Things to look out for in 2025...
Now that 2024 is behind us, we can take a look forward at some significant changes in store for 2025. There are forthcoming developments that will be of particular interest to those of you who regularly attend UK Training’s courses. The main topic areas affected are as follows...
Companies House Reforms
The implementation of the Economic Crime and Corporate Transparency Act continues to make fundamental changes to the purpose and role of Companies House. A number of the changes have already come into force and we are expecting to see more and more changes rolling out in 2025, including...
- Individuals will be able to voluntarily verify their identity
- Checks on ACSPs will be made to authorise them to carry out verification services
- Identity verification will become a compulsory part of incorporation and new Director and PSC appointments
- Starting the 12-month transition phase for existing directors and PSCs to verify their identity
- The striking off of companies formed for false basis and the register being annotated in a wider range of circumstances
Companies House are regularly providing updates and adding to the implementation timeline - these 2025 changes and much more are covered on our half-day course.
The Companies House Reforms course - View >>
VAT
The most significant development regarding VAT concerns the Government's decision to introduce VAT on private school fees. Starting from 1st January 2025, these fees will be subject to a 20% VAT rate. The tax will be applied to fees for tuition and also for boarding. There are many steps that schools need to take to prepare for the changes, especially if they have never had to deal with VAT before.
Schools will need to make changes to their administration and compliance systems and processes. They will also need to adapt their budgeting arrangements and financial planning.
However, there will be some benefits to this change in tax status. When schools become registered for VAT they will be able to make reclaims against expenditure on taxable supplies and on capital projects, such as construction works.
VAT for Private Schools - View >>
Employment Law
The Employment Rights Bill is likely to be one of the most significant pieces of legislation affecting employers for many years. It was published on 10th October and will undergo consultation and Parliamentary scrutiny in early 2025.
Key elements of the Bill include restrictions on ‘exploitative’ zero hours contracts, which are used by many gig economy contractors. The practice of ‘fire and rehire’ will also be banned, except in extreme circumstances. It will also see the removal of qualification periods and pay levels for workers to receive various statutory benefits and protections, including the right to claim unfair dismissal.
The Bill will reform or repeal key Trade Union legislation passed by the last Government and establish a new single enforcement body to increase pressure on employers to comply with employment laws.
Employment Law & HR Update - View >>
Payroll
The biggest change to consider for all payroll teams is the ending of the P11D process in 2026 and the introduction of mandatory payrolling. 2025 will be a key year for planning and preparation, with many organisations considering going down the voluntary payrolling route for the 25/26 tax year - either in full or on a trial basis.
2025 year will see a number of changes including the introduction of Statutory Neonatal Leave and Pay, which comes into force in April. We also expect to see the Paternity Leave (Bereavement) Act 2024 come into force during this period.
April brings the much talked about rise in Employers’ National Insurance contributions to 15%. The secondary threshold will reduce to £5000 (£417 per month / £96 per week). The Employment Allowance will increase to £10,500 and small employer restrictions will be removed – make sure you claim it in April!
The national minimum wage will increase on 1st April 2025, with the following new rates:
- National Living Wage (21 and over): £12.21 per hour, a 6.7% increase from £11.44
- 18–20 year olds: £10.00 per hour, a 16.3% increase from £8.60
- 16–17 year olds and apprentices: £7.55 per hour, an 18% increase from £6.40
The Government asked the Low Pay Commission to review the wage setting process to ensure that new rates reflect the cost of living, ensuring the NLW does not fall below two-thirds of median hourly earnings and accounts for inflation.
International Trade
UK Carbon Border Adjustment Mechanism (CBAM) comes into force in 2027, but 2025 will be crucial for business preparation. This will particularly impact importers of aluminium, cement, fertilizer, hydrogen, iron and steel. Companies should focus on preparing for reporting data to the UK Government by 2027. The EU has already introduced CBAM and UK exporters may need to provide emissions data to their EU customers.
The evolution of the trade relationship between the UK and the EU will warrant close attention in the next couple of years. There are potential developments in the areas of food and farming standards, youth mobility between states, reduced regulatory burdens, veterinary agreements and border checks for exporters.
The US export market may also present significant challenges, with Donald Trump promising to impose sweeping tariffs on foreign goods. UK exporters should assess the potential impact on their business, including analysing their supply chains which may include, for example, components originating from China.
Full implementation of the EU General Product Safety Regulation (GPSR) takes place in December 2024 so 2025 will be the first full year of compliance. UK exporters will need to maintain EU-based Responsible Persons. The GPSR focuses primarily on online sellers and direct-to-consumer businesses.
UK businesses will need to be aware of the growing importance of supply chain resilience and diversification in an increasingly unstable international marketplace. Focus on reducing dependencies on single market suppliers and be aware of the enhanced importance of origin documentation and compliance.
International Trade & Customs courses - View >>
Data Protection
The new UK Government has now introduced the Data (Use and Access) Bill (DUAB) into Parliament. It represents the biggest change to the data protection regime since General Data Protection Regulation came into force.
The new Bill will amend the UK GDPR and the Data Protection Act 2018. Most of the measures were proposed by the previous Government so it is likely to receive little or no opposition in Parliament during the early part of 2025.
The proposed changes affecting businesses include relaxed rules on automated decision making by AI, responding to Subject Access Requests, the use of cookies, consent for direct marketing and increased fines for PECR offences.
There will also be changes regarding legitimate interests for public bodies, international data transfers, international law enforcement access and the role of the Information Commissioner.
Conclusion
The next year will see the new Government further embellish its plans to grow the economy, which may provide new opportunities for UK businesses to develop. We will also see more details on recently announced legislation as the various Bills make their way through Parliament.
Whatever your business, everyone at UK Training wishes you the best of luck and we hope that 2025 is a successful year for you all.
Written by Paul Murphy
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