2.    New Immigration Changes: What Businesses Need to Know

The government recently announced major changes to the immigration system as part of its plan to reduce net migration and encourage more home-grown skills. If you run a business, even if you don’t currently recruit from overseas, it’s worth understanding what’s changing and how it could affect your future hiring plans.

Here are the key points and what they might mean for your business.

Hiring from overseas will get harder

If your business sponsors skilled workers from outside the UK - or you’ve considered doing so - it’s about to become more difficult and more expensive.

• The definition of a 'skilled worker' is being tightened. Roles will now need to be at graduate level or above to qualify and the minimum salary levels will go up.
  
  
• A special list that allowed some roles to be hired at lower salaries is being scrapped.
  
  
• From now on, only jobs facing long-term shortages - and where there’s a plan to train UK workers - will be allowed to bring in overseas staff.
  
  

In short, unless the role is highly skilled and in short supply, filling it through immigration is likely to become a challenge.

No more social care recruitment from overseas

If you run a care business or provide care services, this one is especially important. The government plans to stop new overseas recruitment for social care roles. Those already here on care visas can stay for now, but no new applications will be allowed. This change will be phased in by 2028, but it’s a clear signal that care businesses need to start planning for UK-based recruitment now.

There may be more pressure to train locally

The government has said the measures will include new requirements to boost domestic training.

Fewer international graduates staying after their studies

If you employ graduates, the government is planning to reduce the ability for graduates to remain in the UK after their studies to a period of 18 months. Universities will also face stricter rules for sponsoring students.

This may mean fewer international graduates entering the local job market, something to keep in mind if your business has hired from this group in the past.

Support for high-growth, high-skill businesses

On a more positive note, if your business is in a science, tech, or design-related field, you may benefit from plans to make it easier for top global talent to come to the UK.

What can businesses do now?

Even if your business doesn’t hire from abroad, these changes are part of a wider shift in how recruitment and workforce planning will work in the UK. Here’s what you might consider:

• Think local: Look at how you can train, promote or support current staff before looking externally.
  
  
• Review your hiring plans: If you’re growing your team, consider the impact of fewer overseas candidates and a more competitive domestic market.
  
  
• Keep an eye on updates: These changes will roll out over the coming months and years, so it’s worth keeping informed.



3.    It’s P11D season! 

P11D forms for reporting expenses and benefits in kind provided to employees and directors in 2024/25 need to be submitted by 6 July 2025. The return must be made online using PAYE Online for employers or commercial software.

Remember that reimbursed expenses no longer need to be reported where they are incurred wholly, exclusively and necessarily in the performance of the employee's duties.

Trivial benefits provided to employees that do not exceed £50 do not need to be reported. This typically covers non-cash gifts to employees at Christmas and on their birthdays, and can include gifts of food and alcohol. Again, the employer needs to keep a record of the benefit provided and the justification. It should not be provided as a reward for past or future service.



4.   Official Rate of Interest

For employers reporting beneficial loans and some employment related living accommodation on form P11D for 2024/25, the official rate of interest (ORI) to be used is 2.25%. The charge applies where the amount of the loan exceeds £10,000.

The ORI increased to 3.75% on 6 April 2025. From 2025/26 onwards, the rate will be reviewed on a quarterly basis with any changes in the rate occurring following a quarterly review, where appropriate. If there are any in-year changes to the rate, these will take effect on 6 July, 6 October and 6 January.

5. FSB Updates Guidance on Employers’ Liability Insurance

The Federation of Small Businesses (FSB) has recently updated its guidance on Employers’ Liability insurance - a useful reminder of the rules and risks around a business insurance that is legally required in the UK.

The guidance explains that if you employ anyone - including part-time, temporary, or even volunteer staff - you are likely required by law to have this cover in place. It’s there to protect businesses should an employee become ill or injured because of their work and the employer is found legally responsible.

What the FSB Highlights

The updated guidance gives practical examples of when this insurance might apply, such as:

• A worker being injured while using machinery
• An office employee developing repetitive strain injury
• A fall on a construction site leading to time off work

The costs of such claims can be significant. As the FSB notes, legal fees and compensation payments can run into tens of thousands of pounds, potentially enough to put a small business under real pressure.

The guidance also clarifies:

• The legal minimum cover is £5 million (though most insurers offer £10 million as standard)
• Fines can reach £2,500 per day if a business is found not to have the required cover
• The insurance certificate must be displayed or made accessible to staff – failure to do so can result in a £1,000 fine

Exemptions and Edge Cases

The FSB outlines a few cases where the cover may not be required: for example, some family businesses or sole traders without staff. But these are quite limited and the guidance suggests most businesses with paid staff will need the insurance.

Worth Reviewing

The FSB guidance could serve as a useful prompt for you to review your insurance arrangements, particularly if your staffing or business structure has changed recently.



Edited by - Peter Burns - Senior Client Manager at England & Company