The start of a new year often brings updates to tax regulations, and 2025 is no different. These changes can significantly affect businesses across the UK, impacting everything from cash flow to compliance. Understanding how new tax rules apply to your business is crucial for planning and staying ahead.

Here’s a look at some of the key tax updates for 2025 and their potential impact on businesses.

  1. Changes to Corporation Tax

Corporation tax rates have remained a significant focus for businesses. In 2025, businesses with profits exceeding £250,000 will continue to face the higher 25% main rate, while those with profits under £50,000 benefit from the 19% small profits rate. However, if your business falls between these thresholds, marginal relief applies. Reviewing your profit projections and planning for tax liabilities is essential to avoid surprises.

  1. VAT Updates

Businesses registered for VAT should be aware of potential threshold changes or updates to Making Tax Digital (MTD) requirements. In 2025, HMRC is expected to tighten compliance rules, making it essential for businesses to ensure their VAT records are accurate and digitally stored. Non-compliance with MTD can result in penalties, so investing in robust accounting software is wise.

  1. Employment Taxes and National Insurance

Employment-related tax changes, including adjustments to National Insurance rates or thresholds, can affect your payroll. Employers should review their payroll systems to accommodate these changes and ensure compliance. Additionally, if you provide employee benefits, such as company cars or private healthcare, ensure you account for these accurately in your P11D forms.

  1. Capital Allowances

The Annual Investment Allowance (AIA), which lets businesses deduct the full value of qualifying plant and machinery, remains a critical tool for reducing tax liabilities. Ensure you’re aware of any changes to limits or qualifying criteria to maximise your claims.

  1. Sustainability Incentives

The government continues to promote environmentally sustainable practices through tax incentives. These may include enhanced capital allowances for green investments or tax relief for energy-efficient equipment. Businesses adopting sustainable strategies can benefit financially while reducing their environmental footprint.

Be Prepared for 2025

Navigating new tax rules can be complex, but staying informed will help your business adapt and thrive. Consult a chartered accountant to understand how these changes impact your specific circumstances and ensure your business remains compliant. Proactive planning is the key to minimising risks and maximising opportunities in 2025.

Our accountants in Basildon will be able to help with any of these new rules. Contact us today to see how we can help you!