The new tax and financial year always sees a plethora of previously announced tax changes take effect; 6 April 2025 (the 2025/26 tax year) and the start of the new Financial Year 2025 on 1 April 2025 are no different. Tax thresholds also remain frozen again. The key changes to be aware of are set out below. Employer National Insurance Contributions (NICs)   After the National Minimum Wage increased from 1 April, from 6 April 2025, the rate of Employer National Insurance Contributions (NICs) increased from 13.8 percent to 15 percent and the 0 percent Employer NICs threshold reduced from £9,100 to £5,000, although the Employer NICs employment allowance increased from £5,000 to £10,500. These changes take affect after the National Insurance Contributions (Secondary Class 1 Contributions) Bill 2024-25 finally received Royal Assent last week after amendments proposed by the House of Lord were rejected by the House of Commons.  Furnished holiday lets  From 1 April 2025 for corporation tax and 6 April 2025 for income tax, the furnished holiday lets (FHL) regime has been abolished and former FHL properties now form part of the taxpayer’s UK or overseas property business and are therefore subject to the same rules as other let property businesses. If a property was a FHL this previously had beneficial implications for its tax treatment.  Non-domiciled regime abolished  From 6 April 2025, the rules for the taxation of non-UK domiciled individuals, and specifically the remittance basis (RB) for foreign income/gains, came to an end and are replaced by a tax residence based system.   The new regime provides 100 percent relief on foreign income/gains for new arrivals to the UK in their first four years of UK tax residence provided the individual was not resident in any of the 10 prior consecutive years. A new Temporary Repatriation Facility is also available for individuals who previously claimed the RB.  The domicile-based system of IHT has been replaced with a new residence-based system for long-term residents owning non-UK property not previously within the scope of UK IHT.  Capital gains tax (CGT)  As a result of the increased rates of CGT from 30 October 2024, Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) both increased from 10 percent to 14 percent from 6 April 2025 and both will further increase to 18 percent from 6 April 2026.   The lifetime limit (LL) for BADR remains at £1 million. In contrast, the LL for IR reduced from £10 million to £1 million for all qualifying disposals made on or after 30 October 2024.  Double cab pick ups  From 1 April 2025 for corporation tax and 6 April 2025 for income tax and NICs purposes, HMRC treats most double cab pick-ups (DCPUs) as cars, and not vans, for direct tax purposes. Previously HMRC treated a DCPU with a payload of one tonne or more as a van for the purposes of benefit-in-kind calculations, capital allowances, and certain deductions from business profits. From April 2025, a vehicle is only treated as a van if the construction of the vehicle at the time it was made means that it is primarily suited for the conveyance of goods.  Stamp Duty Land Tax  From 1 April 2025, the Stamp Duty Land Tax threshold for residential land and property reduced from £250,000 to £125,000. The threshold for first-time buyers fell from £425,000 to £300,000 and the maximum value of property to benefit from the first-time buyer threshold reduced from £625,000 to £500,000.  Increased interest rate for late payment and increased late payment penalties  As announced at last Autumn’s Budget, from 6 April 2025 the rate of interest HMRC applies to late payments of most taxes and duties increased from 7 percent to 8.5 percent. This is following the introduction of regulations which make amendments to various pieces of legislation to apply the Bank of England (BoE) official rate of interest plus 4 percent going forward, rather than the BoE official rate plus 2.5 percent. Late payment penalties have also increased as announced in the Spring Statement.  Miscellaneous  Electric, zero and low emission cars, vans and motorcycles are now subject to the vehicle tax rates that were introduced on 1 April 2025. This change applies to both new and existing vehicles. The amount due depends on the type of vehicle and when it was registered. The most expensive electric vehicles (EV) costing over £40,000 will be charged £600 per year from the second year, including the £410 expensive car supplement. Non-EV road tax rates generally increased in line with inflation.  Company car tax is also higher in 2025/26. Rates on EVs are 3 percent, gradually rising 1 percent per year to 9 percent by 2030.  Air passenger duty (APD) rates have also increased with domestic flights subject to £8 for a one-way flight for the reduced rate, up to £16 for the standard rate. The APD rates for larger private jets with over 19 seats increases by an additional 50 percent.    

