The 2025/26 tax year brings some of the most significant payroll compliance changes in recent years. With updates spanning National Insurance contributions, minimum wage laws, and real-time reporting, accounting firms must prepare early to remain compliant themselves and help their clients do the same.
For UK accounting firms managing payroll for multiple clients, staying ahead of these developments is not just a regulatory responsibility but a strategic advantage. As an accounting outsourcing agency, Stellaripe supports accounting firms by managing these updates efficiently in the background.
With our expertise, your payroll operations remain smooth, compliant, and future-ready. Read on to explore the key changes your firm and clients need to prepare for.
Rising employer NIC costs: Navigating new rates and thresholds
One of the most notable changes for the 2025/26 tax year is the increase in the employer National Insurance Contribution (NIC) rate to 15%, up from 13.8%. This represents a significant cost shift for businesses, especially those with large workforces.
In addition, the Secondary Threshold, the point at which employers start paying NICs for employees, has dropped to £5,000. This lower threshold means many businesses will be liable for NICs on employee earnings sooner than before.
What your firm should do:
- Update clients now about the increased NIC rate and lower threshold so they can plan for rising payroll costs.
- Review Employment Allowance eligibility with each client as more businesses now qualify, offering up to £5,000 in savings.
- Recommend salary sacrifice arrangements that can help reduce NIC liabilities while still delivering value to employees.
Employment allowance expansion: New opportunities for your clients
The Employment Allowance has increased to £10,500, and the removal of the £100,000 NIC liability cap means more clients of yours may now be eligible. This change offers valuable savings on employer NICs but only if claims are made correctly.
What your firm should do:
- Check eligibility for each client under the updated criteria to ensure no opportunity is missed.
- Submit accurate claims at the start of the tax year using your payroll software of choice.
- Monitor allowance usage throughout the year to prevent errors that could raise flags during HMRC audits.
- Keep clients informed of their allowance position and potential benefits, reinforcing your value as a trusted adviser.
Minimum wage reforms 2025: Preparing your payroll infrastructure
As of April 2025, the National Minimum Wage (NMW) has increased. For 18- to 20-year-olds, the hourly rate has risen from £8.60 to £10. Workers aged 16 and 17 now earn £7.55 per hour, up from £6.40, an 18% increase. The National Living Wage for those aged 21 and over has gone up from £11.44 to £12.21.
These adjustments are having a significant impact on industries such as retail and hospitality, where many employees are on minimum wage.
What your firm should do:
- Ensure payroll systems are promptly updated to reflect the new wage rates.
- Double-check that salary sacrifice arrangements do not result in pay dropping below the minimum wage threshold.
- Assist employers in reviewing and updating contracts to comply with the revised wage rates.
Neonatal care leave: Introducing a new layer of complexity
From 6 April 2025, neonatal care leave and pay will become a statutory right for eligible employees. This new entitlement provides paid time off for parents whose newborns need neonatal care, offering essential support during a challenging time.
What your firm should do:
- Ensure clients’ payroll systems are set up to handle neonatal pay correctly from day one.
- Collaborate with HR teams to help update internal policies and employee communications.
- Advise clients on the potential financial and operational impact of this new entitlement.
Payrolling benefits-in-kind: Moving toward mandatory real-time taxation
HMRC will make payrolling Benefits-in-Kind (BIKs) mandatory from April 2026. While the 2025/26 year allows for voluntary adoption, early action can save your clients time, reduce compliance risks, and ease the transition.
Why your firm should encourage early adoption:
- Eliminates dependence on error-prone P11D submissions.
- Spreads tax liability for employees across the year, reducing year-end tax shocks.
- Allows clients to test systems, iron out issues, and prepare ahead of the legal mandate.
By integrating BIKs into payroll now, you not only reduce admin headaches for your clients but also show them you’re anticipating change, not just reacting to it.
Real-time tax code updates: Keeping pace with instant changes
HMRC is rolling out real-time tax code changes, which will take effect immediately after they’re issued. This offers a more accurate tax collection process but introduces new pressure on payroll systems and communication.
Key considerations for your clients (and your team):
- Ensure payroll software is agile and can apply tax code changes instantly.
- Prepare to help clients explain pay fluctuations to employees — proactive communication is critical.
- Stay vigilant for errors, as delays in updating could result in under- or overpayment penalties.
As an accounting firm, your role will increasingly involve real-time payroll oversight — and Stellaripe can support you with the right systems and expertise.
Transitioning to Digital PAYE: Preparing for the 2026 deadline
HMRC will no longer accept paper PAYE submissions from April 2026. Every employer must shift to digital-only payroll reporting, which means accounting firms must act now to future-proof their operations.
Steps your firm should take now:
- Audit your existing client payroll systems for digital readiness.
- Recommend or migrate clients to cloud-based, HMRC-compliant payroll software.
- Train your team to handle digital submissions and troubleshoot issues as they arise.
Helping your clients prepare early means fewer last-minute scrambles and positions your firm as a proactive, digitally mature partner.
Getting ready for 2025/26: Key tips for payroll professionals
To help your clients stay compliant and avoid disruption, consider these proactive measures ahead of the new payroll year:
- Audit payroll setups: Assess how upcoming changes will influence each client’s cost base and payroll obligations.
- Ensure software readiness: Make sure payroll platforms can accommodate new statutory rates, NIC thresholds, and allowances.
- Engage clients early: Start conversations now to explain the impact of the changes and offer strategic guidance.
- Keep up with developments: Regularly check for HMRC announcements and participate in training sessions or webinars.
- Recommend smart tools: Opt for payroll software that automates compliance. It will help firms avoid errors and save time.
Why should you outsource your payroll to Stellaripe?
Keeping pace with payroll legislation isn’t easy — especially when you’re managing multiple clients and regulations are constantly changing. That’s where Stellaripe supports your firm. We take the pressure off by ensuring your clients’ payrolls remain accurate, compliant, and fully up to date.
When you outsource to Stellaripe, you’re not just delegating payroll tasks — you’re gaining a reliable partner who understands the importance of getting it right every single time. Our team monitors regulatory changes, updates systems proactively, and resolves potential issues before they impact your clients.
With Stellaripe handling your payroll, your team can focus on higher-value advisory work, strengthening client relationships, and scaling your practice — knowing that every payslip, submission, and update is in expert hands.
Conclusion
The 2025/26 tax year introduces major payroll changes, including rising costs, real-time tax, and a digital shift. Staying compliant is no longer optional. Stellaripe helps accounting firms navigate these updates smoothly, ensuring payroll remains accurate, compliant, and stress-free. With us, payroll becomes a strategic asset, not a burden. Contact us today to get our services.
