As we step into April, there are several important updates that could impact homeowners, landlords, business owners, and families alike. This month, we explore how renting out part of your home may affect your Capital Gains Tax liability and the reliefs available to minimize it. If you receive Child Benefit, don't forget that payments increase this month, but you must update HMRC if your 16-year-old is continuing in education or training to avoid disruptions.
For business owners, we cover the tax implications of selling business assets, including potential adjustments to your taxable profits. If you own property jointly with your spouse or civil partner, you may be able to split rental income based on actual ownership rather than the default 50:50 split-provided you meet HMRC's requirements.
With Making Tax Digital for Income Tax becoming mandatory in 2026, now is the time to start preparing for digital tax reporting. We also highlight key tax deadlines for April and May to help you stay on track and avoid penalties.
Renting out part of your home may affect Capital Gains Tax when you sell. While Private Residence Relief applies, Letting Relief can reduce taxable gains. Learn how PRR, Letting Relief, and exemptions impact your tax liability.
If you have tenants in your home, it is essential to understand the Capital Gains Tax (CGT) implications. Typically, there is no CGT on the sale of a property used as your main residence due to Private Residence Relief (PRR). However, if part of your home has been let out, your entitlement to PRR may be affected.
Homeowners who let out part of their property may not qualify for the full PRR, but they could be eligible for letting relief. Letting relief is available to homeowners who live in their property while renting out a portion of it.
The maximum letting relief you can claim is the lesser of the following:
Example:
In this case, the maximum letting relief due is £7,500, which is the lower of:
As a result, you would not owe any CGT-the £75,000 gain is fully covered by £67,500 in PRR and £7,500 in letting relief.
Note that if you have a lodger who shares living space with you or if your children or parents live with you and pay rent or contribute to housekeeping, you are not considered to be letting out part of your home for tax purposes.
From April 2025, Child Benefit increases to £26.05 for the eldest child and £17.25 for others. Payments stop after a child turns 16 unless they continue in approved education or training. Parents must update HMRC by 31 August to avoid disruptions.
Taxpayers entitled to the child benefit should be aware that HMRC usually stop paying child benefit on the 31 August following a child's 16th Birthday. Under qualifying circumstances, the child benefit payment can continue until a child reaches their 20th birthday if they stay in approved education or training. This must be confirmed to HMRC, or payments will stop.
Approved education must be full-time, with more than 12 hours per week of supervised study or course-related work experience. Approved education includes A levels, T levels, Scottish Highers, NVQs up to Level 3, home education (if started before 16 or after 16 with special educational needs), study programmes in England, and pre-apprenticeships. The course must be started before the child turns 19.
Child Benefit cannot be claimed if your child is:
Approved training should be unpaid and can include:
Courses that are part of a job contract are not approved.
HMRC sends a letter in your child's last year at school asking you to confirm their plans. The letters include a QR code which, when scanned, directs them straight to GOV.UK to update their claim quickly and easily online. This can also be done on the HMRC app.
Parents have until 31 August 2025 to tell HMRC that their 16-year-old is continuing their education or training, and to continue receiving Child Benefit. No child benefit is payable after a young person reaches the age of 20 years.
When selling assets on which capital allowances were claimed, you may need to adjust your taxable profits with a balancing charge or allowance. Understanding these rules ensures you don't face unexpected tax liabilities. Learn how to handle asset disposals correctly.
Typically, the value of the asset sold is considered to be the amount for which it was sold. However, if the asset was given away, no longer used, or sold for less than its market value, then the market value should be used.
If you initially claimed 100% tax relief on the asset, the business is required to add back the difference between the sale price and the original value to their taxable profits. This adjustment is known as a balancing charge. A balancing charge ensures that a business does not receive more tax relief than it was entitled to on the purchase of the asset. Essentially, the balancing charge operates in the opposite manner to a capital allowance, increasing the amount of profit on which tax is due.
If writing down allowances were used initially, you may face either a balancing charge or a balancing allowance.
