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Spring 2025 

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These are the main tax changes that take effect from April 2025 or later:

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The rate of Employers National Insurance contributions will increase to 15% of the salary of any staff earning over £5,000. To protect small businesses the 'Employment Allowance' has been increased to £10,500 which can be claimed by any employer against their Employers NI bill. This is not available companies where the sole director is the sole employee. 

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Employees will pay National Insurance at 8% on earnings over £12,570.  Employees earning between £6,500 and £12,570 will have NI contributions credited free.  Employees earning less than £6,500 will not have NI contributions credited to them, but those in receipt of Universal Credit will have NI contributions credited.  Anyone else can pay voluntary contributions of  £17.75 per week in order to maintain access to future state pension and other benefits.

 

Self employed people must pay Class 4 NI contributions  at 6% of earnings over £12,570.  From April 1st the National Living Wage for people over 21 is increased to £12.21.  Income tax rates and thresholds remain unchanged. The personal allowance is £12,570 and the basic rate of income tax is 20%.

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Capital Gains Tax on the sale of business assets (BADR) rises on 1st April 2025 to 14% and will rise to 18% in 2026.

Retail, Hospitality and Leisure businesses will continue to be entitled to Business Rate Relief of 40%.  The lower tax treatment of furnished holiday lettings has been abolished from 6th April 2025.

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The requirement for sole traders and landlords to use digital accounting software from 2026 was confirmed for businesses with a turnover of over £50,000, and it was announced that this will be extended in 2027 to those with turnover of over £20,000. 

 

Spring is also when economic forecasts are made. Current growth forecasts are generally low,  and the independent UK Office for Budget Responsibility expects output (GDP) to grow 1% in 2025, by 1.9% next year, 1.8% in 2027, 1.7% in 2028 and by 1.8% in 2029.  Real household disposable income per person is expected to grow by an average of around 0.5 percentage points a year from 2025-26 to 2029-30, as a result of stronger wage growth and inflation starting to fall later in the forecast period.

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​International Business Film 2025

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Each year Enterprise Links considers films for recognition as 'best business film'.  Since 1992, the founding year of Enterprise LInks, only seven films have been recognised as Classic Business Films (see below).  The criteria requires a film to have received wide critical acclaim and in content feature business, enterprise or business people. To be considered a Business FIlm Classic the motion picture must be regarded as likely to stand the test of time. 

 

In February a list of films released in the last 12 months that have been critically acclaimed was published and opinion from the 'Enterprise Links' businesss community is sought on their eligibility as a significant film about business activity.  Whether a film is a business film is a highly contentious matter, so feel free to disagree. Here is the list for consideration by Enterprise Link business associates:

 

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The Brutalist

An international co-production between the United States, UK, and Hungary, staring Adrien Brody as a Hungarian-born Jewish Holocaust survivor who immigrates to the United States, where he struggles to achieve the American Dream until a wealthy client changes his life. 

 

Emilia Perez

A genre defying French musical crime comedy film which follows a Mexican cartel leader (Karla Sofía Gascón) who enlists a lawyer (Zoe Saldaña) to help them disappear so that they may transition into a woman.  

 

Nickel Boys

An American historical drama follows two African-American boys, Elwood and Turner, sent to an abusive reform school in 1960s Florida. One goes on to run his own business. The film is inspired by the now closed notorious Dozier School for Boys.

 

The Substance

A body horror film follows a fading celebrity, Elisabeth Sparkle (Demi Moore) who, after being fired by her producer (Dennis Quaid) due to her age, uses a black market drug that creates a much younger version of herself  with unexpected side effects.

