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.

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

The reporting threshold for trading income for self assessment is being lifted from £1,000 to £3,000 gross within this parliament, according to the Treasury.

This includes people trading clothes online, dog-walking or gardening on the side, driving a taxi, or creating content online.

The Treasury says this will benefit around 300,000 taxpayers who will no longer need to file a self assessment tax return.

An estimated 90,000 of them will have no tax to pay and no reason to report their trading income to HMRC in the future at all. Others will be able to pay any tax they owe through a new simple online service.

The changes are part of the government’s Plan for Change, which it says will drive forward efficiency reform.

James Murray, Exchequer Secretary to the Treasury, said:

‘From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit.

‘Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side-hustle.

‘We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets.’

Internet link: GOV.UK

The government’s employment reforms are causing employers to put their hiring plans on hold, according to the Institute of Directors (IoD).

The IoD noted that there was a small increase in payrolled employees in the latest Labour market data released by the Office for National Statistics (ONS).

Estimates for payrolled employees in the UK increased by 9,000 between December 2024 and January 2025, said the ONS.

However, the ONS data also showed static job vacancies and increase in the unemployment rate.

Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:

‘Our data shows that half of business leaders facing higher National Insurance bills plan to reduce employment in response, and that business hiring intentions over the next year remain around lows last seen at the height of the Covid-19 pandemic.

‘The government missed an opportunity at Report Stage of the Employment Rights Bill to show that it has listened to business feedback about how to avoid the reforms damaging employment prospects.

‘The government’s Better Regulation Action Plan is a welcome shift in narrative, but such commitments will ring hollow if the principles are not first applied to its plans to increase the regulation and cost associated with employing staff.’

Internet link: IoD ONS

Chancellor Rachel Reeves announced ‘no further tax increases’ in the 2025 Spring Statement.

The Chancellor’s Autumn Budget contained a record £40 billion in tax increases. However, it did not raise personal taxes including, Income Tax, employee National Insurance contributions or VAT.

Ms Reeves had pledged one fiscal event a year and confirmed that no taxes would be raised at the Spring Statement.

Instead, the Chancellor made a number of announcements on spending and economic forecasts.

The forecast from the Office for Budget Responsibility (OBR) halved the UK’s growth in 2025 from 2% to 1%.

However, Ms Reeves pointed out that the Organisation for Economic Co-operation and Development (OECD) downgraded this year’s growth forecast for every G7 economy.

The OBR forecasts show that inflation will average 3.2% this year before falling ‘rapidly’, meeting the Bank of England’s 2% target from 2027 onwards.

Ms Reeves said that defence spending will increase to 2.5% of GDP, by reducing overseas aid.

This means an extra £2.2 billion for the Ministry of Defence in the next financial year to address ‘increasing global uncertainty’.

The government will spend a minimum of 10% of the MoD’s equipment budget on innovative technology, boosting production in places such as Derby, Glasgow and Newport.

In addition, the Chancellor said that planning reforms will put the government ‘within touching distance’ of hitting its target of 1.5 million new homes over the course of this Parliament.

Ms Reeves said that this will increase the level of real GDP by 0.2% by 2029/30, adding £6.8 billion to the economy.

The Chancellor said:

‘Our task is to secure Britain’s future in a world that is changing before our eyes. The threat facing our continent was transformed when Putin invaded Ukraine. It has since escalated further and continues to evolve rapidly.

‘At the same time, the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.’

Internet link: GOV.UK

The reporting threshold for trading income for self assessment is being lifted from £1,000 to £3,000 gross within this parliament, according to the Treasury.

This includes people trading clothes online, dog-walking or gardening on the side, driving a taxi, or creating content online.

The Treasury says this will benefit around 300,000 taxpayers who will no longer need to file a self assessment tax return.

An estimated 90,000 of them will have no tax to pay and no reason to report their trading income to HMRC in the future at all. Others will be able to pay any tax they owe through a new simple online service.

The changes are part of the government’s Plan for Change, which it says will drive forward efficiency reform.

James Murray, Exchequer Secretary to the Treasury, said:

‘From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit.

‘Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side-hustle.

‘We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets.’

Internet link: GOV.UK