The tax year runs from 6 April to 5 April the following year. Also known as the fiscal year, this is the period during which any calculations, assessments and financial reporting will be based.

15 winners and losers from the new tax year and financial year have emerged. The tax year runs from 6 April to 5 April the following year. Also known as the fiscal year, this is the period during which any calculations, assessments and financial reporting will be based.

April 5 marks the last chance to claim any overpaid tax from the 19/20 tax year, claims for overpaid tax generally have a four-year limit from the end of the relevant tax year.

And ahead of the new fiscal year, Labour Party government Chancellor Rachel Reeves has revealed a raft of changes people can expect. The most high-profile of the changes includes the new National Insurance contribution rules for bosses.

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Sarah Coles from Hargreaves Lansdown oted that the move would make it “more expensive” to employ people and while some businesses will take a hit to the bottom line, others will let staff go.

She added: “Some may wear the cost for now, but choose not to bring in pay rises as quickly as they otherwise might.

New tax year winners

Minimum wage workers

The National Living Wage (for those over 21) will rise next April by 6.7% from £11.44/hour to £12.21/hour. The National Minimum Wage will also rise for 18-20 year-olds, towards a single adult rate that, in the Chancellor’s words, will: “make work pay”.

Critics of the wealthy

As part of the Budget, Rachel Reeves confirmed she would fulfil the promise made in Labour’s manifesto to remove the tax status, in a move that one advisor dubbed a “colossal misjudgement”.

“I have always said that if you make Britain your home, you should pay your tax here. So today, I can confirm, we will abolish the non-dom tax regime and remove the outdated concept of domicile from the tax system from April 2025,” Reeves said in her speech.

In its place, the Chancellor will introduce a residence-based scheme, which will provide incentives to investors and wealthy foreigners to come to the UK temporarily. But it is likely to have a considerably shorter sunset period than the 200-year-old scheme it is replacing.

Temporary movers

Temporary movers to the UK will enjoy the first four years of residence with no UK tax charge on their foreign income and gains. They can also bring these funds to the UK, tax free for the same period.

From 6 April 2025, the new regime will provide 100% exemption from UK taxation on foreign income and gains for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident in any of the ten consecutive years prior to their arrival.

Alcohol drinkers

Those who enjoy the occasional pint will be heartened to know that the draught duty will be cut by 1.7%, saving a whopping 1p on your pint down the pub. And aalcohol duty rates on non-draught products will be increasing in line with inflation from February 2025.

Investors

A 10-year extension in the Enterprise Investment Scheme and Venture Capital Trust scheme to April 2035 has also been promised for those that like their riskier investments with a side of tax relief.

Pensioners

Income Tax and NIC thresholds will be unfrozen from 2028/29 and will increase in line with inflation, and the commitment to the State Pension triple lock will be upheld.

The basic state pension will increase from £169.50 to £176.45 per week, while the full new state pension will rise from £221.20 to £230.25 per week. Over the course of a year, the basic state pension will go from £8,844 to £9,198 – so a lift of £353 – and the new state pension is going from £11,502 to £11,975 – so a rise of £461 a year.

Drivers and motorists

A temporary lifeline has been extended to vehicle owners as the Chancellor has committed to the 5p/litre cut in fuel duty proposed by the last Tory government for the next year.

The five pence per litre cut to fuel duty will be extended for a further 12 months and the planned increases in line with inflation for 2025-26 will be cancelled. This means the fuel duty freeze will expire on March 22, 2026, with the average car driver expected to save £59.

Benefits recipients

Benefit claimants will also see an uplift in payments from April – although by not as much. The government’s plans to fix the broken benefit system will build on the biggest employment reforms in a generation announced in the Get Britain Working White Paper, which will empower mayors to drive down economic inactivity, deliver a Youth Guarantee so every young person is either earning or learning, and overhaul jobcentres across the country.

The government is also investing an additional £26 billion to cut NHS waiting lists and get Britain back to health and back to work.

