A new government always brings big change and Labour have certainly been busy since they came into power last year. But a new year brings even more opportunities to shake things up.
From privacy concerns to discrimination in the workplace – what legal changes could impact your small business in 2025? Keep reading to learn more about:
New recycling regulations – 31 March
If your business has more than ten employees, it’ll soon be a legal obligation to separate your waste into the following:
- dry recyclables
- food waste
- black bin waste
Your next steps are to make sure you’ve spoken to your team to make sure they’re following the new rules – as well as making sure you have enough bins to accommodate the changes. Failing to follow these rules could result in fines.
You should also speak to your waste management company to see if they have any specific requirements.
If you have less than ten employees, these rules won’t apply to you yet – but they will from 31 March 2027.
Increases to the National Living Wage and National Minimum Wage – 1 April
From 1 April 2025, the National Living Wage is set to rise for staff over 21 years of age. The National Minimum Wage will also increase for workers 18-20. Rates will also change for apprentices and those under 18.
These rates change on 1 April every year. The table below shows the current and new rates.
| Rates each year | 21+ | 18-20 | Under 18 | Apprentices |
| 2024 | £11.44 | £8.60 | £6.40 | £6.40 |
| 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
Increasing Employer’s National Insurance – 6 April
It’s a legal requirement for businesses to pay employer National Insurance contributions for each of their employees – and several changes are due to take effect from April 2025.
The amount you pay in National Insurance for each employee is set to increase from 13.8 per cent to 15 per cent. The secondary threshold will also be reduced to £5,000 a year.
| 2024-25 | 2025-26 | |
| National Insurance rate | 13.8% | 15% |
| Annual threshold | £9,100 | £5,000 |
| Monthly threshold | £758 | £417 |
| Weekly threshold | £175 | £96 |
Employment allowance increase – 6 April
The employment allowance for the 2025/26 tax year will increase from £5,000 to £10,500, which can significantly reduce your tax bill.
As an employer, you can claim the employment allowance in order to reduce your secondary Class 1 National Insurance contributions.
Check your eligibility for claiming the employment allowance in our guide ahead of the new tax year.
Changing the company size thresholds – 6 April
Are you a small business or a medium business? New government legislation will increase the turnover thresholds for micro, small, and medium-sized businesses. The average total number of employees in your business will remain unchanged.
Check out the new thresholds below and see where your business stands.
| Business size | New turnover threshold | Previous turnover threshold | New balance sheet total | Previous balance sheet total | Number of employees |
| Microbusiness | £1m | £632,000 | £500,000 | £316,000 | 10 |
| Small business | £15m | £10.2m | £7.5m | £5.1m | 50 |
| Medium business | £54m | £36m | £27m | £18m | 250 |
Capital gains tax adjustments – 6 April
Capital gains tax applies when you dispose of an asset that’s increased in value. The total amount of money you make from selling an asset isn’t taxed, but the profit you make is.
If you’re a sole trader, your gains may qualify for the business asset disposal relief. But from April, the lower rate of capital gains tax that applies to this relief will increase from 10 per cent to 18 per cent.
So if you have assets you plan to dispose of, you may want to do so before this date.
Business rates are changing – April
Two changes surrounding business rates are due this April. First is business rates relief for retail, hospitality, and leisure businesses – which will be cut to 40 per cent (from 75 per cent) for the upcoming tax year.
Secondly, the figure you use to calculate your business rates (known as the standard multiplier) will increase to 55.5p.
Companies House privacy updates – throughout the year
If your business is registered with Companies House, you know that your address is visible to anyone viewing your company information. From January this year, business owners were able to hide their business address if it was the same as their home address.
But more privacy updates are coming – with the ability to hide the following:
- residential addresses in most instances when shown elsewhere on the register
- date of birth for documents registered before 10 October 2015 (since this date, only the month and year of birth have been publicly displayed)
- signatures
- business occupation
As well at this, Companies House will also be introducing a new identity verification process in order to crack down on fraudulent businesses. From autumn 2025, you’ll need to verify your identity in order to set up or control a company in the UK.
Employment Rights Bill creeps closer – TBD
Last October, the UK government published the Employment Rights Bill, set to be the ‘biggest update to workers’ rights in a generation’. While there’s no specific date announced for the changes, it’s likely some of these will start to come into effect in 2025.
The changes include:
- an end to forced zero hour contracts
- day one entitlement to parental and bereavement leave
- protection against unfair dismissal
- easier access to flexible working
- improvements to Statutory Sick Pay
- an end to fire and rehire practices
- more protection for pregnant workers and new mothers
- establishing a Fair Work Agency
Discrimination law developments – TBD
October 2024 saw the Equality Act become the Worker Protection Act. And this year could reveal further developments in various workplace discrimination court cases.
February already saw judgement on the Higgs v Farmor’s School case – which questioned whether employees sharing potentially controversial beliefs outside of work (including on social media) can result in fair dismissal.
What else is changing in 2025?
- Key dates small businesses need to know for 2025
- 5 new tax laws for businesses in 2025
- 6 new driving laws for 2025: a business guide
- When is the UK tax year? Important dates and deadlines
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