Typically, April brings a wave of updates that small business owners need to keep firmly on their radar and this year is no difference. Whether you’re a sole trader, a director of a limited company, or running a family-owned enterprise, this month’s changes could affect how you operate, report, and plan your finances.
Let’s break it down into bite-sized pieces, so you can stay informed without the jargon overload.
New corporation tax bands take hold
If your business is incorporated, the changes to Corporation Tax, introduced in 2023, are now fully embedded and from April 2025, HMRC will be keeping a closer eye on how companies calculate their liabilities.
- Main rate: Stays at 25% for companies with profits over £250,000.
- Small profits rate: Remains at 19% for those under £50,000.
- Marginal relief: Still applies if your profits fall between the two but expect greater scrutiny (especially for associated companies).
What to do: Review your group structures. If you operate multiple entities, now’s the time to ensure you’re not inadvertently limiting your marginal relief.
Making tax digital for income tax (MTD for ITSA) – It’s happening
Yes, it’s finally here for many more businesses. Here are the important bits:
- All self-employed individuals and landlords earning over £50,000 annually must keep digital records and file quarterly updates using compatible software.
- The familiar yearly tax return? It’s taking a backseat to more regular digital reporting.
What to do: If you’re not already using MTD-friendly software like QuickBooks and Xero, it’s time to switch. And if you’re still battling with spreadsheets, this is your nudge to move on.
National living wage and minimum wage increases
April brings new wage thresholds that will affect payroll for many small businesses:
- National living wage (now for everyone aged 21 and over) is £11.44 per hour
- Other age-specific minimum wages have also risen.
What to do: Review your payroll immediately. These changes are already in effect, and underpaying staff (even accidentally), can trigger hefty penalties.
Business rates reform and relief changes
The 2025 update to business rates includes:
- A revised multiplier to reflect inflation.
- Changes to small business rates relief, with more businesses eligible thanks to updated property thresholds.
- A push for more frequent property revaluations.
What to do: Check your eligibility for relief. You might find your premises now fall below the new thresholds, potentially saving you thousands.
Electric company cars – Tax perks shrinking
Thinking of adding an electric vehicle to your business fleet? It is still a good idea but be aware that the benefit-in-kind (BIK) tax on EVs is rising incrementally.
- From April 2025, BIK on zero-emission vehicles increases to 3% (up from 2%).
What to do: If you’re due to refresh your fleet, it may still be tax-efficient to go electric, but factor in the slight rise in BIK when doing your sums.
Green reporting for larger small businesses
If your small business is creeping towards the 250-employee mark or crosses certain turnover thresholds, you may fall under new environmental reporting rules introduced this year.
These cover areas like:
- Energy consumption
- Carbon emissions
- Sustainable practices
What to do: Start tracking your data now. It’s better to be proactive than reactive when the reporting requirement lands on your desk.
Final thoughts: Don’t let the new rules catch you off guard
Change is never far away in the world of tax and compliance, but with a little preparation, you can ride the April 2025 wave instead of getting caught in the undertow.
If you’re unsure how these changes affect your specific situation, it’s worth having a quick check-in with your accountant (or getting in touch with us if you need one!). It’s far easier to stay compliant than to untangle a tax knot later.
If you have a question or need some help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min
