Wednesday 26th February 2025

The start of a new tax year always brings a few changes to your wallet. Whether you’re claiming your yearly tax refund, paying your Council Tax bill or even buying a house, keeping a sharp eye on what HMRC’s up to as the tax year ticks over is always worthwhile.

Here’s a quick run-down of some of the main financial headlines for April 2025.

Stamp Duty

Stamp Duty Land Tax (SDLT) is a charge you pay in England and Northern Ireland when you’re buying most types of land or residential properties. Scotland and Wales have their own systems for this, but either way the tax you pay is based on the value of what you’re buying.

Like most types of tax, though, there’s a threshold for when you start to pay it. Back in 2022, a temporary threshold of £250,000 was set, meaning properties worth less than that didn’t count for Stamp Duty (for first-time buyers, the temporary threshold was £425,000).

From the 1st of April 2025, those temporary thresholds are coming to an end, meaning Stamp Duty will kick in on properties worth over £125,000 instead, or £300,000 for first-time buyers. The change is expected to hit around 74,000 buyers across England who can’t complete their in-progress property transactions before the deadline, with 25,000 of those being first-timers.

The Energy Price Cap

On the 25th of February 2025, energy regulator Ofgem announced that the Energy Price Cap would be going up by 6.4% - significantly more than the 5% increase that had been expected. This means that yearly fuel costs for a typical household will rise by £111 to a total of £1,849. Naturally, this figure is only an estimate based on average household energy use, and only affects customers who aren’t on a fixed tariff. As always, the amount you actually end up paying is going to depend on how much gas and electricity your household burns through.

Income Tax

As we push on into the 2025/26 tax year, more of us will be paying tax for the first time, or paying some of it at a higher rate. The standard tax-free Personal Allowance has been frozen at £12,570, so as people’s earnings go up year on year, more people find themselves either hitting the 20% basic rate threshold or reaching the £50,271 limit where some of their income now qualifies for higher rate Income Tax of 40%.

National Insurance

While the rates and thresholds for National Insurance Contributions (NICs) for employees won’t be changing on the 6th of April, there’s still a major shake-up coming for employers. What’s happening is the ‘Secondary Threshold’ where employers start to pay National Insurance Contributions is dropping from £9,100 to £5,000. At the same time, the rate for those employer NICs is rising from 13.8% to 15%. The goal of all this is to raise an extra £25 billion through the National Insurance system, but employers are finding it painful, with some suggesting the move could end up costing thousands of jobs across the country.

Wages and Pensions

More changes are on the way for employers with the National Living Wage going up to £12.21 per hour, a rise of 6.7%. For workers between 18 and 20 years old, the rise will be 16%, bringing it the rate to £10 per hour.

At the same time, the State Pension is set to go up by 4.1%, to keep pace with the rise in average earnings. This will bring weekly payments up to £230.25.

Council Tax

We always know to expect a rise in Council Tax whenever the new tax year rolls around. For 2025/26, the rules allowing Councils in England to bump up the Council Tax rates by 5% without a local referendum are still in effect. While many households will be bracing for the increase as usual, there are actually a few Councils that have requested an exception to the 5% limit because of the challenges they’re facing. These Councils include:

  • Newham, Windsor & Maidenhead: 9%
  • Bradford: 9.99%
  • Trafford, Somerset, Birmingham: 7.49%

Inheritance Tax

Changes in the rules for Inheritance Tax are looking to close a few loopholes that saw ‘non-domiciled’ UK taxpayers (people who pay tax in the UK but have their permanent home somewhere else) only having Inheritance Tax applied to their UK assets, with their overseas assets exempted.

From the 6th of April 2025, Inheritance Tax is moving over to a ‘residence-based’ system, with different rules for who needs to pay. Under the new system, overseas assets can still count for Inheritance Tax if the owner has been a UK ‘tax resident’ for 10 of the last 20 years – no matter where they live now. People who leave the UK are still eligible to pay Inheritance Tax for the following 10 years, at which point their overseas assets become exempt again. It’s a pretty big change in the whole system, removing some hefty tax protections from non-domiciled UK residents.

Keep checking back for more tips and updates from the UK’s leading tax refund experts. Whatever kinds of tax you pay, you’re always better off with RIFT.