Tax E-News – March 2025

Welcome to the March 2025 edition of our Tax E-News. We aim to keep you informed about the latest tax changes and updates affecting businesses and individuals. If you have any questions or need tailored advice, please contact us.

Making Tax Digital for Income Tax

With the Making Tax Digital for Income Tax (MTD for IT) deadline approaching on 6 April 2026, now is the time to check if your business needs to comply.

• If you are a sole trader or operate an unincorporated property business with a qualifying income of £50,000 or more in the 2024/25 tax year, you must comply with MTD for IT.
• HMRC will use 2023/24 tax returns to identify affected taxpayers and will notify them soon.
• MTD for IT requires digital record-keeping and quarterly submissions via HMRC-approved software.

If you receive an HMRC notification or want to prepare in advance, we can help you choose the best software and streamline your accounting processes.

Capital Gains Tax (CGT): Timing of Disposals and Elections

Key CGT changes include:

• Increased main CGT rates from 30 October 2024 (18% and 24% for residential property and other assets).
• Higher Business Asset Disposal Relief (BADR) rates:
  • 10% to 14% from 6 April 2025
  • Further increase to 18% from 6 April 2026

Proper timing of BADR-qualifying disposals can minimise your tax liability. If you’re considering selling assets or shares, speak to us to avoid unexpected CGT costs.

Loan Charge Review – Your Chance to Have a Say

The Loan Charge was introduced to tackle tax avoidance schemes involving disguised remuneration through loans. However, many affected taxpayers have faced significant hardship.

An independent review is now underway, focusing on unresolved tax liabilities. If you were affected and wish to submit evidence, please reach out to us for guidance.

Are You Trading? HMRC’s Digital Platform Reporting Rules

From 2024, platforms like Amazon, eBay, and Etsy must report sellers’ income to HMRC, except for those who:

• Made fewer than 30 sales per year
• Earned less than €2,000 (£1,700) annually

While this does not create new tax obligations, HMRC is now better equipped to detect undeclared online trading income. However, personal sales of unwanted items are generally not taxable.

Key takeaway: If your online sales exceed £1,000 per year, they may be classified as trading income, requiring declaration on a Self Assessment tax return.

Annual Tax on Enveloped Dwellings (ATED) – Key Deadlines

ATED applies to companies and non-natural persons owning UK residential property valued over £500,000.

• Returns for 1 April 2025 – 31 March 2026 are due between 1 April – 30 April 2025.
• Reliefs exist for properties let on a commercial basis with no owner or connected party occupation.
• HMRC is issuing One-to-Many letters to companies that declared no profits between 2017 – 2020 but did not submit ATED returns. Affected businesses must respond within 40 days to avoid penalties.

Ensure compliance and claim available reliefs by consulting with us.

Advisory Fuel Rates for Company Cars – March 2025 Update

HMRC has updated Advisory Fuel Rates (AFR) from 1 March 2025 for company car mileage reimbursements.

Key points:

• Hybrid cars: Use petrol or diesel rates.
• Fully electric vehicles: 7p per mile.
• Employee-owned cars: Tax-free reimbursement remains 45p per mile (first 10,000 miles), then 25p per mile.
• VAT recovery: Employers can reclaim 20/120 of the fuel element as input VAT, provided they have a valid VAT invoice.

Engine Size	Petrol	Diesel	LPG
1400cc or less	12p (12p)		11p (11p)
1600cc or less		12p (11p)
1401cc to 2000cc	15p (14p)		13p (13p)
1601 to 2000cc		13p (13p)
Over 2000cc	23p (23p)	17p (17p)	21p (21p)

For a full breakdown of mileage rates, or if you need guidance on company car expenses, reach out to us.

Get in Touch

Tax regulations are constantly evolving, and planning ahead can help you reduce liabilities and stay compliant. If you need further information or assistance, contact us today!

DIARY OF MAIN TAX EVENTS

MARCH / APRIL 2025

Date	What’s Due
1 March	Corporation Tax for year to 30/05/2024, unless quarterly instalments apply.
19 March	PAYE & NIC deductions, and CIS return and tax, for month to 05/03/2025 (due 22/03 if you pay electronically).
26 March	Spring Forecast: the Chancellor of the Exchequer, Rachel Reeves, will present her Spring forecast.
1 April	Corporation Tax for year to 30/06/2024, unless quarterly instalments apply.
5 April	End of the 2024/25 tax year – many tax planning actions need to have been taken by this date.
6 April	Start of the 2025/26 tax year.
19 April	PAYE & NIC deductions, and CIS return and tax, for month to 05/04/2025 (due 22/04 if you pay electronically).
30 April	Annual Tax on Enveloped Dwellings (ATED) returns and payment for the chargeable period starting on 1 April 2025.