Employment Allowance update
In the Autumn 2024 Budget, the Chancellor announced that the Employment Allowance will increase to £10,500 from 6 April 2025. Additionally, the restriction that limited eligibility to employers whose previous annual NICs bill was below £100,000 will be removed. All other eligibility criteria remain unchanged.
In December 2024, HMRC confirmed that from 6 April 2025, the Employment Allowance will no longer count as de minimis state aid.
Statutory Neonatal Care Leave and pay update
A new statutory right (see attached document) to Neonatal Care Leave and Pay will come into effect from 6 April 2025, offering enhanced support to parents whose new-borns require neonatal care. This entitlement provides up to 12 weeks of paid leave in addition to existing parental leave rights.
Eligibility
- Applies to parents of babies admitted into neonatal care within the first 28 days from birth
- The care must last for at least seven continuous days
- Available in Great Britain only
What qualifies as Neonatal Care?
The legislation defines neonatal care as:
- Hospital-based medical care
- Palliative (end-of-life) care
Outreach care, provided that:
- The care began when the baby was discharged from hospital
- A consultant directs the care
- The hospital arranges ongoing monitoring by healthcare professionals
Leave and pay entitlement
- Each parent can take up to 12 weeks of leave
- This entitlement applies regardless of multiple births or multiple admissions
- The leave must be taken in blocks of at least one week
- Must be used within 68 weeks of the child’s birth
Statutory Neonatal Care Pay (SNCP)
The weekly rate for the 2025-26 tax year will be the lower of £187.18 or 90% of the employee’s Average Weekly Earnings. Employers can reclaim a proportion of Statutory Neonatal Care Pay, similar to other statutory payments. Employees on neonatal care leave are protected from discrimination, detriment, and dismissal and will continue to accrue annual leave and pay increases.
Next steps for employers
Minimum wage changes for 2025-2026
| Age | 2024/25 | 2025/26 | % Increase |
| 21 and over (NLW) | £11.44 | £12.21 | 6.7% |
| 18 - 20 | £8.60 | £10.00 | 16.3% |
| 16 -17 | £6.40 | £7.55 | 18% |
| Apprentice | £6.40 | £7.55 | 18% |
Employers should prepare for these legislative changes by:
- Reviewing HR policies to ensure compliance with the new leave entitlements
- Informing employees of their new rights and updating parental leave guidance