Navigating the 2025 UK Tax Year: What Individuals and Businesses Need to Know
As the 2025/26 tax year gets underway, it’s vital for both individuals and businesses to stay informed on the latest changes in UK tax regulations. At Deciphr, we understand the importance of proactive planning to optimise your tax position and ensure compliance.
Key Updates for the 2025/26 Tax Year
1. Personal Allowance and Income Tax Bands
The personal allowance for the 2025/26 tax year remains frozen at £12,570. Similarly, income tax thresholds have not changed:
- Basic rate: 20% on income up to £50,270
- Higher rate: 40% from £50,271 to £125,140
- Additional rate: 45% on income above £125,140
Frozen thresholds may result in fiscal drag, pushing more taxpayers into higher bands. Reviewing your income strategy is essential.
2. Dividend and Capital Gains Tax Changes
The dividend allowance has been reduced further to £500, meaning more dividends are now taxable. Likewise, the Capital Gains Tax (CGT) annual exemption has dropped to £3,000. If you own shares, rental properties, or other assets, now’s the time to reassess your portfolio and consider tax-efficient disposals.
3. Corporation Tax and Business Planning
Corporation tax remains at:
- 19% for companies with profits under £50,000
- 25% for companies over £250,000
- Marginal relief for companies in between
Planning capital investments and reviewing your company structure could reduce your liabilities. We can help you take advantage of available reliefs.
4. Making Tax Digital (MTD) for Income Tax
MTD for Income Tax Self Assessment (ITSA) will become mandatory from April 2026, but sole traders and landlords earning over £50,000 should begin preparing now. Transitioning to compliant software early can reduce stress and improve accuracy.
How We Can Help
At Deciphr, we offer tailored advice to help you:
- Minimise your personal and corporate tax exposure
- Navigate complex compliance requirements
- Plan for long-term financial success
Whether you’re a sole trader, SME owner, or high-net-worth individual, our expert team is here to guide you through each tax year with clarity and confidence.
Need help with your 2025/26 tax planning? Contact us today.