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The definition of a 'film about business or enterprise' is broad and subjective.  In the final analysis to receive the accolade classic a film should have a meaningful message about business people or business activity. Critical acclaim has been demonstrated by all four, but to join the 'classic' list the requirements are very high. The passage of time can increase or diminish the rating of a film.  For this reason is is possible that a film can be added to or deleted from the list of previous years award winners. Remarkably, there has been no addition since 2013. A reminder, these are the seven classic films about business that Enterprise Links considers have stood the test of time:

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Glengarry Glen Ross 1992

Jerry Maguire 1996

The Devil Wears Prada 2006

The Social Network 2010 

Margin Call 2011

Dallas Buyers Club 2013

The Wolf of Wall Street 2013

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Please feel welcome to participate in the consideration by using our contact details.  An update will be published in July 2025.

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Budget November 2024 

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On 30th October 2024 Chancellor Rachel Reeves announced the first Labour Budget for 14 years.  In a surprise move, most of the specific tax rises predicted beforehand did not materialise.  £40billion pounds was raised by changing fiscal rules and raising employers national insurance.  It was welcomed by the International Monetary Fund as responsible, but condemned in most newspapers and big business for the tax rises. It was a much bolder budget that expected that has provided funds for the NHS and Schools, but economic growth is predicted to be low which suggests that further measures will be needed to raise living standards in the next four years.  

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Here are some (of the many) changes announced:

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Business Taxes

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• Companies to pay NI at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, raising an additional £25bn a year

• Employment allowance  (which allows smaller companies to reduce their NI liability) to increase from £5,000 to £10,500

• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April

• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election

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Personal Taxes 

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• Rates of Income Tax and National Insurance (NI) paid by employees, and of VAT, to remain unchanged

• Income tax band thresholds to rise in line with inflation after 2028, preventing more people being dragged into higher bands as wages rise

• Basic rate capital gains tax on profits from selling shares to increase from from 10% to 18%, with the higher rate rising from 20% to 24%

• Rates on profits from selling additional property unchanged

• Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027

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Wages and Benefits 

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• Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April 25

• Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a "single adult rate"

• Basic and new state pension payments to go up by 4.1% next year due to the "triple lock", more than working age benefits

• Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week

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Government Spending 

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• Day-to-day spending on NHS and education in England to rise by 4.7% in real terms this year, before smaller rises next year

• Defence spending to rise by £2.9bn next year

• Home Office budget to shrink by 3.1% this year and 3.3% next year in real terms, due to assumed savings from asylum system

• £1.3bn extra funding next year for local councils, which will also keep all cash from Right to Buy sales from next month

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SUMMARY 

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The Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026. It also predicts  inflation to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026.  £11.8bn was allocated to compensate victims of the infected blood scandal, with £1.8bn set aside for wrongly prosecuted Post Office sub-postmasters.  Small businesses and the lower paid were protected to a degree from the tax rises.   This budget was a welcome change from recent years with a sense of purpose. It will be seen as a successful start  if people see improvements in public services and public and private investment delivers economic growth within 3 to 5 years. 

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International Business Film Classic 2024

 

Since 1992 Enterprise Links has issued International Business Film Classic Awards.  These are critically acclaimed feature films (Oscar, Bafta or Golden Globe nominated) of international appeal andl long last ig merit and commercial success that concern or reflect on business issues, business activity or running a business.  They can be drama, comedy or documentary films.  

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In 2024 Enterprise Links considered films  worthy of the accolade.  In March five films were listed.  This was reduced to two after further consideration.  

 

Air 

Biographical sports drama film directed by Ben Affleck and written by Alex Convery. The film is based on true events about the origin of Air Jordan, a basketball shoeline, of which a Nike employee seeks to strike a business deal with rookie player Michael Jordan. It stars Matt Damon, Ben Affleck, Jason Bateman, Marlon Wayans, Chris Messina, Chris Tucker, and Viola Davis.  Nominated for 2 Golden  Globes.

