In this month’s Enews, we look at April’s increase in minimum wage rates. There is also an update on the Loan Charge Review and news on UK exports to update you on, we look at the response of affected UK businesses to US tariffs on imports. There is also a reduction in red tape for hospitality businesses and news on pensions reforms to update you on. We also look at the new service launched by Companies House that allows individuals to verify their identity through GOV.UK. There is also the launch of the government’s new Cyber Governance package, containing the Cyber Governance Code of Practice, and recommendations on the upcoming Spending Review to update you on. Finally we look at the cost of tax red tape on small businesses. There is also the business reaction to tariff negotiations and HMRC’s latest guidance for employers to update you on.
- Minimum wage rose on 1 April
- Loan charge review calls for evidence
- UK firms show ‘resilience’ as exports grow in January
- Price rises most likely response to US tariffs
- Government calls time on red tape for pubs, clubs, and restaurants
- Pension reforms needed to help individuals through their retirements
- Companies House begins to verify identities
- Business group welcomes launch of Code of Practice
- Spending Review ‘could brighten living standards outlook’
- Tax red tape costs small businesses nearly £25 billion a year
- Government taking right approach to tariff negotiations
- Latest guidance for employers
Minimum wage rose on 1st April
Increases to the National Living Wage and National Minimum Wage took effect from 1 April.
From April 2025, the NLW will increase by 6.7% and the NMW by as much as 18% depending on the category of the worker.
The NMW is the minimum amount per hour workers are entitled to be paid by law. Different rates apply depending on the category of the worker.
The apprenticeship rate applies to apprentices under 19 or 19 and over in the first year of apprenticeship. The NLW applies to those aged 21 and over.
| NLW | 18-20 | 16-17 | Apprentices | |
| From 1 April 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
Peter Bickley, Technical Manager – Employer Taxes, ICAEW, said:
‘Although the rise in the minimum wage will be welcomed by many workers, it presents a further challenge for employers already facing significant changes from April 2025, not least the increase in the rate of, and secondary threshold for employers’ National Insurance contributions, albeit that the bigger employment allowance should help small employers.
‘Employers must ensure that they continue to comply with the requirements as it is a criminal offence not to pay someone the minimum wage.’
Internet link: GOV.UK ICAEW website
Loan charge review calls for evidence
The independent review into the loan charge has issued a call for evidence with examples of promotional material and marketing leaflets a priority for the review team.
The review was announced by the Treasury in January and is being led by Ray McCann, a former President of the Chartered Institute of Taxation.
It is now asking people affected by loan charge to get in touch with evidence of the schemes they were signed up to by noon on 30 May.
McCann said:
‘What the review needs most is documentary evidence, such as copies of marketing material, letters, emails and so on sent to you by the promoters of these schemes.
‘This will supplement the information the review already holds and add to the great deal of information, albeit mostly anonymous, that is in the public domain.
‘It will greatly help the review team understand why so many have become involved in these schemes, the responsibility the promoters have for bringing misery to so many and the difficulties you have had in bringing your involvement to a close.
‘The review team has suggested several questions in each section, these can be answered as they have been asked, where they are relevant, or used as a guide to the kind of information the review team needs. The review team also plan to speak to some of those involved as part of the review.’
Internet link: GOV.UK
UK firms show ‘resilience’ as exports grow in January
Total UK exports in goods and services rose by 2.8% in January, according to the latest trade data from the Office for National Statistics (ONS).
Goods exports were up by 3.5% on this while services exports up by 2.3% month on month.
Non-EU goods exports had strong growth in January with a rise of 5.7% in volume terms, while EU goods exports rose by 1.3% month on month.
Total import volumes into the UK fell by 0.9% in January, with goods imports down by 1.7% in volume terms, while services imports rose by 0.6% in January.
William Bain, Head of Trade Policy at the British Chambers of Commerce (BCC), said:
‘UK companies are showing resilience in a more difficult trading world.
‘With US tariffs now a reality, the prospect of more to follow, and retaliatory tariffs by some of our trading partners, the rest of 2025 could be challenging for UK exporters in particular.
‘That is why the forthcoming Industrial and Trade Strategies need to provide practical measures to help boost export performance in key UK sectors – from professional and business services, and advanced manufacturing, to defence and life sciences.
‘We also need to see the government push for a new settlement with the EU, our biggest trading partner, to help remove barriers for UK businesses and support them to grow and expand.’
Internet link: ONS website BCC website
Price rises most likely response to US tariffs
Price increases are the most likely response to US tariffs by affected firms, according to a survey conducted by the British Chambers of Commerce (BCC).
