From employment reform to tax tech and rising costs — what’s changing and what you should do next.

Running a business today means juggling shifting rules, squeezing margins, and planning ahead — all at the same time. New workplace protections, renewed HMRC scrutiny and automation, a bumpy economic backdrop, and end-of-life software deadlines are creating fresh risks and choices for employers.

This briefing cuts through the noise: we explain the key changes, the dates to watch, and practical next steps you can take now to stay compliant, protect cashflow, and keep your operations running smoothly.

Government Unveils Roadmap for the Employment Rights Bill

The government has set out its plan to implement the Employment Rights Bill, first introduced in October 2024. Framed under “Make Work Pay” and the broader “Plan for Change,” it’s one of the biggest overhauls of UK employment law in decades—likely to touch around 15 million workers. The roadmap breaks changes into stages through to 2027 so employers have visibility and time to prepare.

Key changes and timelines

Immediately (once the bill is passed):

• Repeal of the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016

• Stronger protections against dismissal for workers involved in industrial action

From April 2026:

• Statutory Sick Pay extended (no lower earnings limit and waiting days)

• Day-one paternity & unpaid parental leave

• New whistleblowing protections

• Fair Work Agency created to enforce employment rights

• Higher maximum protective award for collective redundancy cases

• Streamlined trade union recognition, plus electronic and workplace ballots

From October 2026:

• Ban on “fire and rehire”

• A fair pay agreement body for adult social care in England

• Strengthened tipping rules, with worker consultation on distribution

• Employers required to take “all reasonable steps” to prevent sexual harassment, including from third parties

• Additional trade union rights and protections

In 2027:

• Enhanced dismissal protections for pregnant employees and new mothers

• Bereavement leave

• End to exploitative zero-hours contracts, replaced with predictable hours

• Day-one protection from unfair dismissal

• Wider access to flexible working

• Gender pay gap and menopause action plans (voluntary from April 2026), plus clarified anti-harassment duties

• A modernised framework for industrial relations

What this means for your business:

• Contracts & policies: Plan updates to contracts, handbooks, and HR processes ahead of 2026/27.

• Workforce mix: Sectors using flexible or variable hours (hospitality, retail, care) will see the biggest shifts.

• Union engagement: Expect more consultation and formal processes.

• Compliance: With a dedicated enforcement agency, record-keeping and processes matter more than ever.

UK Economy: Growth Falters, Inflation Rises

Inflation ticked up to 3.6% in the year to June (from 3.4% in May), driven by higher motor fuel and food prices—marking a third consecutive monthly rise in food inflation. The Bank of England expects inflation to peak around 3.7%over the summer before easing toward the 2% target later in the year.

Growth is soft. GDP fell 0.1% in April and 0.1% in May, reflecting weaker manufacturing and retail. While earlier momentum helped, the outlook is more muted.

Interest rates remain at 4.25%. The Bank has signalled the next moves are likely downward, with markets watching the 7 August 2025 review. Falling vacancies and more candidate availability point to a cooling labour market, while higher employer NICs and the National Living Wage continue to pressure payrolls.

What to do now:

1. Re-check costs: Lock in critical inputs where possible (fuel, food, key goods).

2. Model rate cuts: If you have loans or an overdraft, run scenarios for refinancing or term changes.

3. Protect cashflow: Build a 3–6 month cash view; tighten collection and review discretionary spend.

4. Hire with care: Consider fixed-term or variable hours until demand is clearer.

5. Think export: If your offer travels well, overseas markets can offset slower domestic demand.

6. Stay budget-ready: Keep an eye on potential tax changes at the Autumn Budget.

HMRC’s Transformation Roadmap

More automation, more digital, more “right first time”

HMRC has set out a programme to modernise tax and customs by 2030, with more than 50 projects aimed at automation, self-service, and faster, more accurate compliance.

What’s changing

New PAYE service:
Via the Personal Tax Account or HMRC app, employees will be able to check and update:

• Income details

• Tax codes

• Allowances and reliefs

• Work-related expenses

This should reduce “why has my tax changed?” questions—but expect employees to look to you for guidance on how things work.

90% digital by 2030:
HMRC wants most interactions online—fewer letters and calls, more app-based services and digital forms.

AI and automation:
Expect AI-assisted case handling, better digital guidance, biometric checks, and clearer rules for how third-party software connects to HMRC systems. A Digital Disclosure Service will make corrections easier—and increase HMRC’s ability to spot issues.

Coming soon (this tax year):

• SMS confirmations for certain Self Assessment/PAYE updates

• Smoother Self Assessment onboarding/exit

• Voice biometrics for faster phone verification

• Option for higher earners to settle Child Benefit charges via tax code

In the pipeline:

• Updated late-payment penalty model

• Digitised Inheritance Tax service

• Agents able to submit tax-code-affecting information digitally

• Electronic trade documentation pilot

• From April 2026: recruitment agencies will be responsible for PAYE where umbrella companies are used

What this means for your business:

• People & payroll: Encourage staff to activate Personal Tax Accounts; expect fewer basic queries over time.

• Software readiness: Keep your payroll/accounts software up to date for API and process changes.

• Compliance posture: Real-time data tools will raise the bar—small errors could surface faster.

Windows 10 Is Ending: Are You Ready?

NCSC advice on upgrading and staying secure

Support for Windows 10 ends on 14 October 2025. After that, no security updates—leaving systems exposed if new vulnerabilities are found. Windows 11 brings stricter hardware requirements, so some older machines can’t be upgraded and may need replacing.

Why it matters:
Unpatched systems are a common entry point for ransomware and data breaches. Moving to Windows 11 delivers stronger built-in security and reduces risk without constant add-ons.

Next steps:

• Audit devices: Identify which machines can move to Windows 11 and which need replacing.

• Phase the rollout: Prioritise high-risk or high-use devices; plan downtime and backups.

• Budget early: Spread hardware and licensing costs before October 2025.

• Lean on your IT support: Validate security settings (BitLocker, TPM, MFA), and review endpoint protection.

Final thoughts

Across employment law, tax administration, the economy, and cybersecurity, the theme is consistent: more scrutiny, clearer rules, and higher expectations—but also more tools and lead time to prepare. If you’d like help reviewing contracts, payroll and software readiness, cashflow plans, or your Windows 11 upgrade path, we’re here to make the next steps simple.

Categories: Positive Accountant