Corporate

Business owners and HR managers may be aware of the significant change to anti-harassment law which happened on 26^th October 2024 signalling a zero-tolerance approach to harassment in the workplace. Here are three top tips from HM3 Legal to protect your business and empower your workforce.

Who does the legal change apply to?

The change applies to all businesses in England and Wales, without exception. If you have 1 or 10,000 employees, you’re affected. If you’re a producer or supplier, you’re also affected. It is now your legal duty to update employees about this important legal change so they know how it will affect them.

Three actions you can take now

1. Review your policies and procedures to prevent workplace harassment. Will they stand up to a potential claim being made? The new law is likely to require more than merely updating written documents – specific employee training may be needed to raise awareness and change behaviours.
2. Would the processes you have in place pass the ‘reasonable’ test? All employers must address unacceptable behaviour and provide proof of reasonable steps taken to stamp out workplace harassment. There is no opt-out to taking action.
3. Do your employees know the legal difference between harassment, bullying and banter? Can you provide all-important proof that your business is taking the new law seriously? If not, it may be time for your HR team and line managers to find ways to train employees about anti-harassment and diversity, equality and inclusion.

Why change and why now?

The legal change is due to an increase in claims being brought (the new law also allows a Judge to add 25% to an award if a business cannot prove it has taken ‘reasonable steps’ to prevent workplace harassment). The update aims to provide supportive and safer working environments where employees can feel better protected – including stamping out harassment by third parties associated with work.

This brief video from HM3 Legal here provides further tips.

As well as strengthening the law, this change aims to promote positive working cultures important for health and wellbeing. Additional benefits of psychological safety include fostering loyalty and employee engagement.

Analysis by James Clark – Tax partner at WR Partners

In the lead-up to her first Budget speech, Chancellor Rachel Reeves cautioned that it would be a painful Budget, with those bearing the broadest shoulders shouldering the greatest burden. It seems businesses and business owners will feel the impact most.

Whilst some of the tax increases announced today were expected, the severity of them were perhaps not.

Employer National Insurance

As rumoured before the Budget, there will be an increase in the rate of National Insurance paid by employers, rising from 13.8% to 15% from April 2025. To make matters worse, the threshold at which employers pay the tax will reduce from £9,100 to £5,000.

There was some good news for small employers though, with the announcement that the Employment Allowance (the 0% band) will increase from £5,000 to £10,500. This, the Government say, will allow small businesses to employ four workers on minimum wage without an increase to their national insurance bill.

The National Minimum Wage will be increased to £12.12 for employees aged 21 and over, and to £10.00 for under 21’s.

Inheritance Tax

It was anticipated that the rates, allowances or thresholds of inheritance tax would change, but the Chancellor kept the rate at 40% and kept the tax free amount at £325,000. She even kept the £175,000 residence allowance in place that was brought in by the previous Government.

Now for the difficult news: Until now, business owners and farmers have been shielded from inheritance tax on their business and agricultural assets. However, starting in April 2026, this protection will change. From that point forward, only the first £1 million in combined business and agricultural assets will be exempt from IHT, while the remaining value will receive just 50% relief—effectively taxing these assets at 20%. This marks the end of passing on a business or agricultural interest to the next generation without potential tax implications.

The Government will, however, introduce legislation to extend the scope of Agricultural Relief to environmental land management from 6 April 2025.

In a more worrying announcement, the Chancellor announced there will be a consultation to bring unused pension pots into the scope of inheritance tax from April 2027.

There was also an announcement that 100% IHT relief for shares on the AIM and similar markets would reduce to 50%.

Capital Gains Tax

Probably the least best kept secret was the increase to capital gains tax rates, but the increase was not quite as bad as feared. The rates for residential property sales were maintained at 18% (for basic rate taxpayers) & 24% (for higher rate taxpayers), and now all other asset classes will rise to the same levels effective from 30 October 2024. Most people expected CGT rates to increase in line with income tax rates, so this announcement was a bit of an anti-climax.

The CGT rates for entrepreneurs will increase from their current flat rate of 10%, rising to 14% from April 2025 and then up to 18% from 2026. These rates apply to the lifetime limit of qualifying gains which was kept at £1million.

Stamp Duty

Whilst the CGT rates on sales of residential property were not increased, the rates of stamp duty when buying a second home or investment property are being increased by 2% with immediate effect.

Income Tax & NI

In the Labour Government manifesto they promised not to increase income tax and national insurance, which they duly kept to, however they went one step further and announced that they will not extend the freeze to thresholds beyond 2028. Therefore allowances and thresholds will rise with inflation from that point.

Company Car Tax

To give taxpayers more certainty, the Government has announced the company car tax rates for 2028/29 and 2029/30. These show that electric vehicles will see a 2% per year increase in the benefit in kind rate, rising to 9% by 2029/30. Considering only a few years ago the rate was 0%, this represents a large increase for those driving zero emission vehicles.

How we can help

If you have any questions or concerns about the recent budget, please get in touch with our team on 01686 611830 or email hello@wrpartners.co.uk

As part of our commitment as Bolesworth’s Accountancy Partner, we are pleased to offer you a complimentary 30 minute discovery call. This exclusive session is your opportunity to collaborate with one of our specialists for a thorough review of your business.

During this session, our expert team will work with you to assess your current position, uncover potential opportunities and provide guidance tailored to your long term goals.