There are specific rules that apply when calculating a balancing charge, particularly in the following cases:
In the year your business closes, instead of claiming capital allowances, you must enter a balancing charge or balancing allowance on your tax return.
Couples who jointly own rental property are usually taxed 50:50, even if they own different shares. But if you're married or in a civil partnership, Form 17 lets you split income based on actual ownership-provided you meet HMRC's rules.
The standard tax treatment for couples living together, whether married or in a civil partnership, is that property income held jointly is split 50:50, regardless of the actual ownership proportion.
However, if the ownership is unequal and the couple wishes to have the income taxed in line with their respective shares, they must notify HMRC and provide evidence of the unequal beneficial interests in the property. This is done by submitting Form 17, which declares the beneficial interests in joint property and income.
A Form 17 declaration can only be made by spouses or civil partners living together who own property in unequal shares, with the income allocated in proportion to these shares. Couples who are separated or in other types of relationships are not eligible to submit a Form 17 declaration.
The declaration is only valid if both partners agree. If one partner disagrees, the income will continue to be split 50:50, regardless of the ownership structure.
Once submitted, a Form 17 declaration remains in effect until there is a change in the couple's status, such as separation or divorce, or a change in the ownership structure. If either of these occurs, the 50:50 income split will be reinstated.
There are specific situations in which Form 17 cannot be used, such as when spouses or civil partners own property as beneficial joint tenants, income from shares in a close company or for partnership income.
In cases where property is owned in unequal shares, submitting a Form 17 declaration can offer tax benefits under certain circumstances.
Making Tax Digital for Income Tax (MTD for IT) will become mandatory in phases from April 2026. If you're self-employed or a landlord earning over £50,000, get ready for quarterly updates, digital record keeping, and a new penalty system.
Initially, MTD for IT will apply to businesses, self-employed individuals, and landlords with an annual income exceeding £50,000. From 6 April 2027, the rules will extend to those with an income between £30,000 and £50,000. A new system of penalties for late filing and late payment of tax will also be introduced.
In the Spring Statement 2025, the government confirmed that MTD for IT will apply to sole traders and landlords with income over £20,000 starting in April 2028. The government will also explore how to treat those with income below the £20,000 threshold.
Starting in April 2025, HMRC will begin writing to taxpayers whose 2023-24 self-assessment returns show that their total income from self-employment and property is approaching or exceeds £50,000. These letters will notify them of their obligation to use MTD for IT starting in April 2026.
Although MTD for IT becomes mandatory in 2026, you can opt to sign up voluntarily before then. This allows you to help HMRC test and refine the system while also familiarising yourself with the new rules. While signing up is currently voluntary, there are specific eligibility requirements, and not all taxpayers will qualify. If you are eligible, you can sign up on GOV.UK.
If you volunteer to participate in testing the MTD for IT service, the new penalties for late submissions and late payments will apply. This will replace the existing penalties for the relevant tax years. No penalties will apply for the quarterly updates for volunteers in 2024-25 or 2025-26.
1 April 2025 - Due date for corporation tax due for the year ended 30 June 2024.
19 April 2025 - PAYE and NIC deductions due for month ended 5 April 2025. (If you pay your tax electronically the due date is 22 April 2025).
19 April 2025 - Filing deadline for the CIS300 monthly return for the month ended 5 April 2025.
19 April 2025 - CIS tax deducted for the month ended 5 April 2025 is payable by today.
30 April 2025 - 2023-24 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.
1 May 2025 - Due date for corporation tax due for the year ended 30 July 2024.
19 May 2025 - PAYE and NIC deductions due for month ended 5 May 2025. (If you pay your tax electronically the due date is 22 May 2025).
19 May 2025 - Filing deadline for the CIS300 monthly return for the month ended 5 May 2025.
19 May 2025 - CIS tax deducted for the month ended 5 May 2025 is payable by today.
31 May 2025 - Ensure all employees have been given their P60s for the 2024/25 tax year.