UK law changes: What small business owners need to know
Recent UK Business Law Changes: What Small Business Owners Need to Know
Running a small business in the UK is challenging enough without the added pressure of keeping up with legal changes. But staying informed can save you from costly fines, compliance issues, and unexpected legal headaches. Over the past year, several key business law updates have come into effect that small business owners and managers need to be aware of. Here’s what’s changed and how it might impact your business:
- New ID Verification Rules for Company Directors
Under the Economic Crime and Corporate Transparency Act (ECCTA) 2023, Companies House now requires all company directors, Persons with Significant Control (PSCs), and those submitting filings to verify their identity. This aims to tackle fraud and increase business transparency.
What this means for small businesses: If you’re a sole trader registering as a limited company or managing an SME, you’ll need to complete this verification process to remain compliant. Failure to do so could result in penalties or delays in company filings.
- Stronger Employee Rights & Fair Work Agency Introduction
The government has launched a new Fair Work Agency, which has the power to bring employment tribunal claims on behalf of workers. Additionally, new laws require employers to offer guaranteed working hours and fair pay. However, businesses can opt out if they have a collective agreement with a trade union.
What this means for small businesses: If you employ staff on zero-hour contracts, you may need to rethink your employment policies to ensure compliance with new fair work standards.
- Registered Office and Email Address Requirements
Small business owners operating through limited companies must now provide a registered office address and a valid email address to Companies House. This is part of efforts to improve business legitimacy and communication.
What this means for small businesses: If you run a home-based business, you may need to register a separate office address to comply with these changes.
- Increase in Minimum Wage and National Insurance Contribution Changes
From April 2024, the National Minimum Wage increased, meaning businesses must ensure they’re paying employees the correct rates. Additionally, employer National Insurance contributions have been adjusted, affecting payroll costs.
What this means for small businesses: If you employ staff, check the latest minimum wage rates and review your payroll to account for the increased costs. Failure to comply with wage laws can lead to penalties.
- Impact of Windfall Tax Changes on Small Businesses in Energy and Manufacturing
The UK government plans to reform the windfall tax on oil and gas producers, encouraging the transition to a greener economy. While this mainly impacts large energy firms, supply chain businesses, manufacturers, and contractors working in the energy sector should stay updated on these changes.
What this means for small businesses: If your business operates in manufacturing, construction, or services related to energy, be prepared for potential price shifts and policy adjustments.
How to Stay Compliant…
To protect your business from legal risks, take the following steps:
- Review company policies and contracts to ensure compliance with new employment and corporate transparency laws.
- Ensure payroll accuracy by updating staff wages and reviewing National Insurance contributions.
- Verify your company details with Companies House to meet new ID and registered office requirements.
- Seek legal advice if unsure about how these changes affect your business operations.
By staying informed and proactive, small business owners can avoid legal pitfalls and keep their operations running smoothly in 2024 and beyond.
