Changes affecting businesses from April 2025
The government is due to implement a number of new rules and regulations that will affect businesses.
Here are some of the main changes companies will need to prepare for.
National Insurance contribution rises
As announced in the Autumn budget, from April 6, 2025, businesses will face a double rise in Employer's National Insurance contributions. The first is a 1.2% increase in the contribution rate, up from 13.8% to 15%. The second is the contribution threshold, the salary point at which employers start paying National Insurance. This is being lowered from £9,100 to £5,000 a year.
As a result, employers will now have to pay contributions of 15% of everything an employee earns over £5,000 a year instead of 13.8% of everything over £9,100.
The Employment Allowance, the government initiative that allows eligible employers to reduce their National Insurance liability by up to £5,000 for the 2024/25 tax year, will also increase to £10,500 in April 2025.
Mandatory identity verification for company directors and PSCs
The Economic Crime and Corporate Transparency Act 2023 has a number of measures which are gradually being introduced over time. From autumn 2025, it will be mandatory for all new and existing company directors and people with significant control (PSCs) to verify their identity with Companies House.
For newly incorporated businesses, verification must take part at the point of incorporation, while directors and PSCs of existing companies will have 12 months to verify their identity. From spring 2026, identity verification will also apply to other registration types, including members of limited liability partnerships (LLPs).
In February 2025, the government will set up a register of Authorised Corporate Service Providers (ACSPs) who can carry out these verification services for businesses and provide details to registrars.
A new corporate offence for large organisations failing to prevent fraud
Another provision of the Economic Crime and Corporate Transparency Act is the ‘failure to prevent fraud offence,’ which comes into effect on September 1, 2025. Aimed at encouraging the adoption of stronger anti-fraud measures, the offence means large organisations may be held criminally liable if an employee, agent, subsidiary or other ‘associated person’ commits fraud with the intention of benefitting the organisation.
If prosecuted, organisations would need to show that they had reasonable fraud prevention measures in place when the fraud was committed.
Expansion of employee rights
The new government pledged to improve working conditions for employees and some of these changes are being implemented in April. The new tax year will see small increases, from £184.30 to £187.70 per week, for maternity pay, maternity allowance, paternity pay, adoption pay, shared parental pay, and parental bereavement pay. Statutory sick pay will also rise from £116.75 to £118.75 per week.
The Neonatal Care (Leave and Pay) Act also comes into force on 6 April. This provides parents of babies that require neonatal care the right to up to 12 weeks' leave and pay from day one. This is in addition to their entitlements to maternity, paternity or other types of leave.
On April 1, rises will take effect in the National Living Wage and National Minimum wages. The National Living Wage, for workers aged 21 and over, increases by 6.7% to £12.21 per hour. The Minimum Wage increases significantly more, to £10.00 for 18-20-year-olds, up 16.3%, and to £7.55 for 16-17-year-olds and apprentices, up 18%.
There is also the potential for other employment rights changes during the year, such as with new entitlements to flexible working.
If you are affected by any of the changes being introduced in the new 2025 tax year and wish to discuss your options, the Wilkinson Woodward team is here to help.
Contact us at https://www.wilkinsonwoodward.co.uk/ or call us on 01422 339600.