While the Spring Budget 2025 did not introduce major changes, we wanted to share some key highlights that may be of interest. Below are some of the main updates:
Key Updates:
National Insurance Cuts: Employee NICs reduced from 10% to 8%, and self-employed NICs cut from 9% to 6% (from April 6, 2024).
Personal Tax Changes: Introduction of a new UK ISA with an extra £5,000 allowance for UK-focused investments, in addition to the existing £20,000 limit.
Pensions: Lifetime Allowance (LTA) abolished, and the annual pension contribution limit increased to £60,000.
Capital Gains Tax: The higher rate on residential property disposals lowered from 28% to 24%.
Child Benefit Changes: The High Income Child Benefit Charge threshold raised to £60,000, tapering up to £80,000.
Cash ISA Review: The government is contemplating reducing the annual cash ISA allowance from £20,000 to £4,000 in the future. This potential reform aims to encourage investment in equities to stimulate economic growth.
What Remains Unchanged from April 2024:
Income Tax Thresholds: No changes to personal allowance or income tax bands.
Dividend Allowance & CGT Exemption: The reduced dividend allowance (£500) and capital gains tax exemption (£3,000) remain unchanged.
Corporation Tax: Maintains the current main rate of 25%.
Inheritance Tax (IHT): No adjustments to thresholds or rates.
