What changes to the law affect my business in 2025?

As years go, 2025 is quickly hotting up to be a biggie for small businesses, freelancers, sole traders and landlords as they negotiate a raft of incoming legislation changes across a host of industries.

We'll see the majority of these changes coming in at the start of the new tax year in April, with others coming into force later in the year. We’ve summarised some of the biggest for you, in date order, here.

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Procurement Act

Simpler recycling regulations

National Living Wage and National Minimum Wage increases

Increase to Employer's National Insurance

Employment Allowance increase

Increases to statutory sick pay and parental pay

Company size threshold increases

Capital Gains Tax adjustments

Neonatal Care (Leave and Pay) Act

Business Rates adjustment

Suppression of personal information on Companies House

Identity verification on Companies House

Renters’ Rights Bill

Employment Rights overhaul

Procurement Act

Date of change: 24 February 2025

What’s changing: The Procurement Act 2023 (launching this year) will introduce a streamlined process for public sector procurement in the UK. It’s designed to simplify the process and make it more fair and transparent for any company bidding for public contracts.

Who’s impacted: Businesses bidding for public contracts and public sector organisations looking to procure goods, work or services.

What companies will need to do: Companies that want to bid for public contracts will need to review their policies and practices to make sure they align with the Act, especially focussing on their ethical and sustainability commitments. It’s also important that relevant staff are trained on the new reporting and compliance obligations.

The new process comes with a shiny interface so it’s important to familiarise yourself and your team with the new digital procurement platform.

Read on: Get more information on gov.uk.

Simpler recycling regulations

Date of change: 31 March 2025

What’s changing: In a bid to make Britain more green, the government is rolling out new, streamlined recycling regulations. These rules will make it easier for businesses to recycle while boosting the UK’s recycling rates.

Based on the rules of your waste collector, all companies with over 10 staff that produce any sort of waste — including offices — have a legal duty to separate their waste into dry recyclables, food waste and black bin waste.

Who’s impacted: All businesses with more than 10 employees producing waste — including offices — will have a legal duty to separate their waste.

What companies will need to do: Speak to your waste collection agency to understand the rules you need to follow from March, and if required, get enough bins to accommodate the new waste rules. Don’t forget to speak to your team about the new requirements so you don’t fall foul of the law and get fined.

Read on: Get more information on gov.uk.

National Living Wage and National Minimum Wage increases

Date of change: 1 April 2025

What’s changing: The legal minimum amount that can be paid to workers who are 21 and over, known as the National Living Wage, will rise to £12.21 per hour. Workers aged between 18 and 20 will also see a 16.3% increase in the national minimum wage to £10 an hour.

Who’s impacted: Any employers with staff aged 18 and over, earning the National Living Wage or National Minimum Wage.

What employers will need to do: Employers should prepare for increased payroll expenses.

Read on: Get more information on gov.uk.

Increase to Employer's National Insurance

Date of change: 6 April 2025

What’s changing: From April 2025, there will be significant updates to employers’ National Insurance (NI) contributions. First, the contribution rate will increase from 13.8% to 15%. Second, the payment threshold will decrease from £9,100 to £5,000, meaning employers will pay NI at 15% for salaries above £5,000.

Who’s impacted: Employers of all sizes, particularly those with higher payroll costs.

What employers will need to do: If you haven’t already, review your payroll budgets to account for increased NI contributions and lowered thresholds. Don’t forget to communicate these changes internally to ensure accurate payroll adjustments.

Read on: Get more information on gov.uk.

Employment Allowance increase

Date of change: 6 April 2025

What’s changing: The employment allowance, which allows smaller businesses to reduce their NI liability, will rise from £5,000 to £10,500. This means small businesses can reduce their National Insurance liability by a larger amount, hopefully helping to cushion the blow of the higher contribution rate and lower threshold.

Who’s impacted: Small businesses that rely on the employment allowance to offset NI contributions.

What employers will need to do: Check your eligibility for the increased employment allowance to reduce your liability.

Read on: Get more information on gov.uk.

Increases to statutory sick pay and parental pay

Date of change: 6 April 2025

What’s changing: The amount of statutory maternity, paternity, adoption, shared parental leave and parental bereavement pay increases from £184.30 per week to £187.18 per week.

Who’s impacted: Employers and employees who use Share Incentive Plans (SIPs).

What employers will need to do: Employers should ensure that their policies and procedures are up to scratch should an employee need to take this leave.

Read on: Get more information on gov.uk.

Company size threshold increases

Date of change: 6 April 2025

What’s changing: The criteria used to define a business's size — like turnover, number of employees or balance sheet totals — will be adjusted, with the thresholds increasing. This may affect eligibility for benefits, relief and compliance requirements.

These changes aim to more accurately reflect current inflation and economic growth and could benefit many businesses to keep their access to small business rate relief or avoid stricter compliance requirements as they grow.