The Local Property Tax Bill 2025 includes amendments to other tax legislation including an update to the definition of associated entities in the outbound payments defensive measures legislation.   The amendment to section 817U TCA 1997 updates the definition of associated entities to capture entities that are associated with the same individual or connected individuals, and to ensure the legislation operates as intended. The amendment is being included in the Local Property Tax Bill 2025 and not Finance Bill 2025 as it needs to be approved as soon as possible to fully complete a tax related milestone in Ireland’s National Recovery and Resilience Plan ahead of expected funding drawdowns from the EU Recovery and Resilience Facility this year.

It’s now less than a year to the first tranche of mandation of MTD for income tax for unincorporated sole trade businesses and landlords with turnover exceeding £50,000. The Institute is inviting those members affected by this change to take a short five question survey which we are using as a temperature check to assess readiness and further discuss the challenges this presents with HMRC. The survey will remain open for the next two weeks and will take less than 5 minutes to complete. A more detailed survey on MTD will be launched before the summer. Take the survey now.  The Northern Ireland Tax Committee met recently with HMRC’s MTD Programme Director who also was in attendance at the February 2025 Practice News webinar. HMRC gave an update on the current status of the MTD project whilst also reflecting on its challenges. HMRC’s ambitions for the next phase of testing in 2025/26 were also discussed. HMRC has recently been writing to agents who are likely to have clients in the first phase of mandation; this is now being followed by letters to taxpayers.   HMRC is also keen to hear about the plans of our member firms to get ready for this major change and specifically why firms are not planning to take part in testing in 2025/26. In particular HMRC would welcome views on what challenges/blockers are getting in the way of participation. Email tax@charteredacocuntants.ie to share your views.  Despite our reservations about MTD, the Institute will continue to work with HMRC on MTD readiness and is developing a cross-department MTD strategy to assist members in their preparations. We will also continue to represent members views as we approach April 2026.  HMRC has also published new guidance for agents about client authorisations and signing clients up for making tax digital for income tax. The step by step guides for agents and individuals and guidance for sole traders and landlords have also been updated. These publications are available as follows:  Add your client authorisations for Making Tax Digital for Income Tax, Sign up your client for Making Tax Digital for Income Tax, Making Tax Digital for Income Tax as an agent: step by step, Making Tax Digital for Income Tax for individuals: step by step, and Sign up for Making Tax Digital for Income Tax. From 7 April 2025 until next April, HMRC will also be contacting users who have signed up to participate in the MTD trial about how the testing of the service is progressing.   

The Government has agreed a further six-month extension of the 9 percent VAT rate currently applied to gas and electricity. The rate was due to revert to 13.5 percent from 1 May 2025 but will now apply until 31 October 2025. The Department of Finance has confirmed that the decision on any further extensions will be considered as part of the normal budget process. Commenting on this, Minister for Finance, Paschal Donohoe said: "The Programme for Government acknowledges the increased energy cost pressures on households and businesses, and this extension of the reduced 9% rate is in line with the commitments made in our Programme to mitigate these pressures in whatever way we can. In addition, I am conscious of the fact that energy prices are beginning to increase again and believe in this context that it is appropriate to extend the existing support."

In this week’s miscellaneous updates, a range of new tax inquiries have been opened by various Government Committees and the Government has also launched a call for evidence in respect of the independent loan charge review being spearheaded by Ray McCann. The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected.   New tax inquiries  A range of new tax inquiries have been opened as follows:  https://committees.parliament.uk/work/9035/spring-statement-2025/, and https://committees.parliament.uk/work/9050/collecting-the-right-tax-from-wealthy-individuals/. The new House of Lords Northern Ireland Scrutiny Committee which replaced the previous Windsor Framework Sub-Committee has reopened the inquiry into Strengthening Northern Ireland’s Voice in the context of the Windsor Framework.  Loan Charge Review Call for Evidence  In January, the Government commissioned a new independent review of the loan charge spearheaded by Ray McCann. Linked to this, a new Call for Evidence has now been opened which is intended to gather information as part of this and which runs to 12 noon on 30 May 2025.  Respondents are asked to consider as many as possible of the questions asked and provide their responses. Where possible, responses should be made using the form in the Call for Evidence. The provision of copies of supporting documentary or other evidence, for example promoter marketing material is encouraged and will be considered by the review.  

