise in council tax bills, as local authorities are permitted to increase charges by up to 5% for an average Band D property. This could translate to an increase of approximately £109 for the average Band D property in England.

5. Road Tax and EV changes.

From 1 April 2025, electric vehicle (EV) owners will no longer enjoy road tax exemption. A first-year rate of £10 will apply to EVs, alongside a subsequent annual fee of £195, with additional charges for higher-priced models. It’s crucial to factor these costs into your budget if you currently drive an EV or are contemplating a new purchase.

6. Increased duties on tobacco and alcohol.

Tobacco duty has increased, leading to a higher tax burden for smokers, while alcohol duty rates have been raised for non-draught products starting from 1 February 2025. Expect these changes to influence your spending habits.

Remember, knowledge is power! Stay tuned for more updates and tips to optimise your finances as we embrace 2025. 🌟