The VAT registration threshold
From 1 April 2025 the VAT registration threshold remains at £90,000 and the deregistration threshold at £88,000.
Removal of VAT exemption for private school fees
Private school fees for education and vocational training will no longer benefit from VAT exemption and will be subject to VAT at the standard rate (20%). The change will apply to terms beginning on or after 1 January 2025 although certain prepayments made after 29 July 2024 will also be included.
Stamp Duty Land Tax changes
Individuals who purchase additional residential properties, such as second homes or buy-to-let properties, in England and Northern Ireland, generally pay Stamp Duty Land Tax (SDLT) at 3% above the standard SDLT rates. This rate is increased to 5% for transactions with an effective date (usually the date of completion) on or after 31 October 2024.
Similar changes are made for companies and other non-natural persons purchasing residential property in England and Northern Ireland.
In addition, there is also an increase in the single rate of SDLT payable by companies and other non-natural persons when purchasing residential properties worth more than £500,000, from 15% to 17%, from the same date.
Making Tax Digital for Income Tax Self Assessment
The government is committed to delivering Making Tax Digital for Income Tax Self Assessment, which is supposed to start in April 2026. The government will expand the rollout of the programme to those with incomes over £20,000 by the end of this Parliament and will set out the precise timing for this at a future fiscal event.
Other changes
HMRC has announced a variety of compliance initiatives, which include the following:
- investing in additional HMRC compliance staff and debt management staff
- modernising HMRC debt management IT systems
- pre-populating tax returns with Child Benefit data (for the purposes of the High Income Child Benefit Charge)
- increasing the late payment interest rate charged by HMRC on unpaid tax liabilities by 1.5%.