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American Fiction  

Comedy-drama film written and directed by Cord Jefferson in his feature directorial debut. Based on the 2001 novel Erasure by Percival Everett, it follows a frustrated novelist-professor who writes an outlandish satire of stereotypical "Black" books, only for it to be mistaken for serious literature and published to high sales and critical praise. The film stars Jeffrey Wright, Tracee Ellis Ross, Issa Rae, Sterling K. Brown, John Ortiz, Erika Alexander, Leslie Uggams, Adam Brody and Keith David. Nominated for 5 Oscars, 2 Golden Globes and 1 BAFTA.

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However, Enterprise  Links did NOT add to the seven films that are judged to be International Business Films Classics since 1992 

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Glengarry Glen Ross 1992

Jerry Maguire 1996

The Devil Wears Prada 2006

The Social Network 2010 

Margin Call 2011

Dallas Buyers Club 2013

The Wolf of Wall Street 2013

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The reason in both the case of Air and American Fiction was that they have not passed the test of time that reflects long lasting merit.

Any film can be reconsidered and previous citations can be withdrawn.  American Fiction was commended as Best of 2024 as comedy is the most challenging genre in which to comment on enterprising behaviour and business practice.

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Tax Information 

 

​The HMRC Making Tax Digital project will mean that from April 2026 all business owners with sales turnover in excess of £50,000 a year will have to keep their records in a digital format (accounting software or a spreadsheet that has a digital link to HMRC).  from April 2027 the Turnover threshold will be reduced to £20,000

 

From 2024-25 HMRC changed the basis period for income taxation to the year of !st April to 31st March. This affected sole traders and unicorporated businesses with a year end other than 31st March or 5th April.  Companies are not affected. ​​

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All VAT registered businesses are required to keep digital records and submit a VAT return through MTD-compliant software or buy bridging software to continue to use spreadsheets. 

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The best thing that anyone can do to prepare for MTD ITSA is to start keeping digital records now if they don’t already use accounting software.  It may mean a change at first, but in the longer run could make keeping accounts easier and up to date. 

 

If it’s not possible for a person to use computers or the internet, as a result of age, disability, religion, or location, they can apply for an exemption from MTD.

 

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Important Dates

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The significant dates to remember are the dates that tax returns should be submitted and tax paid to HMRC

 

Sole traders must complete a tax return and pay the tax due on business profits for the previous Tax Year by the following 31st January.  For example, the tax year 2025-26 runs from 6.4.2025 to 5.4.2026, and any income tax not deducted at source (Pay as you Earn) must be paid by 31.1.2027.

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Directors of limited companies must make a personal tax return of any income they receive from their company . 

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Directors of limited companies are also responsible for the submission of a Corporation Tax return by 12 months after the end of the company's accounting year. Corporation Tax must be paid within 9 months of the end of the accounting  year (when the accounts end).  They must also submit accounts and a confirmation statement to Companies House each year. 

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VAT must be paid and a VAT return made to HMRC by the 7th day following the end of the month after the VAT quarter.  

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Enterprise Links Ltd can be engaged  to do all of the above on your behalf.  Although personal tax returns can still be made on paper,  97% of them are now made electronically. 

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Tax Allowances and Rates 2025

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The personal allowance, which is the amount any man woman or child domiciled in the UK is allowed to earn tax free,  is £12,570 and the income tax basic rate of 20% applies to income from £12,570 to £50,270.  40% applies to income from £50,271 to £125,140. Any income above £125,140 is Taxed at 45%.

 

The transferable tax allowance for married and civil partners (aka the marriage allowance) is £1,257  The capital gains tax annual exempt amount is £3,000.  

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For businesses the annual captial investment allowance has been temporarily increased to £1 million.  The tax free Individual Savings Account annual subscription limit  is £20,000.  Trading allowance is £1,000 and Savings allowance in £1,000.  Dividend allowance is £500.

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Self Assessment - a guide

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Self assessment is the system under which taxpayers are required to account for tax that has not been deducted at source.  You will need to submit a tax return to HMRC if you are:

• working for yourself and your income from self-employment was more than £1,000 - anything under this amount falls within the  ‘trading allowance’.