US President Donald Trump last week announced 20 percent tariffs on all imports from the EU stating the imposition of the ‘reciprocal’ tariffs was required to address tariff and non-tariff barriers imposed by US trading partners. The Institute’s Director of Members and Advocacy, Cróna Clohisey has called the move a “regressive step” and is urging the Irish Government to work with the EU Commission to engage with the US administration in constructive dialogue. The Taoiseach, Micheál Martin released a statement noting his deep regret at the decision to impose 20 percent tariffs on imports from across the EU saying that Ireland would consider with EU partners on how best to proceed. The Taoiseach commented that the Irish economy is resilient, and that it is starting from a strong position. He is confident that we will weather the ensuing upheaval to global trade. The President of the European Commission, Ursula von der Leyen also released a statement noting the deeply regrettable choice which will massively impact the global economy. In setting out the many ways the tariffs will negatively impact citizens, she expressed a sincere openness to negotiating with the US.

Revenue is engaging with VAT registered businesses as it transitions taxpayers from the VAT Fixed Direct Debit (FDD) Scheme to a Variable Direct Debit (VDD) facility, in line with standard industry practice. As a consequence, annual VAT filers on FDD will be required to file returns on a bi-monthly basis. The FDD scheme for VAT will be removed on a phased basis from mid-2025 following the introduction of a VDD facility and as taxpayers roll off their annual VAT filing period.  Revenue is writing to VAT registered businesses currently availing of the FDD scheme advising them of its cessation. In addition, a copy of this letter will be sent to the linked Agents’ ROS Inboxes by tomorrow, Tuesday 8 April. It is important to note that taxpayers and their agents do not need to take any immediate action for now and they should continue with their monthly FDD payments. Revenue will contact taxpayers again as they approach their annual filing period end, outlining the specific actions required to transition to VDD.  

As previously advised the Institute will be responding to the following consultations and wants to hear your views: Electronic invoicing: promoting e-invoicing across UK businesses and the public sector and Reforms to Inheritance Tax agricultural property relief and business property relief: application in relation to trusts. This week is your last opportunity to email tax@charteredaccountants.ie and share your views on the inheritance tax consultation.  April 2026 changes to Inheritance Tax (IHT) reliefs - agricultural property relief (APR) and business property relief (BPR)  As many readers will be aware, at Autumn Budget 2024 the Government announced controversial reforms to two key IHT reliefs, APR and BPR, which will commence from April 2026.   In particular:  a new £1 million allowance will apply to the combined value of property that qualifies for 100 percent BPR or APR or both - after the £1 million allowance has been exhausted, relief will apply at a lower rate of 50 percent to the combined value of qualifying agricultural and business property, and the rate of BPR will be reduced from 100 percent to 50 percent in all circumstances for shares admitted to trading on a recognised stock exchange which are not ‘listed’ HMRC has launched a limited technical consultation on this issue. Note that this is not seeking views on the overall policy change but is only examining aspects of the application of the £1 million allowance for property settled into trust qualifying for 100 percent APR or BPR. As this is a technical consultation, it is running for a shorter period of time to Wednesday 23 April 2025.  The Institute is aware of the damaging impact that these reforms will have on businesses and farms in Northern Ireland and in November 2024 flagged these concerns to the Government. We would encourage members to take the opportunity to respond to this limited technical consultation and express their wider views on this damaging policy change. You can respond by using the online form or by email to aprbpr.consult@hmrc.gov.uk.  The Institute again encourages you to share your views on these policy changes as we will again be writing to the Government to highlight the particular damage these changes will cause in Northern Ireland. Please email tax@charteredaccountants.ie by Friday 11 April 2025 with your views.  Electronic invoicing  The purpose of this consultation is to gather views on standardising electronic invoicing (e-invoicing) and how to increase adoption of e-invoicing across UK businesses and the public sector. The consultation explores how different e-invoicing approaches may align with businesses and aims to support the development of a UK approach. The consultation will run to 7 May 2025. Please share your views with us by Friday 18 April 2025.  Should you wish to respond individually, responses are being accepted by submitting a form or by email to einvoicingconsultation@hmrc.gov.uk.   

