Six reasons why you could pay more tax in 2025 - from stamp duty to alcohol and cigarettes

Sarah Coles, caput of idiosyncratic finance, Hargreaves Lansdown, has rounded up each the changes that were announced successful the Autumn Budget - and however they could interaction your wallet

A wealth adept has revealed the six ways you could extremity up paying much tax adjacent year.

Sarah Coles, caput of idiosyncratic finance, Hargreaves Lansdown, has rounded up each the changes that were announced successful the Autumn Budget - and however they could interaction your wallet. From changes to stamp duty and Inheritance Tax, to continued freezes connected Income Tax and National Insurance thresholds, determination are plentifulness of updates that you should beryllium alert of.

Ms Coles said: "Tax has dominated the speech successful the 2nd fractional of 2024, with endless speculation astir what mightiness alteration successful the Budget, followed by a fig of unwelcome announcements - and past the prolonged fall-out arsenic radical weighed up what it would mean for them."

Frozen income taxation and National Insurance thresholds

Income Tax and National Insurance thresholds are presently frozen until 2028. This means workers get dragged into paying much taxation erstwhile their wages summation - either by having to wage taxation for the archetypal time, oregon by moving into a higher taxation bracket. There is simply a idiosyncratic allowance of £12,570 a twelvemonth earlier you commencement to wage tax. Ms Coles added: "It’s not conscionable much Income Tax you person to interest about, but perchance higher rates connected everything from dividend taxation to superior gains tax, and a shrinking idiosyncratic savings allowance."

Capital gains taxation hike for stocks and shares

The magnitude you wage successful Capital Gains Tax erstwhile you merchantability stocks and shares for nett has risen from 10% to 18% for basal complaint taxpayers, and from 20% to 24% for higher and further complaint taxpayers. This kicked successful the time aft the Budget. Ms Coles said: "For those couples who negociate their finances to guarantee the little earner pays immoderate superior gains tax, it’s a peculiarly harsh blow, due to the fact that the complaint for these taxpayers has risen much than for higher earners."

Stamp work vacation comes to an end

You presently wage Stamp Duty successful England and Northern Ireland if your spot is worthy implicit £250,000. This higher complaint was introduced successful September 2022 but is owed to spell backmost down to its erstwhile level of £125,000 successful March 2025. If you're a first-time buyer, you lone commencement to wage stamp work if the spot you're buying is worthy implicit £425,000 - but this volition spell backmost down to £300,000. Ms Coles said: "The extremity of the taxation interruption is apt to punctual a unreserved successful the archetypal fewer months of the year, arsenic radical effort to get purchases sorted up of the change. There’s a hazard this volition propulsion up prices successful the short-term, truthful portion you could wage taxation connected little of the acquisition price, you could extremity up paying much for the spot successful return."

Frozen Inheritance Tax thresholds

The inheritance taxation nil complaint set volition stay astatine £325,000 and the residence nil complaint set astatine £175,000 successful the adjacent taxation year. In fact, acknowledgment to the Budget, it volition enactment astatine this level until 2030. Meanwhile, the IHT yearly acquisition allowance is spending its 4th decennary astatine £3,000. It means much estates volition person much inheritance taxation (IHT) to pay. IHT utilized to beryllium seen arsenic a affluent person’s tax, but a premix of booming house prices and threshold freezes mean this whitethorn not beryllium the lawsuit for overmuch longer. It means we’re spending overmuch much successful taxation – and are apt to proceed to bash so.

Council taxation bills to rise

Council taxation volition emergence again successful April, with section authorities fixed the close to rise bills by 4.99%. They whitethorn beryllium capable to rise assembly taxation by much than this but lone if they clasp a referendum. Ms Coles said: "Given that truthful galore section governments person been struggling to marque ends meet, it’s apt that an atrocious batch of them volition opt for the biggest imaginable increase."

Alcohol work frost ends – and cigaret taxes volition rise

Alcohol work rates connected non-draught products volition summation by 3.6% successful enactment with RPI ostentation from February adjacent year. Alcohol work is charged connected each drinks which are much than 1.2% ABV strength, either astatine the constituent of accumulation oregon erstwhile they are imported. Cigarette prices roseate aft the Budget and are apt to bash truthful again successful the autumn of 2025.