2025 Spring Budget
- Ish Mukit
- May 30, 2025
- 3 min read
Updated: Oct 7, 2025
By the end of May 2025, the effects of the Spring Budget are beginning to be felt across the UK. The announcements made earlier in the spring have already shaped the tax year, with new thresholds and rules that came into force from 6 April.
But May is not just about reflecting on policy. It is also a month of deadlines and compliance. Employers had until 31 May to provide employees with their P60s, and the calendar is already pointing toward upcoming obligations in June and July.
Spring Budget Reaction
The Spring Budget confirmed adjustments to income tax and National Insurance thresholds which came into force on 6 April 2025, marking the start of the new tax year. These changes affect take-home pay, employer costs, and overall tax liabilities for the 2025/26 period.
Property owners also saw further tightening of capital gains allowances, which applied from April. This means disposals taking place in the 2025/26 year may now attract higher tax charges. Contractors were reminded of HMRC’s renewed focus on employment status, with the updated CEST tool launched on 30 April 2025 to improve clarity around IR35 rules.
The Budget also introduced incentives for green and digital investment, which apply to qualifying expenditure incurred from April 2025 onwards. These measures are intended to encourage innovation, though the practical benefits will depend on whether smaller businesses can access the schemes effectively.
How it impacts you
For sole traders and employees, the income tax and NIC thresholds that took effect from 6 April are already impacting take-home pay. While some will see little difference, others may notice reduced efficiency in how their income is taxed, making planning more important than ever.
Employers faced the annual 31 May deadline to provide P60s, a reminder of their year-end obligations to staff. For those running small payrolls, meeting these deadlines is essential to maintaining compliance and avoiding penalties.
Contractors now need to navigate the revised CEST tool, in use since 30 April. Status determinations may differ from past results, raising the importance of record-keeping and clear contractual terms.
Property owners considering disposals this year must now plan under the new, reduced allowances for capital gains. This could significantly affect net returns, particularly where large gains are involved.
Looking ahead, businesses should note that 1 June 2025 is the corporation tax payment deadline for companies with accounting periods ending 31 August 2024, and that the 31 July 2025 second payment on account is fast approaching for those within Self-Assessment.
What you can do
If you are a sole trader or director, now is the time to review your remuneration strategy in light of the new tax and NIC thresholds. Adjusting the balance between salary, dividends and pensions can help you remain tax-efficient throughout 2025/26.
Employers should ensure that P60s were issued by 31 May and check payroll systems to confirm compliance. If any issues remain, addressing them quickly reduces the risk of HMRC penalties.
Contractors should retest engagements using the new CEST tool and retain evidence of each determination. Being proactive now can reduce stress later if HMRC challenges your status.
Property owners considering disposals should run the numbers with the new capital gains allowance in mind and consider spreading sales across multiple tax years to mitigate liabilities.
Finally, plan ahead for the next key dates: corporation tax payments due 1 June 2025 and second Self-Assessment payments due 31 July 2025. Building these into cashflow forecasts now ensures smoother planning and avoids last-minute pressure.
At Ledgr Accountants, we guide clients through each of these changes, deadlines and obligations - making compliance manageable and helping you take advantage of planning opportunities as they arise.
Ish Mukit
Senior Accountant
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