In the Autumn of 2024, the newly appointed Labour government laid out their plans for 2025 in their first budget as government. Here are some key points as we tumble through Q1 and into Q2 2025.
VAT for Private Schools
Private schools in England will start being subject to VAT from January 2025, and charitable relief for business rates will also be removed. This will directly affect the finances of private schools, which may need to adjust their fee structures and operations.
Fuel and Alcohol Duties
From February 2025, alcohol duties will align with the retail price index on non-draught drinks, and there will be a minor 1.7% reduction in duty on draught alcoholic beverages. This change benefits bars and restaurants, potentially reducing their costs related to alcohol Purchases.
Minimum Wage Increase
Starting in April 2025, the minimum wage will rise significantly across different age groups:
● For those aged 21 and over, the minimum wage will increase from £11.44 to £12.21
per hour.
● For 18-20-year-olds, the rate will rise from £8.60 to £10 per hour.
● Apprentices will see an increase from £6.40 to £7.55 per hour.
This means businesses should prepare for higher wage expenses starting in April, especially those in sectors like retail and hospitality that rely on minimum-wage workers.
National Insurance Contributions
Changes to employer National Insurance contributions will take effect on April 6, 2025:
● The employer’s National Insurance contribution rate will rise from 13.8% to 15%.
● The threshold for paying National Insurance will decrease from £9,100 to £5,000.
These changes will increase business operational costs, and employers will need to adjust their payroll systems accordingly.
Employment Allowance Expansion
From April 2025, The Employment Allowance will increase from £5,000 to £10,500, and the £100,000 cap will be removed, making the allowance available to more businesses. This could help offset some of the increased costs from the higher minimum wage and National Insurance contributions.
Capital Gains Tax Adjustments
From April 2025, capital gains tax rates will increase:
● The lower bracket will rise from 10% to 18%.
● The higher bracket will increase from 20% to 24%.
Businesses planning asset sales or disposals in 2025 should consider the potential tax impact and may want to consult a tax professional to optimise their strategies before these changes take effect.
In conclusion, there are plenty of financial dates with key changes to keep in your diary! Have them in mind for January and February, with the most dates in April. At Modina, we’re here to help your business navigate these changes throughout the year. With our passion for assisting businesses with achieving financial success, you will be well on your way to reaching your goals.
Ready to start? Call Modina on 020 7183 8241 and talk to one of our friendly team!