So much legislation results in businesses feeling confused by complex changes and amendments. This in turn leads to uncertainty impacting on how they deliver on their strategies, their productivity and growth.  At the same time, as legal requirements change as your business grows, you can find yourself struggling to keep up to date.

Heading into 2025, these are some of the regulatory changes it’s worth having on your radar as a startup founder.

Transforming employment rights – We’ll start big. The Government’s comprehensive Employment Rights Bill is expected to come into play in 2026, so now is the time to get your policies in shape. The Bill will ban exploitative zero-hours contracts, end fire and rehire, and introduce day one employment rights – from paternity and parental leave through to protection from unfair dismissal. This is an opportunity for startups to build these people-first policies into their cultures and workplaces.

Employer NICs – Employer NICs are set to increase from 13.8% to 15% from April 2025. For startups, this has created uncertainty around hiring and talent strategies, as the incoming government proves to be less business-friendly than hoped. Smaller businesses and startups already overwhelmed with increased red tape will be particularly affected by NI increases. 

Technology, GenAI and Data Use – Despite the UK government’s “pro-innovation” stance, expect to see a huge onslaught of new legislation which will affect tech and digital startups, including those providing IoT devices and using AI. This includes legal challenges for product development and IP ownership, additional hurdles when selling to consumers, as well as challenges for the major social media platforms and tech giants. Whilst these are primarily aimed at tech giants like as Apple, Google, and Meta, there may well be impacts for smaller startups reliant on these companies for their business and of course, GenAI is something that will be used by businesses of all sizes.

The Data Use and Access Bill, on the surface aims to simplify regulations around data processing, promoting ethical and responsible use of data by organisations.  However, the changes do not reduce the administrative compliance burden as much as might have been hoped by businesses. With the ICO set to gain enhanced powers to support this, higher expectations around compliance together with more enforcement, and more incoming regulation is likely.

ESG changes – As a law firm, we’re finding more and more companies asking us about ESG - how to bring in more policies around it, how to ensure that they’re compliant and on track to meet sustainability standards in line with the UK's  2050 net zero commitment. For startups there’s also the huge driver of procurement as larger corporations expect suppliers to meet their ever-increasing ESG criteria. , whereas for small businesses, it’s another thing to worry about. 

Startup investment schemes – Originally set to end 6 April 2025, the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes have now been extended by ten years to 5 April 2035. Widely considered two of the government’s leading investment schemes, this extension is set to benefit thousands of entrepreneurs and startups, particularly those seeking early-stage investment. Vitally, it also supports a culture more broadly supportive of startups, innovation, and growth.

As a founder, legislation can be hard to navigate and pull you away from your day job.  The earlier in the development of your business that you understand and get to grips with the applicable legislation the easier and more cost effective it will be to design your business to ensure compliance.  By staying ahead of incoming changes though, you can build change into your business, ensuring your business is best placed to succeed.

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