Budget time is upon us again.  For a pre-election budget there was very little in the way of tax giveaways or movements to reduce the tax burden on UK businesses and taxpayers.

Nonetheless, we have marked out some of the key points clients should be made aware of.  Most changes are minor, but the biggest change by far is a massive tax increase on anyone with AirBnB properties or other holidays lets.

It is worth bearing in mind that with the next UK general election rumored to be due in early May, a new government may push for a quick new budget with their own fiscal policies.


Simple Changes

  • The VAT Registration Threshold has been increased from £85,000 to £90,000 – still well below inflation since this rate hasn’t been raised for a decade but this is at least a bit of help for small companies below this threshold.
  • The National Insurance rate for Employee National Insurance and Self Employed National Insurance has been cut by 2%. The Employer’s National Insurance rate will remain the same but a lot of small employers don’t pay this anyway as you’re entitled to a waiver on your first £5,000 of Employer’s NIC.
  • The tax thresholds have once again not risen in line with inflation, with the government pursuing a policy of increasing tax on all UK businesses and households using fiscal drag.
  • The Non-Dom tax regime and remittance basis are abolished – this will not affect most clients.
  • New £5,000 ISA for people buying shares specifically in UK based companies – details to be announced in future.
  • The Higher Rate Capital Gains Tax Rate on residential property sales has been cut from 28% to 24% – a small break for landlords selling rental properties.
  • From April 2026 The High Income Child Benefit Charge threshold has been increased. Under current rules taxpayers start to lose child benefit once they earn £50,000; this gradually decreases until at £60,000 they have to hand back all child benefit payments they receive.  Under new rules these two amounts have been increased to £60,000 and £80,000 respectively.


Holiday Let Changes

The government have abolished the special rules in place for Holiday Lets from 06 April 2025 – this is a big change for AirBnB landlords, so to summarize:

Holiday Lets will no longer be entitled to claim mortgage interest as an expense against your property income.

Holiday Lets also lose the ability to claim 100% Capital Allowances when purchasing fixtures and fittings.

Capital Gains tax relief for selling these has now been abolished – previously people selling a Holiday let business would pay tax at 10%.  This is now in line with other residential property at 18% and 24%.

Income from Holiday Lets will no longer be eligible income for the purposes of making personal pension contributions.

This is an extremely steep cliff edge and may provoke a rush for people seeking to dispose of AirBnB properties before the new rules come into effect.  Alternatively, many are likely to convert properties back into long term rental premises.


Final Points

A final repeat of a point made in our last blog post.  The Chancellor has once again announced increased funding for HMRC in public and once again snuck into the small print that this £240 million per year fund is ringfenced solely to be spent on more HMRC debt collectors.

We repeat our last comments – in our experience HMRC’s service is totally inadequate and we spend multiple hours every week informing their current debt agents that they are pursuing fictional debts which are created by multiple errors at HMRC’s back end.  Unfortunately this reality has still not filtered through to the upper echelons of either HMRC or the UK Treasury.  Clients can presumably expect the current appalling HMRC service levels to continue into the future as the government have shown no inclination whatsoever to address these problems or to even recognize their impact on the UK Small Business Sector.