• renting out a property and your rental income is more than £2,500 - you will need to phone HMRC to give them the figures if you receive between £1,000 and £2,500.

• a company director (except for directors of a not-for-profit organisation and you did not receive any pay or benefits, like a company car or medical insurance).

• a trustee of a trust or registered pension scheme or the executor of an estate.

• living abroad and have a UK income - this includes non-UK resident landlords.

 

or if you receive:

• income from savings and investments of more than £10,000.

• dividend income of more than £10,000.

• other ‘untaxed income’ of more than £2,500. This could be tips or commission. If the income is less than £2,500 a year you might not have to complete a tax return but it is still your responsibility to report such income. 

• taxable foreign income, even if tax was paid in the country of origin, whether or not you are resident in the UK.

• a taxable annual income of more than £100,000.

• A P800 form from HMRC showing tax due at the end of the year that cannot be collected via your PAYE income and you did not make a voluntary payment.

• regular annual income from a trust or settlement, or income from the estate of a deceased person and further tax is due.

• state pension which is more than your personal allowance and is your only source of income, except in cases where your pension commenced on or after 6th April 2016.

• income over £70,000 (or your partner’s income was over this amount) and one of you claimed child benefit.

• or have a capital loss but your gains net of any losses are more than the annual exemption 

• or have no losses to claim but your gains are more than the annual exemption

and you may also want to complete a tax return if you:

• want to claim for expenses of employment  which total £2,500 or more.

• want to claim tax relief for donations made to charity or private pension contributions.

• want to prove you are self-employed, for example to claim tax free childcare.

• want to make voluntary national insurance payments to qualify for benefits.

 

If HMRC have sent you a tax return, or a notice to complete one, the return must be completed and submitted by the following 31st January. 

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National Insurance and the State Pension

 

There are complex rules regarding state pension entitlement as a result of national insurance contributions. Basically the present rules are that you need 10 years NI contributions to get a state pension at all, and 35 years for a full state pension. People retiring could have their state pension provided under three state pension systems: the basic state pension, State Earnings Related Pension (Serps), and State Second Pension. Only the basic state pension is available now. 

 

In April 2016, a calculation was done to work out what pension you have earned under the old rules and the new rules. Pensioners will get the higher of the two, less any deductions from "contacting out". If you have opted out of either Serps or the State Second Pension, or both, your state pension will be reduced.

 

If this "foundation" pension is less than the maximum state pension then further NI contributions will increase it, at the rate of 1/35 of the maximum state pension, for each further year until you reach the maximum or state pension age.

 

If you had a private pension that replaced part of your state pension, then by paying more NI in future you could gain a higher state pension than you would have achieved under the old state pension system while keeping the private pension.

 

Digital Accounting

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HMRC already uses third-party data from banks, building societies, pension providers and employers. In time those sources could include income from property, peer-to-peer lending, and dividends and shares. These sources, they argue, are necessary in today’s economy where “taxpayers hold more than one job and may have fluctuating and unpredictable incomes. HMRC is keen to stress that new third-party information will be sourced openly and transparently, and that all legal requirements, including privacy impact assessments, will be met. Taxpayers will be able to see all the third-party data sources linked to their records at any time through their digital personal tax accounts.  But many will need help to understand or comply, and will have doubts over security.   

 

HMRC estimates that the use of third-party sources, and the reduction in under- and over-payments, will benefit six million customers in the short-term and up to 40 million taxpayers in future. However previous initiatives did not involve the entire British population, multiple data sets, and real-time information which re often both incorrect and incomplete.  

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Personal Tax Accounts

 

The Personal Tax Account gives taxpayers information on their tax affairs 24 hours a day, 7 days a week.

 

Services include:

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• filing a Self-Assessment tax return

• claiming a tax refund directly into your bank account

• checking and managing tax credits

• checking your State Pension and national insurance contributions

 

For information visit www.gov.uk/personal-tax-account where you can sign up for free. 

 

 

MB

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