The survey found that 32% of firms with trade exposure to the USA say they will increase prices in response to the tariff.
Alongside increasing prices, 15% said they would seek alternative suppliers, while 13% said they expected to absorb the costs.
Shevaun Haviland, Director General of the BCC, said:
‘This data sets out very clearly the immediate impact of US tariffs and the extent of business concern. With retaliatory moves by other countries likely to escalate, the prospect of a global trade war is increasing, alongside a widening of the economic fallout.
‘But there is strong support for the government’s approach to continue negotiation and not immediately retaliate. We believe a deal can be done as the US has already been open to talks. But firms don’t want to have all our eggs in one basket and want to see closer trading relationships with the EU and other markets.
‘They do not consider this to be an either/or scenario and we must continue to pursue a three-pronged approach of better trade relations with the US, the EU and the Indo-Pacific region.
‘This survey also gives an early warning sign on the economic impact in the UK of these tariffs, with price increases being the most likely response by firms.’
Internet link: BCC website
Government calls time on red tape for pubs, clubs and restaurants
Pubs, clubs and restaurants will benefit from a reduction in the red tape that has stifled hospitality business, the government said.
Action includes moves to improve the application of licensing laws and strengthening businesses’ competitiveness. This will give diners, pub and partygoers more time and more choice to enjoy what the UK hospitality has to offer, the government says.
The changes include a landmark pilot that could see more alfresco dining and later opening hours in London, as the Mayor of London is granted new ‘call in’ powers to review blocked licensing applications in nightlife hotspots.
The government says that if successful, this approach could be rolled out to other mayors to work with their own local police forces across England.
Businesses have long indicated that the current licensing system lacks proportionality, consistency, and transparency – creating barriers to growth and investment for business.
Chancellor of the Exchequer, Rachel Reeves, said:
‘British businesses are the lifeblood of our communities. Our Plan for Change will make sure they have the conditions to grow – not be tied down by unnecessarily burdensome red tape.
‘We’ve heard industry concerns and we’re partnering with businesses to understand what changes need to be made, because a thriving night time economy is good for local economies, good for growth, and good for getting more money in people’s pockets.’
Internet link: GOV.UK
Pension reforms needed to help individuals through their retirements
Reforms are needed to make the pension system easier to navigate successfully in order to help reduce the risk of a shortfall in retirement, according to the Institute for Fiscal Studies (IFS).
The think tank says that private sector employees are increasingly accumulating retirement savings in ‘defined contribution’ (DC) pensions (pension pots that do not guarantee a regular income through retirement).
Since 2015, people over 55 have been able to withdraw money from DC pensions in any way they choose.
According to the IFS, as this form of wealth becomes more important, people face too many complex and risky decisions through retirement.
This increases the risk that many exhaust their private resources and fall back purely on state pensions and benefits, especially later in retirement, the think tank added.
Bee Boileau, Research Economist at IFS, said:
‘The forthcoming Pension Schemes Bill is expected to introduce default retirement income solutions. Done well, these should improve outcomes for many, given the risks many face when drawing down pension savings through retirement at present.
‘But key questions remain – in particular, there will be some for whom a retirement income default will not be right. The government and pension providers must ensure that it is straightforward to opt out of whatever new defaults are introduced, and that as far as possible those making these decisions are sufficiently informed and helped.’
Internet link: IFS website
Companies House begins to verify identities
A new service has been launched that allows individuals to verify their identity directly with Companies House through GOV.UK.
The introduction of identity verification is one of the key changes to company law as part of the Economic Crime and Corporate Transparency Act 2023. Companies House has landmark new and enhanced powers to combat economic crime and boost economic growth.
More than six million people will be required to comply in the 12 months after identity verification becomes a legal requirement later this year. According to Companies House, identity verification will provide more assurance about who is setting up, running, owning and controlling companies in the UK.
Louise Smyth, CEO of Companies House, said:
‘Identity verification will play a key role in improving the quality and reliability of our data and tackling misuse of the companies register.
‘To save time later, we encourage directors, people with significant control of companies (PSCs) and those filing information with Companies House to verify their identity during the voluntary window.
‘We expect identity verification to become mandatory from Autumn 2025.’
Internet link: GOV.UK
Business group welcome launch of Code of Practice
The Institute of Directors (IoD) has welcomed the launch of the government’s new Cyber Governance package, which is underpinned by the Cyber Governance Code of Practice.
The Code of Practice shows boards and directors how to manage digital risks and protect their business from cyber-attacks.
It outlines how directors can build resilience to a wide range of cyber risks across their organisation.
