Last summer, research found that red tape was one of the biggest inhibitors to growth for small businesses, while another study revealed that legislation aimed at small businesses is costing the economy £41 billion.


And while it’s encouraging that the government has acknowledged this with the launch of the ‘Cutting Red Tape’ programme last year, it remains to be seen whether this will genuinely reduce the administrative burden or have the opposite effect. In the meantime, there are a number of new Acts coming in over the next twelve months that small businesses need to be aware of.

While some of these may benefit your staff or your business, others may just feel like unnecessary work. Unfortunately, whether we like it or not, compliance isn’t optional.

To try and make life a little easier, we’ve outlined some of the key changes coming in 2016, with tips on how to prepare for them:


National Living Wage

What’s happening:

As of April, all employers will be legally obliged to pay workers aged 25 and over the Living Wage of at least £7.20 per hour. The minimum wage still applies to employees below 25, and ranges from £3.30 to £6.70 per hour, depending on the age of the employee.

What you need to do:

If your staff aren’t currently receiving this rate, you will need to ensure that you take appropriate payroll action and inform them about the changes to their pay before the Spring deadline. HMRC provides some useful tips on how to do this.


Pensions Act

What’s happening:
Following the Pensions Act of 2008, every employer in the UK was provided with a set ‘staging date’ by which they must put staff into a pension scheme and begin contributing towards it. The scheme targeted large businesses initially, followed by small businesses and this year, half a million small and micro businesses will face their staging dates.

What you need to do:

First and foremost, make sure you know your staging date. You’ll need your PAYE reference to find out. Depending on your situation, such as how many people you employ, your duties to your employees may vary. The Pensions Regulator publishes a useful Duties Checker that provides tailored information on this – again, you’ll need your PAYE reference to access this. Once you have a clear view of your duties, you can start investigating a pension scheme. The Pensions Regulator recommends you do this at least six months before your staging date as it can take a long time to process.


Small Business, Enterprise and Employment Act

What’s happening:
This Act is intended to make UK business more transparent and trustworthy by improving the quality of information that firms file with Companies House. This includes the introduction of a new statutory register of Identifiable Persons with Significant Control (PSC), coming in this April. This is a formal record of all people who own more than 25% of your company’s shares or voting rights, or who have significant influence or control over your business.

What you need to do:

Every business in the UK must identify a PSC by April and keep a register that lists information such as the PSC’s nationality, date of birth and date that they became a PSC. This information will then need to be filed with Companies House through its annual check and confirm process, which will be replacing the annual return as of June 2016.


While these are the key new rules to be aware of over the next few months other changes such as the digital tax system are coming down the line. Like so much new legislation, this comes with good intentions to make life easier for business owners, but still demands the time and headspace to apply yet another set of rules. What’s more, each change has the potential to disproportionately affect some businesses over others. For anyone looking for extra support, Companies House, HMRC and the Pensions Register all offer useful resources.


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