How to navigate the UK tax landscape in 2025
Happy new tax year! To celebrate, Liz Ritchie is here to tell you how to navigate the UK’s tax landscape in 2025
How to navigate the UK’s tax landscape
There has been a lot said about the appeal of London, and the UK as a whole following changes to non-dom tax legislation. However, it continues to be a global hub for business and culture attracting internationally mobile individuals, with a significant proportion coming for work, study or investment.
And London’s attractiveness has been boosted by the introduction of the Foreign Income and Gains (FIG) regime. This offers new UK tax residents a four-year exemption on foreign income and gains, provided they were non-UK residents for the previous 10 tax years. A nice upside for those thinking about making the UK home.
However, this doesn’t mean that navigating the complexities of UK tax residency when you are travelling, working and living internationally is an easy job. There are guidelines which help but it is still a complex matter, and one that needs careful consideration and record keeping. UK residency for individuals is assessed based on a combination of the number of days presence in the UK and certain ties to the UK or overseas.
For example, for individuals visiting the UK on transit days – where they travel through the UK without engaging in specific activities – those transit days typically do not count towards residency. However, UK workdays, defined as days with over three hours of work, may result in UK-source income, which could be taxable. This is important to remember for those who do business in many countries and might be making visits to the UK that could be deemed taxable, even if it’s just for a few hours.
For those with dual residency, complexities can crop up with the differing tax rules countries have. Double Tax Treaties often help resolve these issues by determining a primary jurisdiction for tax purposes. However, making sure that you comply with filing obligations in multiple countries is incredibly important, as tax authorities increasingly share cross-border information.
There is absolutely no doubt that London’s global allure presents both opportunities and challenges for internationally mobile individuals. But with careful planning and professional guidance, navigating the UK’s tax landscape can be seamless, enabling people to thrive in one of the world’s most dynamic cities.
Will NI hikes see businesses flee the capital?
Rising employer National Insurance Contributions (NICs) are set to reshape London’s business landscape, forcing many firms to reconsider if London should be home. For professional service firms, key to the city’s economy, the recent changes mean, on an average salary, an additional £1,075.80 in Employer NICs. Compare this to a firm based in Manchester with an £925.80 uptick and the difference is stark.
In combination with higher operating costs, it may lead businesses to consider where else to base themselves. Regional hubs might be one option and schemes like salary sacrifice and apprenticeship programmes can also reduce costs. Agility is vital for the survival capital’s professional services firms.
Quote of the week:
“It’s good to remember that diversification exists precisely for events like this” – this reminder from our chief economist George Lagarias really resonated with me this week
Tax tips for 2025
To celebrate the new tax year, here are three personal tax planning tips for the year ahead:
- Maximise Savings: Use your full £20,000 ISA allowance and ensure your children’s JISA allowance (£9,000) is topped up before 5 April 2026.
- Plan Pension Contributions: Pensions are a great tax-free way to grow your wealth. Contribute up to £60,000 into pensions and explore your carry forward options from the previous 3 years.
- Leverage Exemptions: Make use of annual IHT gifting exemptions (£3,000), CGT allowances, and schemes like EIS (£1 million), VCT (£200,000), and SEIS (£100,000).
A recommendation
On a sunny Saturday afternoon, I listened to Gabby Logan’s Mid Point podcast featuring Annabel Croft. It was a really emotional listen at times, as Annabel shared her journey through grief and healing after the loss of her husband. She was incredibly open on life, tennis and her decision to join Strictly Come Dancing so soon after her husband’s death. A really powerful episode that is a reminder of resilience and the transformative power of new beginnings.
And my current read is Intermezzo by Sally Rooney. I grew up in Northern Ireland and most of my family are still there. As a result, I find myself drawn to Irish authors and novels set in Ireland. I really enjoy Sally Rooney’s writing style and her ability to narrate sometimes complex relationships in a simplistic way.
Liz Ritchie is head of tax at Forvis Mazars in the UK