Who’s impacted: Growing businesses on the cusp of moving from small to medium or medium to large categories.

What businesses will need to do: Review the new thresholds and assess how they apply to your business size classification. You may want to update your compliance processes if your company moves into a higher classification.

Read on: Get more information about these thresholds.

Capital Gains Tax adjustments

Date of change: 6 April 2025

What’s changing: Capital Gains is a tax you pay when you sell, gift or swap an asset that's increased in value. It covers most personal possessions valued at over £6,000 (except cars) — for example, paintings or antiques — but also covers second properties, shares and business assets.

The amount of money you receive from the sale is not taxed, but the gain you make is taxed.

From April, the Business Asset Disposal Relief rate on “disposals” made on or after this date changes. The lower rate of Capital Gains Tax (CGT) increases from 10% to 18%, and the higher rate increases from 20% to 24%.

Who’s impacted: Business owners planning asset sales.

What business owners will need to do: Consider the timing of asset sales to minimise CGT liabilities before the new rates take effect.

Read on: Get more information on gov.uk.

Neonatal Care (Leave and Pay) Act

Date of change: April 2025

What’s changing: The parents of newborn babies who are hospitalised in their first 28 days of life for seven or more days will have the right to take neonatal leave and pay for up to 12 weeks.

Anyone taking this leave will also be entitled to return to the same job after their absence. It’s expected that the pay will be statutory, or, if lower, 90% of the average weekly earnings.

Who’s impacted: Employers and employees who use Share Incentive Plans (SIPs).

What employers will need to do: Employers should ensure that their policies and procedures are up to scratch should an employee need to take this leave.

Read on: Get more information about this new law.

Business Rates adjustment

Date of change: April 2025

What’s changing: Relief for retail, hospitality and leisure businesses will decrease from 75% to 40%, capped at £110,000 per business. Additionally, the standard multiplier — the figure used to calculate business rates — will increase to 55.5p.

Who’s impacted: Any business that pays business rates at the standard rate.

What businesses will need to do: Businesses should reassess their budgets to accommodate these changes.

Read on: Get more information on gov.uk.

Suppression of personal information on Companies House

Date of change: Spring/summer 2025

What’s changing: From January 2025, business owners have been able to suppress their business address on Companies House if it’s their home address. But as of later in the year, further personal information can also be suppressed from historical company documents, in a bid to enhance privacy protections.

Who’s impacted: Company directors, secretaries and shareholders whose personal information is listed on public filings.

What company directors will need to do: If you want to, you can submit a request to suppress information via the updated process.

Read on: Get more information on gov.uk.

Identity verification on Companies House

Date of change: Autumn 2025

What’s changing: The UK government plans to introduce mandatory identity verification for individuals setting up, running, owning or controlling companies. This measure aims to enhance transparency and combat fraud.

Who’s impacted: Anyone setting up, running, owning or controlling a company in the UK will need to confirm their identity to prove they are who they claim to be.

What company directors will need to do: Companies House are using a phased approach and will contact business owners over the coming months to explain the approach — so watch out for communication.

Read on: Get more information on gov.uk.

Renters’ Rights Bill

Date of change: 2025 TBC

What’s changing: The Renters’ Rights Bill is currently being discussed in parliament and if it goes ahead in its current guise, is set to introduce sweeping reforms to improve tenant protections and include:

• The abolition of Section 21 evictions: Landlords will no longer be able to evict tenants without providing a valid reason, ending “no-fault” evictions
• The introduction of open-ended tenancies: Fixed-term agreements may be replaced by open-ended tenancies, offering renters greater security and flexibility
• Higher standards for rental properties: Landlords will be required to meet higher standards for property maintenance and safety
• Right to have pets: Tenants will have the legal right to request permission to keep pets, which landlords must consider reasonably
• Rental market transparency: Plans to make rent increases more predictable and transparent, potentially with limits to prevent excessive hikes
  

Who’s impacted: Landlords

What landlords will need to do: It’s important to keep in the loop with the final legislation, so keep an eye on the news. Depending on what gets passed, you may need to review and update your existing contracts to comply with the abolition of Section 21 and other new requirements, including that properties meet new safety and quality guidelines.

Read on: Get more information on gov.uk.

Employment rights overhaul

Date of change: 2025 TBC

What’s changing: The Employment Rights overhaul is in the planning phase and looks to introduce potential reforms for employees, including the elimination of zero-hour contracts, a "right to switch off", employees gaining the right to request flexible working from day one, enhanced redundancy rights and increased statutory entitlements for parental leave.

Who’s impacted: All employers, depending on the legislation that passes.

What employers will need to do: The Bill hasn’t been finalised yet, so keep an eye on the news to see what changes you may need to implement. It could be contractual or policy updates or more significant overhauls to the way your business runs.
Read on: Get more information on gov.uk.

If you’ve got any questions on how these regulations might affect your business or your business insurance, please reach out to our friendly customer team.