The Code, which has been co-designed with technical experts from the National Cyber Security Centre (NCSC) and a range of governance experts across industry, focuses on the actions senior leaders should take to govern cyber risks effectively within their organisation.
Erin Young, Head of Innovation and Technology Policy at the IoD, commented:
‘With cyber-attacks becoming more frequent, harmful and costly, cyber resilience is now a crucial boardroom responsibility. The new Cyber Governance Code of Practice provides practical guidance for boards and directors to effectively govern cyber risk and safeguard future growth.’
Internet link: IoD website
Spending Review ‘could brighten living standards outlook’
Think tank the Resolution Foundation has suggested that the government’s upcoming Spending Review could help to brighten the ‘bleak living standards outlook’ for low-to-middle income families.
The Foundation stated that the Review should prioritise spending on services they use the most, and that public services are crucial for quality of life. It said that household disposable income is expected to fall from 2025/26 but public service spending is rising by £18 billion a year in 2028/29 in real terms.
Public services are not, however, used equally across all households, the Resolution Foundation added. The allocation of extra funding between departments at the June Spending Review will determine which families benefit.
Emily Fry, Senior Economist at the Resolution Foundation, said:
‘Britain’s outlook for real disposable incomes is bleak, especially for poorer households after the benefit cuts announced at the Spring Statement. But the wider picture is more positive when the £18 billion boost to public services is included, as this will provide vital ‘in-kind’ benefits, particularly for poorer households.
‘A focus on improving families’ experience of a range of downtrodden services in the Spending Review could help boost quality of life for lower income families in a challenging living standards environment.’
Internet link: Resolution Foundation website
Tax red tape costs small businesses nearly £25 billion a year
Tax compliance costs the UK’s small businesses nearly £25 billion a year, according to recent research conducted by the Federation of Small Businesses (FSB).
The average small firm spends £4,500 and 44 hours a year on tax compliance, according to the research.
These annual totals could include time spent trying to contact HMRC, the cost of staff time used to manage compliance, and the price of software subscriptions and/or an external accountant, among other outlays.
Poor levels of customer service from HMRC are a recurring theme within the report, making tax compliance even more difficult and stressful for small businesses.
Tina McKenzie, FSB’s Policy Chair, said:
‘Tax compliance is far from a niche issue – it affects all five and a half million small businesses in the UK, costing them £4,500 and 44 hours a year each on average.
‘Collectively, that adds up to an annual total cost to the small business community of nearly £25 billion and over 240 million hours.
‘This is money and time that could be far, far better spent on building up their business, and the overall cost to the economy in terms of lost growth and wasted productivity is enormous.
‘Given the challenges facing the economy, and the need for growth, reducing the burden placed on small firms by tax compliance must be a priority – something the government has recognised as a priority for other regulators. HMRC should be included in the government’s drive to make regulation better support growth.’
Internet link: FSB website
Government taking right approach to tariff negotiations
The UK government is taking the right approach to tariff negotiations with the US despite downgrades to the economic outlook, says the British Chambers of Commerce (BCC).
The International Monetary Fund (IMF) has cut its growth forecast for global GDP to 2.8% from 3.3% this year.
The IMF predicts that the increase in tariffs and uncertainty will lead to a significant slowdown in global growth.
US growth is now expected to be 1.8% this year, down from the IMF’s estimate of 2.7% for the US in January. The forecast for the UK has also been cut from 1.6% to 1.1%.
William Bain, Head of Trade Policy at the BCC, said:
‘The downgrades for both the UK and global economy should come as no surprise to anyone.
‘Firms were already facing into a wall of higher domestic costs, including the national insurance rise, before the US unleashed its explosive tariff proposals.
‘But there is strong support for the government’s approach to continue negotiation and not immediately retaliate. The US has been open to talks and the signals that a deal can be reached are promising.
‘But talk of recession remains premature, it is by no means certain. The government must do all it can to boost business confidence by providing practical support around infrastructure projects, reforming business rates and cutting red tape in the right areas.’
Internet link: BCC website IMF website
Latest guidance for employers
HMRC has published the latest issue of the Employer Bulletin. The April issue has information on various topics, including:
- the new rates of the National Minimum Wage
- reporting expenses and benefits for the tax year ending 5 April 2025
- changes to notifications by employers to operate PAYE on a proportion of a globally mobile employee’s income and changes to Overseas Workday Relief.
- the tax treatment of double cab pickups.
- Capital Gains Tax — working out your adjustment for the 2024 to 2025 tax year.
Internet link: GOV.UK
