Key Tax Changes for LTD Companies – April 2025

Running a Limited Company? Here’s what’s changing from April 2025 and how to prepare:

1. Corporation Tax Adjustments

Corporation Tax will increase for companies with profits over £250,000.

The rate will be set at 25%, while companies earning under £50,000 will continue to pay at the lower rate of 19%.

Companies with profits between £50,000 and £250,000 will be taxed on a sliding scale.

Learn more about Corporation Tax: https://www.gov.uk/corporation-tax

2. Dividend Tax Reduction

The dividend allowance will be reduced to £1,000 in 2025, and further to £500 in 2026.

Directors and shareholders should consider alternative methods of remuneration to mitigate the tax burden.

For more details on dividend tax: https://www.gov.uk/tax-on-dividends

3. R&D Tax Credit Changes

Businesses claiming Research and Development (R&D) tax credits will need to follow stricter guidelines to ensure compliance.

HMRC will require more detailed evidence of R&D activities to qualify for claims.

Learn more about R&D tax relief: https://www.gov.uk/guidance/claiming-tax-relief-for-research-and-development

4. VAT & Digital Reporting

From April 2025, more businesses will need to comply with Making Tax Digital (MTD) for VAT.

This means all VAT submissions must be made digitally via approved software.

For MTD VAT details: https://www.gov.uk/government/collections/making-tax-digital

💡 How to Prepare:

• Review your dividend strategies to account for reduced tax-free allowances.

• Ensure your business meets the MTD requirements for VAT and Corporation Tax filings.

• Keep accurate records to support R&D tax credit claims.

At Alerio Consulting, we can help your business stay ahead of these tax changes.

Contact us today for guidance!

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