Legislation in the Recruitment Sector : Now & Next

Tax Changes Coming Into Effect from April – What You Need to Know.

As announced in the October Budget, there are a number of tax changes to be aware of from April 2025. Some of these have been well documented, while others have not received quite so much media coverage:

• NMW increase to £12.21ph
• Employer’s NI now 15% with the annual threshold reduced to £5,000 (from
  £9,100)
• NIC employment allowance increase from £5,000 to £10,500, with the allowance no longer restricted and open to all employers
• No change to the personal, dividend or savings allowances for UK taxpayers
• Business Asset Disposal Relief (formerly Entrepreneur’s Relief) increase from 10% to 14%

Employment Rights Bill

Although the Bill is currently going through parliament and may be subject to amendments, let’s look at what’s going to change with the upcoming ERB:

• The end to zero-hours contracts, with an introduction of guaranteed hours. What will this look like in the recruitment sector?
• Extending SSP by removing the lower limit and the 3 waiting days. With sick pay available from the 1st day of absence, how will contractors respond to this?
• Paternity Leave rights from Day 1 of employment
• Establishing of the Fair Work Agency to bring together existing enforcement agencies and give stronger powers to investigate and penalise.

Umbrella Legislation

In addition to the EBR, the government have announced legislation to increase compliance in the umbrella company market.

Following a review and consultation, the government has announced they will:

• Define umbrella companies, allowing for their regulation
• The Fair Work Agency will be responsible for enforcing new umbrella regulation
• Introduce legislation stating the recruitment agency (if one exists in the supply chain) is to be the employer for tax purposes

New Red Planet will be keeping this page updated with further information as it becomes available.

If you would like to discuss your options ahead of these changes, please contact us for a chat by calling us on 0161 713 1730 or use the contact form below to send us a message – and one of our team will call you back.