Your Essential Business Update: Key Insights, Reforms, and Support Measures

Welcome to our roundup of our clients’ latest business news and updates. If you’d like to discuss how these insights impact your business, feel free to get in touch. We’re here to support you every step of the way!

Make Work Pay: Key Updates and What’s Next

The Labour government’s Make Work Pay plan has been a cornerstone of its policies, aiming to modernise the UK labour market and address critical economic challenges. The government has introduced several changes and proposed new legislation to support workers, businesses, and economic growth. Here’s a summary of the current developments and what’s ahead.

Addressing Labour Market Challenges

The UK has experienced a significant productivity slowdown compared to other advanced economies. The Labour government attributes this to labour market issues, including worker insecurity and difficulties businesses face in recruiting the right staff.

The Make Work Pay plan seeks to create a modern labour market by focusing on making work:

• Flexible
• Secure
• Family-friendly

This approach encourages more people to remain in the workforce, fostering individual well-being and economic growth.

Key Proposals and Reforms

1. Employment Rights Bill

The Employment Rights Bill is a crucial step in delivering the Make Work Pay agenda. Key reforms include:

• Day 1 Employment Rights: Protections such as bereavement leave, paternity and parental leave, and protection for pregnant workers.
• Banning Zero-Hours Contracts: Preventing exploitative contracts and ensuring more security for workers.
• Flexible Work as the Default: Employers must only accommodate flexible working if there are exceptional reasons not to.
• Worker Dismissal Protections: Reducing the unfair dismissal qualifying period from two years to day one of employment.

The Bill is progressing through Parliament, with consultations set for 2025 and reforms likely to take effect from 2026.

2. Fair Pay and Wage Equality

Changes to fair pay policies include:

• Unified Minimum Wage: Abolishing different rates for age groups, creating a single minimum wage.
• Strengthened Sick Pay: Removing lower earnings limits and waiting periods for Statutory Sick Pay.
• Fair Pay Agreements: Introducing consultation on fair pay practices in sectors like adult social care.
• Equal Pay Protections: Measures to prevent outsourcing from being used to bypass equal pay requirements and require larger companies to report ethnicity and disability pay gaps.

3. Ending One-Sided Flexibility

For workers on zero-hours contracts or minimal guaranteed hours:

• They can request contracts with guaranteed hours that reflect their actual working patterns.
• Changes will protect workers from unfair dismissal during probationary periods.
• Businesses will see capped compensation awards for dismissal disputes during probation periods to balance worker rights with employer concerns.

These protections aim to make the labour market fairer while reducing exploitative practices.

4. Family-Friendly Policies

Supporting work-life balance is a central pillar of the plan. Reforms include:

• Expanding flexible working rights.
• Introducing carer’s leave and enhancing parental leave.
• Strengthening protections for pregnant women and new mothers returning to work.

The government is also reviewing the current parental leave system and seeking ways to improve support for carers.

Equality and Workplace Standards

The government is committed to promoting equality in the workplace by:

• Implementing a regulatory and enforcement unit for equal pay.
• Strengthening protections for pregnant employees, especially during the six months after their return to work.
• Supporting disabled employees through joined-up employment and health initiatives.
• Introducing the Fair Work Agency to consolidate enforcement efforts and holiday pay compliance.

A new Equality (Race and Disability) Bill is expected later this parliamentary session to support these changes.

Long-Term Plans

Beyond the immediate proposals, the government is considering broader reforms, including:

• A single worker status to distinguish between employees and the genuinely self-employed.
• Strengthened protections for the self-employed, including written contracts and updated health and safety regulations.

Implications for Businesses

While these reforms aim to create a more secure, productive workforce, businesses may face increased costs and compliance requirements. Employers are advised to monitor the developments closely and prepare for upcoming changes.

The government has stated that it will consult with businesses to minimise potential negative impacts and ensure clarity around new rules.

Conclusion

The Labour government’s Make Work Pay plan represents a significant shift in the UK’s approach to employment, worker rights, and business practices. With a focus on flexibility, fairness, and equality, these reforms aim to boost productivity and economic growth.

