April 6th - New Tax Year in the UK brings New Rules

Sunday, April 6, 2025

The start of the new Tax Year in the UK is always on 6 April and runs until 5 April of the following year. Why? I can't answer that, but I do know that it's out of step with most, if not all, other advanced countries.

[Image courtesy of iStock]

I've lived in France and Germany in the past and now live here in Spain. The tax year in those countries is the same as the calendar year, ie January 1st until December 31st.

Preamble

So why I am I posting about this on Eye on Spain? Well, because there are large numbers of British people living here and even more who own property which they visit for up to 90 days a year (since Brexit) and they may/will have tax liabilities in the home country.

So, how many of us are there?

A Google search reveals conflicting numbers - no site in the first ten which appeared as a result of my search agrees on the figure. 

Numbers range from 293,171 UK nationals who were residents in Spain at the start of 2023, according to padrón census records from town halls across the country (SGM Abogados - a legal firm) to 412,040 Britons who are residents in Spain, according to immigration observatory data, as of December 31st 2022 (Right Casa Estates - an estate agency).

According to the latest figures from Spain’s Ministry of Migrations, there are a total of 409,763 Brits living in Spain. This is over 115,000 more than the figure stated by Spain’s statistics body the Instituto Nacional de Estadistica INE (source - The Local - a news website).

Wikipedia starts with a definition: "British people or Britons, also known colloquially as Brits, are the citizens of the United Kingdom, the British Overseas Territories, and the Crown dependencies."

The online encyclopaedia goes on to inform us that there were 262,885 Brits residing in Spain in 2020.

Anyway, whatever the true figure, there are lots of us here, all keen to know what Chancellor of the Exchequer Rachel Reeves has done.

^{Photo of Rachel Reeves [Facebook]}

 
The main fiscal points

[Source: Which? The Consumers' Association]

Stamp duty holiday comes to an end, plus rates hiked on second homes.

The current extra stamp duty relief for first-time buyers and home movers in England and Northern Ireland is set to end on 31 March 2025. From 1 April, the stamp duty threshold for first-time buyers will drop from £425,000 to the previous rate of £300,000. 
From the same date, home movers will pay stamp duty on purchases over £125,000, rather than the current £250,000.

Council tax rises

Households should brace themselves for higher council tax bills from April 2025.

Most councils in England are able to raise council tax rates by 5% without needing to call a referendum. 

Those rules remain unchanged for the next financial year, so you could see your council tax bill increase by up to 5% again in 2025. Given the average Band D council tax bill in England is currently £2,171, this could mean a rise of £109.

Employer National Insurance increase

The government will increase National Insurance contributions for employers from 13.8% to 15% from 6 April 2025.
In addition, the threshold for when employers need to start paying the tax will be lowered from £9,100 to £5,000.
Although these changes won't affect most people directly, this change could have a knock-on effect on employees, through employers offering lower pay increases or less generous employment benefits in future.
 

Other financial changes which affect me personally from April 6th

Pensions
- A 4.1% rise is payable on my UK state pension from April 6th. I got the letter informing me yesterday.
- My private pension will get a 1.7% increase. I expect a letter with my P60 any day now.

Whilst these increases are welcome, they are not going to up my spending power.

[MPF]

 
Travel
- Rail Travel (RENFE) - discount railcard. The last time I purchased one it cost 12 euros for a year.
- Tarjetasesentaycinco - free for over-65s. Gives all kinds of discounts and free services. The most interesting benefit for us is 50% off interurban bus travel.

^{[Image courtesy of Ideal]}

Links:

HOW TO ….. do your Spanish INCOME TAX return?“

WHEN I’M 65…”: HOW TO ….. get a tarjetasesentaycinco

5TH TIME LUCKY - IN LOVE WITH SEVILLA AT LAST

 
Photos and Images:

Facebook, Ideal, iStock, MPF, Right Casa Estates, SGM Abogados, The Local, Wikipedia

 
© Pablo de Ronda

 
Acknowledgements/Sources:

Consumers Association, HMRC, Merseyside Pension Fund, Right Casa Estates, SGM Abogados, The Local, Which?, Wikipedia