The Department of Finance has issued a paper Green Budgeting in Ireland from a Tax Perspective-update to the Methodology which outlines a methodology update to the Government’s green budgeting analysis from a tax perspective. According to this paper, the analysis undertaken shows that the tax system in Ireland as a whole can be seen as climate positive in monetary terms and that recent budgetary changes have improved the climate positive contribution of the tax system. Green budgeting is the process of documenting the impact of budgetary measures and wider fiscal policy on the transition to an environmentally sustainable and climate friendly economy. Green budgeting provides a policy framework which has the potential to induce policy changes that will result in improved environmental outcomes. The paper outlines that one of the key reasons for undertaking green budgeting in the Department of Finance is to raise awareness and understanding of how taxation is linked to climate and environmental objectives and policies.

Revenue has published its Protected Disclosures Annual Report for 2024 which provides information on both internal and external protected disclosures received in 2024. The report notes a significant increase in the number of disclosures, regarding potential tax or duty non-compliance, received by Revenue through its external reporting channels. Revenue has internal reporting channels and procedures in place for both current and former staff who wish to make a protected disclosure. In 2024, five reports were considered under Revenue’s policy on protected disclosure reporting. One report was closed following a comprehensive assessment by the Protected Disclosures Group which determined that there was no evidence of a relevant wrongdoing. Assessments of the other four reports, all received in Q4, were on-going on 31 December 2024. External protected disclosures are reports made by workers who are employed by a business, individual or organisation, other than Revenue, that contain information about potential wrongdoing related to tax, duty or customs controls. In 2024, a total of 930 reports were received through Revenue’s external protected disclosures channels with 171 reports assessed as meeting the criteria to be considered as a protected disclosure. The majority of the remainder of the reports related to reports of tax evasion not encountered in a work-related setting and this information was referred to the relevant Revenue Division for appropriate action. Compliance interventions opened on foot of the receipt of information in a protected disclosure report yielded over €1.2 million in additional taxes and/or duties for the Exchequer in 2024. Commenting on today’s publication, Revenue’s Director of Internal Audit, Leeann Kennedy said: “Revenue welcomes all reports of information regarding suspected tax non-compliance or tax evasion. Workers who provide information to Revenue under the framework of the Protected Disclosures Act are afforded a range of important legal protections. Revenue will always safeguard the worker’s identity”.

Revenue has updated the its guidance on the provision of staff awards to include a new table which summarises the tax treatment of certain staff awards. The summary table outlines the circumstances when certain award types are non-taxable. The award types listed in the summary table include staff suggestion schemes, long service, special increments and exceptional performance awards. Examination and course related awards are also mentioned.

Revenue has recently updated three other Tax and Duty Manuals. The updated manuals relate to remote working, expenditure on approved buildings and gardens and local property tax direct debits. Details are set out below. The guidance on Expenditure on Approved Buildings and Gardens has been updated to outline the process for applying via myEnquiries for a determination by Revenue allowing reasonable public access to the building or garden. The Tax and Duty manual Remote Working Relief has been updated to remove reference to  2020 as this year of assessment is now outside the timeframe for making a claim. The updated Tax and Duty manual Local Property Tax Direct Debit Guidelines provides further clarity in the overview section on valuation dates and the reference to cheque as a payment option has been removed.