However, businesses will need time to adapt, and the government plans to phase in changes gradually, with major reforms taking effect from 2026 onwards.

If you would like to discuss how these changes could impact your business, feel free to contact us for support and guidance.

For further details, visit the government’s policy paper: Next Steps to Make Work Pay.

Help for the High Street: New Powers for Councils

From 2 December, councils across England will gain new powers to revitalise high streets by addressing long-term empty shops. The introduction of High Street Rental Auctions (HSRAs) aims to combat the issue of vacant commercial properties, which often contribute to the decline of once-thriving town centres.

What Are High Street Rental Auctions (HSRAs)?

HSRAs give local councils the authority to auction leases for persistently vacant commercial properties. Here’s how they work:

• If a property remains empty for more than 365 days within a two-year period, councils can intervene.
• Local authorities will first attempt to engage with landlords to address the vacancy.
• If no resolution is reached, councils can auction leases for up to five years to bring new businesses or community groups into the space.

This initiative is designed to discourage landlords from leaving properties vacant and help breathe new life into high streets.

Why Are HSRAs Being Introduced?

The government has identified the growing number of empty shops as a key issue. According to official data, one in seven high street shops is currently closed. These vacant properties not only impact the economy but also create a sense of neglect in communities.

Local Growth Minister Alex Norris highlighted the significance of high streets, calling them the “beating heart of our communities.” He stated that the new powers prioritise local communities, aiming to re-energise town centres and boost economic growth.

Benefits for High Streets

HSRAs are expected to:

• Boost job creation: By attracting new businesses, empty properties can become hubs of activity and employment.
• Increase foot traffic: Revitalised high streets are likely to draw more visitors, benefiting nearby businesses.
• Support community initiatives: Community groups may gain access to affordable spaces, fostering local engagement.

Additional Government Support for High Streets

In addition to HSRAs, the government has announced further measures to support high street businesses:

1. Business Rates Relief
   • The small business rates multiplier will remain frozen for 2024.
   • Business rates for retail, hospitality, and leisure properties will be permanently lowered, offering relief to high street businesses.
2. Funding for SMEs
   • A £250 million commitment has been made for 2025-26 under the British Business Bank’s small business loans programme.
3. Small Business Strategy
   • A new Small Business Strategy will be published next year, focusing on supporting SMEs, with high street businesses at the core of its agenda.

Conclusion

The new powers granted to councils through HSRAs, combined with government initiatives like business rates relief and SME funding, aim to breathe new life into struggling high streets. These measures are designed to create opportunities for businesses and communities, fostering economic growth and making town centres vibrant once again.

If you own or manage a business on the high street, now is the time to prepare for these changes. To learn more or discuss how these updates may benefit your business, feel free to contact us.

For more details, visit: High Streets to Be Revitalised with New Legal Powers.

VOA to Improve Transparency on Business Rates Valuations with Upcoming Reforms

The Valuation Office Agency (VOA) has announced significant changes to increase transparency in business rates valuations. Starting in 2026, businesses across England will gain access to more detailed information about how their properties are valued. By 2029, they will also be able to view specific valuation details and evidence related to their assessments.

Increased Transparency for Ratepayers

Carolyn Bartlett, Chief Strategy and Transformation Officer at the VOA, stated that the reforms aim to balance transparency with data confidentiality. She said:

“We’ve balanced the desire for greater transparency from some with the concerns of others about the confidentiality of their data.“

The reforms will make it easier for ratepayers to detect and challenge errors in their property valuations, ultimately increasing trust in the system.

Business Rates Reforms: What’s Changing?

The transparency improvements are part of a broader reform programme for business rates, which will roll out between 2026 and 2029.

New Duty to Provide Property Information

A key change is the introduction of a new duty on ratepayers to provide property information to the VOA.

• Phased Testing: This requirement will begin testing in April 2026.
• Mandatory Reporting: By April 2029, it will be compulsory for ratepayers to report specific changes within 60 days, such as:
  • New occupiers.
  • Rent adjustments.
  • Physical alterations to the property.

