From taxes to wages: 10 key legal updates for small businesses in 2025

The new financial year is set to bring some big changes for small business owners. Staying ahead of the game will be key to avoiding fines and unexpected costs.

At Tide, we’re all about helping you save time and money for your business. With that in mind, we’ve rounded up 10 legal changes that could impact your business – from tax updates to wage hikes and even new recycling rules.

Here, we cover what the new laws are, when the changes will come into effect, and what you can do to prepare.

1. New recycling rules – 31 March 2025

If your business has more than ten employees, you’ll soon need to start sorting waste into three separate categories:

• Dry recyclables (like paper, plastic, and metal)
• Food waste
• General waste

Make sure your team is aware of the new system and that you have the right bins in place. Failing to comply could result in hefty fines.

If you run a cafe, restaurant, bakery, or even an office, this might mean adjusting your waste disposal process or working with a new waste management provider.

Businesses with less than 10 employees should still take note. Although these rules don’t apply to your business just yet, they will come into effect for all businesses in March 2027.

So, it’s worth getting organised sooner rather than later.

2. National Minimum and Living Wage increases – 1 April 2025

To enhance worker’s rights and earnings, wages are set to increase, with the National Living Wage rising by 6.7% to £12.21 per hour.

If you employ staff, you’ll need to make the necessary adjustments to your payroll systems and your budget. This might mean making some tough calls like putting prices up or cost-cutting from other areas to cover the wage increase.

3. Employer’s National Insurance Contribution increase – 6 April 2025

Employers will now pay 15% in National Insurance contributions, up from 13.8%. This means higher employment costs, making it more expensive to hire and retain staff.

If you have a team of people helping you to run your business, just as above, you’ll need to allocate extra budget to cover the rising costs, or explore cost-saving measures.

4. Employment allowance boost – 6 April 2025

It’s not all doom and gloom – there is some good news too! To offset rising National Insurance costs, the employment allowance (which reduces employers’ NI liability) is increasing from £4,000 to £5,000.

This is a win for small businesses, helping cut costs and reinvest in growth. For example, say you run a small IT consultancy with three employees. You’ll save an extra £1,000 on NI contributions, which you could then use to fund new equipment or training.

5. Changes to business size thresholds – 1 July 2025

The way businesses are classified (micro, small, medium, or large) is changing. If your company moves into a new size bracket, you may face new reporting obligations and regulatory requirements.

This means that growing businesses could be subject to stricter financial reporting and compliance rules.

For example, a growing e-commerce brand previously classified as a small business might now need audited accounts, adding extra costs and admin.

Be sure to check which category your business falls into, as this could also affect financial statements and tax obligations.

6. Capital Gains Tax changes – 6 April 2025

Selling a business? Be aware that Capital Gains Tax (CGT) on Business Asset Disposal Relief is rising to 14% in April 2025, with another increase to 18% set for 2026.

If you’ve been thinking of selling your business or key assets, it might be worth doing so before the higher rates come in.

7. Business rates relief cut – 1 April 2025

If you run a business in retail, hospitality, or leisure, note that the business rates discount is dropping from
75% to 40%

This means higher costs for shops, cafes, pubs, and hotels.

8. Companies House privacy updates – 1 September 2025

Good news if you’re a company director – you’ll now have the option to remove your home address from public records at Companies House.

The change will increase privacy and security, and is especially great news for small business owners who work from home.

9. Employment Rights updates – 1 October 2025

The Labour government is bringing in new legislation banning zero-hour contracts and fire-and-rehire practices.

From 1 October, businesses will have to offer more stable contracts, which could impact businesses that rely on flexible workforces.

For example, a cleaning company that hires casual workers on-demand, will now have to offer guaranteed hours. This could change the number of employees or how they schedule staff.

10. Stronger discrimination laws – TBD

New updates are coming in to strengthen protections against workplace discrimination – particularly regarding gender, race, and disability.

If you hire people, you’ll need to make sure all hiring promotions and workplace rules follow the new rules. If not, you could face discrimination complaints and legal claims.

What should you do next?

Legal updates can be overwhelming, but staying informed and ahead of these changes can save you time, money, and potential headaches in the long run. Take a moment to review which of these updates affect your business and start making adjustments now.

• Review your budgets to account for wage and tax increases
• Update contracts and policies to comply with new employment laws
• Plan ahead for business rates and CGT adjustments

If needed, consult a legal or financial expert to ensure you’re fully prepared for the financial year ahead.

Disclaimer: Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.