Losers

People who pay CGT

The lower rate of CGT is increasing from 10% to 18%, and the higher rate from 20% to 24%. The lifetime limit for Capital Gains Tax ‘investors relief’ is reduced from £10 million to £1million for qualifying disposals made after 30 October, and the rates of tax will change in line with Business Asset Disposal Relief.

People who pay Inheritance tax

If entrepreneurs are not caught by the CGT hike on sale, gifts of their businesses will be further exposed to IHT. From April 2026, the first £1 million of business property will continue to qualify for Business Relief (available at 100% to qualifying businesses), but the value above this amount will only garner relief at 50%, a 20% effective tax rate.

First-time buyers

Lower stamp duty thresholds on property value bands are set to take effect from 1 April 2025. Wales and Scotland have their own Land Tax regimes for property purchases.

First-time buyers will also see changes in their SDLT relief. The nil-rate threshold for first-time buyers will decrease from £425,000 to £300,000, and the cap on qualifying properties will be lowered to £500,000. This change will particularly affect first-time buyers in high-cost areas such as London. For instance, a first-time buyer purchasing a property for £625,000 will pay an additional £11,250 in SDLT due to the adjusted thresholds.

It’s important that buyers budget for higher SDLT payments, as it could affect their overall purchasing power. Additionally, first-time buyers may find it more challenging to enter the property market, particularly in areas with higher property prices.

Taxpayers

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “It’s unlikely to be a happy new tax year, because far more people risk missing out as the clock ticks forward into the new year than stand to gain from any changes being introduced. The most striking squeeze is likely to come from something that’s not changing at all – as income tax thresholds remain stuck for yet another year. It means the new tax year will usher in new challenges for all sorts of people, but while there’s nothing we can do to stop it, you can protect yourself from the impact of some of the changes.”

Personal tax thresholds have been frozen until 2028, and this basically translates to a real terms tax increase for many as they have remained at the same level since the 2021-22 tax year.

Ms Coles said: “It also means every pay rise will push more people over these thresholds, where they will pay higher rates of tax. It’s not just the tax on earnings that’s affected. When you start paying higher rate tax, your personal savings allowance shrinks, from £1,000 for basic rate taxpayers to £500 for higher rate taxpayers, and disappears altogether for additional rate taxpayers.”

Asset holders

Ms Coles explained: “If you have existing investments outside an ISA and the available allowance, you can use share exchange (Bed and ISA) to move them into the ISA and protect them from tax. Take care not to exceed your capital gains tax annual allowance of £3,000 in the process though.

“If you’re married or in a civil partnership and your partner pays a lower rate of tax, you can transfer income-producing assets into their name. It means you can both take advantage of your tax allowances.”

Employers

Labour are not reversing cuts to employees NICs, but instead are raising NICs for employers. From April 2025, employers NICs will increase by 1.2% to 15% and there will be a reduction in the secondary threshold (the level at which employers start to pay NICs on their employees’ salaries) from £9,100 to £5,000.

Employers will have an increased incentive to enrol employees in salary sacrifice schemes says Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group, as he comments: “The Chancellor has decided not to introduce National Insurance (NI) on pension contributions but a rise in employer NI by 1.2% to 15% on earnings has been confirmed.

“While the resulting higher staffing costs could impact some businesses ability to increase pension contributions, there’s an important potential pensions side effect. Workplace pensions could see a boost via an increased incentive to contribute via a salary sacrifice arrangement, where employees agree to reduce their pay in exchange for higher pension contributions.

“Both employers and employees reduce their NI liability as a result, which will now have a bigger impact for the employer. It’s worth noting that not all employers offer salary sacrifice schemes and those on lower incomes are less likely to be enrolled in one – but, taken alongside pre budget speculation, and with no changes to tax relief or tax-free cash, this could be seen as adding to a relatively positive pensions Budget.”

Private schools

The levy of VAT is applying to private school fees now confirmed to apply from January 2025.