By hayley - This year brings some important updates you’ll want on your radar, like:
- Employer National Insurance Increase: The Secondary threshold has been cut from £9,00 per year to £5,000 for tax year 2025-2026, and employer NI rate has increased from 13.8% to 15%. All making employer cost rise
- Employment Allowance Increase: Although the Employers NI has increased, so has the Employment Allowance which lets eligible employers offset up to £10,500 (previously £5,000) against their employers NI for the tax year. Previously just for small employers but now open to all employers. This will help mitigate some of the rising Employers NI costs, especially for smaller businesses.
- Personal Allowance Freeze: The personal allowance remains at £12,570, meaning careful tax planning is still essential for maximising income and dividend strategies.
- Introducing Statutory Neonatal Care Pay (SNCP) : This statutory payment, which will operate along the lines of Statutory Maternity Pay and Statutory Paternity Pay, with a weekly rate of £187.18 (or 90% of average weekly earnings, whichever is lower), will allow parents to take up to 12 weeks off if their baby requires neonatal care.
- Small Employers Relief on the rise: This is a relief available for small employers to offset against their statutory payment liability. It includes all statutory payments except Statutory Sick Pay (still no relief on it I’m afraid). Previously small employers could get 103% reclaim on the amount of the statutory payment they gave to employees, this increases for tax year 2025-2026 to 108.5%
Fresh Start Tips for 2025/26
- Review Your Payroll and Employee Data
Ensure all employee records are updated: names, addresses, tax codes, benefits-in-kind. Errors here can create major headaches down the line.
- Check Your Software Compliance
Is your payroll, accounting, and HR software aligned with the latest HMRC updates? Check now to avoid any surprises.
- Revisit Your Budget and Forecasts
New tax thresholds mean new cost dynamics. Reforecast your salaries, employer pensions, and employer NI costs accordingly.
- Use the New Year for Strategic Planning
Tax year changes aren’t just administrative, they’re a chance to rethink growth strategies, hiring plans, and profitability goals.
- Get Professional Advice Early
A quick check-in with your payroll provider can catch issues early and help you capitalise on any new reliefs or allowances.
A New Chapter for Your Business
A new tax year is more than ticking boxes, it’s a chance to breathe fresh energy into your business finances. With a little preparation, 2025/26 can be a year of fewer surprises, better decisions, and stronger growth.
Here’s to smart moves, smooth payrolls, and success ahead! ????
Hayley