New Tax Year - What Employers Need To Know

New Tax Year Brings Changes to Finances

As we approach the new tax year in April 2025, employers and employees alike should be aware of the statutory changes coming into effect. Understanding these changes will ensure compliance and help businesses plan accordingly. Below, we outline the key updates to employment law, including wage increases, statutory pay adjustments, and anticipated legislative reforms.

April 1st 2025 - Minimum Wage Rise

From April 2025, new statutory rates will come into force, impacting workers across various age groups:

The exact amount of the increases will be:

• National Living Wage (for workers aged 21 and over) will increase to £12.21 per hour.
• National Minimum Wage for 18–20-year-olds will rise to £10.00 per hour.
• National Minimum Wage for 16–17-year-olds and apprentices will increase to £7.55 per hour.

Statutory Rate Changes 

In addition to wage increases, several statutory payments will also see an uplift:
Statutory Sick Pay (SSP) will rise to £118.75 per week.

Statutory Maternity Pay (SMP) and other family-related leave payments will increase to £187.18 per week.

The Lower Earnings Limit (the minimum amount employees must earn to qualify for certain statutory payments) will rise to £125 per week.

Introduction of Neonatal Care Leave

One of the significant anticipated changes is the introduction of Neonatal Care Leave and Pay. This new entitlement is expected to take effect in April 2025, although the regulations still need to be finalised by Parliament. Once in place, this provision will grant employees the right to take time off when a baby under their care requires hospital treatment in a neonatal unit.

May 2025: Real Living Wage Adjustments

Although not a legal requirement, businesses accredited by the Living Wage Foundation must comply with new Real Living Wage rates to maintain their accreditation.

From 1 May 2025, these rates will be:

• £12.60 per hour across the UK.
• £13.85 per hour in London.

Expected Employment Law Reforms in 2025

Several additional employment law changes are anticipated in 2025, including:

• New Right to Paternity (Bereavement) Leave. Expected to take effect in April 2025 (subject to final regulations), this new entitlement will grant fathers and non-birthing partners access to paternity bereavement leave in cases where a mother or adoptive parent dies. The leave may mirror maternity leave, providing up to 52 weeks off to support affected families during a difficult time.
• Changes to Child Employment Rules. If passed into law, the Children’s Wellbeing and Schools Bill will introduce reforms regarding the employment of children. This includes potential amendments to working hours and a new requirement for all employers hiring young workers to obtain a permit.

Find out more about the Employment Rights Bill here.

Further Employment Law Changes on the Horizon

Looking beyond 2025, the Employment Rights Bill is expected to bring further changes to employment law. However, these reforms are not anticipated to come into force until 2026.

Get Expert Legal Advice

Phone or email Coles Miller employment solicitor Hugh Reid for specialist legal advice on employment contracts, disciplinary procedures, terminating contracts of employment and making workers and employees redundant. He is based at our Poole town centre head office.