Preparing for the 2025 Tax Year

Deadline for online submission of Self Assessment tax returns for the 2023/24 tax year and payment of any tax owed.

Need to complete a Self Assessment? Check out our Limited Company Accountancy Services.

End of the grace period for online filing of Self Assessment tax returns and payment. Interest on overdue tax begins accruing from February 1, 2025.

End of the 2024/25 tax year. Ensure all tax-efficient investments and allowances are utilised by this date.

Start of the 2025/26 tax year. New tax codes and allowances come into effect.

Due date for the second payment on account for the 2024/25 tax year.

Deadline to register for Self Assessment for the 2024/25 tax year if you’re newly self-employed or have a new income source.

Deadline for submitting paper Self Assessment tax returns for the 2024/25 tax year.

Deadline for online Self Assessment tax returns for the 2024/25 tax year if you want HMRC to collect tax owed through your PAYE tax code (for debts less than £3,000).

The 2024 Autumn Budget introduced several measures affecting contractors:

From April 2025, employer NICs will increase by 1.2%, raising the rate from 13.8% to 15%. This change impacts umbrella companies and agencies employing contractors.

Effective April 1, 2025, the National Living Wage will rise to £12.21 per hour. Contractors should ensure their rates comply with the new minimum standards.

The budget proposes shifting Pay As You Earn (PAYE) responsibilities from umbrella companies to recruitment agencies. This change aims to enhance compliance and protect workers’ rights.

The Employment Allowance will increase from £5,000 to £10,500, providing relief to small employers by reducing their NICs liability. This change may benefit contractors operating through limited companies with employees.

• Review Contracts: Assess how the increase in employer NICs may affect your take-home pay, especially if engaged through an umbrella company or agency.
• Update Payroll Systems: Ensure compliance with the new National Living Wage and adjust payroll processes accordingly.
• Stay Informed on Regulatory Changes: Monitor developments regarding the shift in PAYE responsibilities to understand how it may impact your engagements.
• Utilise Employment Allowance: If operating through a limited company with employees, plan to take advantage of the increased Employment Allowance to reduce NICs liability.

Staying informed about these key dates and legislative changes is crucial for effective financial planning and compliance in the 2025 tax year.

If you’d like to talk to us about any of the information in this article, our team are on hand to help. You can call us on 01625 546 610, email us at customer.services@umbrella.co.uk or use the live chat function on our website.