Money laws 2025: four key UK financial law changes coming in 2025 that will affect you - from tax to EV cars

• There are some major financial updates coming into effect in the UK in 2025
• They include new regulations aimed at improving tax compliance and sustainability
• The changes will impact businesses, financial services, and individuals

As we step into 2025, the financial landscape in the UK is set to undergo significant changes with the introduction of new legislation and amendments to existing laws.

Among other things, these updates aim to ensure compliance with international standards, facilitate a smooth transition to more sustainable transport options, and foster growth for UK businesses.

Whether you’re a taxpayer, a business owner, or a financial services provider, staying informed about these developments is crucial. Here’s a look at some of the key changes coming into effect this year, which could affect you.

UK Finance Bill

The UK Finance Bill 2025 introduces some important changes, especially for inheritance tax and the taxation of wealth from other countries.

One key change is replacing the old “domicile” rule with a new “long-term UK resident” test, which will help decide who is considered a resident for tax purposes, affecting people who live in the UK but own assets in other countries.

This could lead to changes in how inheritance tax applies to people with international wealth.

The bill also adds the “undertaxed profits rule” to the UK’s tax system for multinational companies, part of a global effort to prevent companies from avoiding taxes by shifting their profits to lower-tax countries.

The goal is to make sure that companies pay at least a minimum amount of tax wherever they operate, promoting fairness in the global tax system.

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Changes to Company Car Tax

Electric and ultra-low emission vehicles (ULEVs) are becoming increasingly popular in the UK. To support this shift while balancing revenue needs, the government has announced a gradual increase in the percentage rates for company car tax.

From the 2025-26 tax year onwards, the rate for electric cars will rise by 1% annually, eventually reaching a maximum of 5% by 2027-28. For ULEVs, the maximum rate will increase to 21% over the same period.

It’s all part of the government’s efforts to encourage the switch to more sustainable transportation while ensuring that tax revenues keep pace with the growing adoption of greener vehicles.

READ MORE: Electric vehicle drivers to face road tax hikes in 2025

‘Operational resilience’ in finance firms

It seems that not a month goes by when major banks aren’t hit by some technical glitch taking down their systems and causing widespread disruption for thousands of customers.

But by March 2025, UK financial services firms will be required by law to fully comply with updated rules for “operational resilience”, to minimise disruptions to essential services, especially with an ever-increasing reliance on digital systems.

This means making sure that important third-party providers, like cloud services and IT vendors, meet high standards; firms should check their contracts and risk management plans to meet these requirements properly.

International Tax Compliance (Amendment) Regulations 2025

The draft International Tax Compliance (Amendment) Regulations 2025 bring changes to align UK tax reporting with the OECD’s Common Reporting Standard (CRS).

These updates are designed to improve the sharing of information between tax authorities and help fight tax evasion and avoidance.

Businesses and individuals with financial interests in other countries should check the new rules to make sure they comply.

As these changes shape the financial landscape in 2025, we want to hear your thoughts! How do you think these updates will impact you or your business? Share your opinions or concerns in the comments section.