If you run a business here in County Durham – or anywhere across the UK – you’ve likely heard the chatter about the upcoming rise in the national minimum wage (NMW) and national living wage (NLW) for the 2025/26 tax year. It’s set to give many employees a bigger pay packet, but it also means more responsibility for those of us doing the hiring. And we reckon the minimum wage rising is a big deal worth talking about!
We’re an accountancy firm with big dreams, and we’re proud to help local businesses not just stay out of bother with HMRC, but also thrive. So, let’s talk about these new wage rates, why they matter (beyond the obvious) and how your team can benefit.
The new rates for 2025/26
As of April 2025, these are the proposed minimum pay levels you’ll be expected to follow (based on official guidance we’ve seen projected from government sources). Remember, the NLW is now for workers aged 23 and over.
- National living wage (23+): £12.21 per hour
- 18-20 year old rate: £10.00 per hour
- 16-17 year old rate: £7.55 per hour
- Apprentice rate: £7.55 per hour
You can keep an eye on the HMRC website for all the latest updates. There’s also guidance from the Low Pay Commission, which makes recommendations to the government on what the rates should be.
Why the rise matters for your business
A bigger wage bill might feel like an extra cost you’d rather not handle. But we see a lot of local firms turning this into a real advantage. First off, paying a proper wage can help keep your staff happy. When folks feel valued, they’re more likely to stick around, put in the effort and speak well of your business.
And if you’re aiming to grow (like we are!), investing in people is vital. It shows you’re serious about building a reputation as a decent employer. That can lead to positive word of mouth in our corner of the North East and beyond.
Staying on the right side of the law
We know compliance can feel like a pain. But ignoring the new wage rules is worse: HMRC doesn’t go easy on businesses that don’t pay the proper rates. Even if you’ve made an honest mistake, you could face penalties. If you’re ever unsure, pop along to the official gov.uk checklists to make sure you’re paying at least what you owe.
And don’t forget, if you employ apprentices, they have their own rate. You need to keep a close eye on birthdays and training schedules, since an apprentice’s pay can change when they move from one rate to another.
Getting your team on board
Talk to your employees ahead of April, especially if you think their pay might change. Give them a heads-up on what they can expect. In our experience, this sort of open conversation makes for a happier workplace. There’s nowt worse than a staff member finding out from someone else and feeling like they’ve been kept in the dark.
We’ve seen businesses that announce wage rises in team meetings – followed by an open Q&A. That way, there’s no confusion and your employees get a chance to ask about any pay-related topics, like holiday pay or overtime. Remember, you’ll be on the hook for holiday pay that reflects these new hourly rates as well.
Keeping an eye on your cashflow
We know times can be tight, especially for smaller outfits. Increasing wages might squeeze your profit margins if you’re not prepared. That’s why we think forecasting is essential. Take a good look at your accounts and project a few months ahead. If you need a hand with that, our team at For The Trade can help. We’ll look at your revenues, overheads and anything else that might affect your cashflow.
Make sure you also factor in changes to national insurance contributions or pension obligations. These can shift from year to year, so a good budget forecast will prepare you for any bumps in the road.
Potential knock-on effects
It’s not just about paying the new minimum rates. Some businesses like to maintain a pay gap between different roles to reflect experience or seniority. If that’s you, consider whether you’ll need to raise wages for employees already earning above the minimum. You don’t want your seasoned staff to feel short-changed if the younger folks are now catching up.
We also find that when wages go up, staff are sometimes more interested in working fewer hours because they can earn roughly the same. On the flipside, some folks might want more hours to take advantage of the higher rate. So keep that in mind for shift scheduling.
Tapping into available support
The government often introduces support schemes for employers, especially in areas like apprenticeships or staff training. Check Companies House updates and the main gov.uk site for announcements on any credits or incentives. You’d be surprised what’s out there to help you manage higher staff costs.
We’re always keeping our ear to the ground for anything that might benefit local trades. If you’d like to see how we can sort out your books while you focus on your day-to-day operations, do pop over to our site again for a no-obligation chat.
Ready for the next step?
The minimum wage rise is more than an extra line on the payroll. It’s a chance to boost morale, show staff you appreciate them and stand out from other firms that might grumble about paying the new rates. From our experience, folks are loyal when they’re treated right – and that loyalty can mean the world to your growth plans.
So don’t just accept the new rates. Use them as a reason to review your processes, your staff training and your overall vision. And if you’re feeling unsure about any part of it, we’re happy to help clear things up with plain, friendly advice.
Want to make sure you’re set up for the minimum wage changes? Let’s chat about sorting your payroll, forecasting your cashflow and helping your business grow! Give us a shout through our site or ring us up and we’ll get it sorted together.