Annual Reporting

Some businesses will need to submit trade information annually, which will be used in property valuations. Additionally, all ratepayers will need to confirm annually that any property changes have been reported to the VOA.

What Does This Mean for Businesses?

For businesses, these reforms represent a shift towards a more active role in ensuring their valuations are accurate. While no immediate action is required, the VOA has confirmed that they will notify businesses directly about when these changes will apply to them.

By providing tailored and detailed information, businesses will have greater confidence in the fairness of their valuations and the ability to challenge discrepancies when needed.

Conclusion

The VOA’s reforms aim to enhance transparency and fairness in the business rates system, helping businesses better understand and engage with their property valuations. These changes, combined with the new reporting requirements, mark a significant step in modernising the system.

To stay informed, businesses should monitor communications from the VOA and prepare for the new requirements as they are phased in.

For more details, visit: Sharing More Information on Business Rates Valuations.

Employer Banned for Hiring Illegal Workers: The Importance of Right-to-Work Checks

A recent case involving a former company director highlights the critical need for employers to verify their employees’ right to work in the UK. Edris Ali, 39, who previously owned a pizza restaurant and a car wash, has been banned from serving as a company director for ten years after employing six illegal workers from Iran, Sudan, and Côte d’Ivoire.

The Case

Immigration Enforcement visits uncovered:

• Two illegal workers at Tasty Pizza in Hartlepool.
• Four illegal workers at Bubbles Car Valeting in Guisborough.

As a result of these violations:

• The businesses were fined £20,000 and £60,000, respectively.
• Ali received a ten-year disqualification from being a director.

This case underscores the financial, legal, and reputational risks of failing to comply with right-to-work laws.

Key Takeaway for Employers

The High Court ruling serves as a stark reminder for all employers to:

1. Verify Right-to-Work Status:
2. Employers must ensure that every employee has the legal right to work in the UK before their employment begins.
3. Follow Home Office Guidance:
4. The Home Office provides a detailed Right to Work Check Guide, last updated in September 2024. This guidance outlines the process, including when and how checks should be conducted.
5. Avoid Severe Penalties:
6. If proper checks are completed and documented, businesses are protected from penalties—even if it is later discovered that an employee was not authorised to work.

Consequences of Non-Compliance

Failure to conduct right-to-work checks can result in:

• Hefty Fines: Up to £20,000 per illegal worker.
• Legal Action: Including bans on holding company directorships.
• Reputational Damage: Losing public trust and business credibility.

Protect Your Business

Employers should:

• Familiarise themselves with the Home Office guidance.
• Implement a clear process for verifying the right-to-work status of all employees.
• Stay up to date on legal requirements, as regulations are subject to change.

By taking these steps, businesses can avoid costly mistakes and maintain compliance with UK employment laws.

For more on this case, see the High Court ruling.

Reduction in HMRC Late Payment Interest Rates

Following the Bank of England’s decision to lower the base rate from 5% to 4.75%, HM Revenue and Customs (HMRC) has announced corresponding reductions to their late payment and repayment interest rates.

Updated Interest Rates

• Late Payment Interest:
  • Calculated at base rate + 2.5%.
  • Will now decrease to 7.25%.
• Repayment Interest:
  • Calculated at base rate – 1%, with a minimum rate of 0.5%.
  • Will now reduce to 3.75%.

Key Dates

The new rates take effect from:

• 18 November 2024 for quarterly instalment payments.
• 26 November 2024 for non-quarterly instalment payments.

Why the Change?

HMRC interest rates are directly linked to the Bank of England base rate. When the base rate changes, HMRC adjusts its rates to reflect the cost of borrowing or refunding overpaid taxes.

What This Means for You

• If you owe tax: You’ll now pay a slightly lower interest rate on overdue amounts.
• If you’re due a tax refund: The repayment interest rate will also be lower.

It’s always advisable to settle tax liabilities on time to avoid interest charges. For refunds, ensure your records are up to date to receive any overpayments promptly.

For more details, visit the official announcement: HMRC Interest Rates Update.