What business law changes does 2025 promise in the UK?

Our Knowledge Lawyers highlight a range of legal developments of interest to businesses this year – from interesting case law clarifying areas of complexity to the progress of the new government's legislative programme after last summer's general election.

Artificial intelligence

UK AI Safety bill

The government intends to bring in new AI-specific legislation to "place requirements on those developing the most powerful AI models of tomorrow" and has signalled that measures will focus on AI safety. It is expected that a new bill will confine itself to regulating the development of the largest, cutting edge AI models, including making legally binding some existing voluntary commitments by leading AI companies, and changing the UK's existing AI Safety Institute to be arm's length from government.

While the timeframe is unclear, a decision is expected in 2025, most likely during the first half of the year. It will sit alongside the government's other planned AI-related measures, including AI-driven changes to copyright law (see below) and recommendations of the AI Opportunities Action Plan, which was published on 13 January (for more, see the Regulatory Outlook).

AI and IP

In December 2024, the UK government published its long-awaited consultation on AI and copyright, featuring a package of measures designed to accelerate growth in both AI sector and creative industries. With its proposed approach the government intends to empower AI developers with access to high-quality training material, simultaneously ensuring that rightsholders have greater control over their content and are fairly compensated for its use. See our Insight exploring the government's proposals in detail. The consultation is open until 25 February 2025.

The interplay between AI and IP will also be considered by the English courts when Getty Images v Stability AI comes to trial in June/July. This case relates to the use of Getty's image library to train the Stable Diffusion text-to-image model and concerns copyright, database right and trade mark infringement in the AI context.

The patentability of AI inventions will be on the Supreme Court's agenda this year in Emotional Perception. The Court of Appeal held that inventions involving artificial neural networks should be treated in the same way as any other computer implemented inventions and, therefore, they must make a technical contribution in order to be patentable. Will the Supreme Court take the same approach? This is an eagerly anticipated decision and should bring clarity to the issue.

EU AI Act

The EU's AI Act entered into force on 1 August 2024, and its provisions will be applicable progressively, starting in 2025.

The first will take effect on 2 February 2025, when certain AI practices will be prohibited outright. Next will come the provisions on general-purpose AI models, which cover foundation models including those underlying many generative AI systems, and will be applicable from 2 August 2025. By May this year we should see the final version of the General-Purpose AI Code of Practice which will provide crucial guidance on compliance with major aspects of the EU AI Act. See this Regulatory Outlook for an overview of the first draft of the code. Generally, see our Insight setting out the compliance deadlines for businesses.

Banking

Lending

Hague 2019

The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague 2019) enters into force in the UK on 1 July 2025. It extends the type of judgments that can be enforced under the existing Hague regime and, importantly, includes judgments issued pursuant to asymmetric jurisdiction clauses.

When in force, Hague 2019 will help to address a post-Brexit concern for lenders about the enforceability in the EU of English judgments issued pursuant to asymmetric jurisdiction clauses. For some time now, lenders have had to consider the merits of using exclusive jurisdiction clauses rather than the traditional asymmetric alternative, although asymmetric clauses never entirely lost their appeal as lenders continued to appreciate the one-sided flexibility they provide. They may be set to make a firm comeback once Hague 2019 is in force.

However, despite the welcome progress made pursuant to Hague 2019, there remains some uncertainty as to the enforceability of asymmetric clauses under the national laws of certain EU Member States, in particular France.

IBORs

2024 saw the end of synthetic LIBOR and the end of one, three and six month USD LIBOR, but we will still be talking about IBORs throughout 2025. The Loan Market Association has published exposure drafts designed to assist with implementing more robust fallbacks specifically to EURIBOR, but also to other interbank term rates. The package of documents includes:

• Guidance on LMA fallbacks to interbank term rates.

• Single currency euro exposure drafts with €STR-based fallbacks.

• Drafting for the ISDA/Bloomberg EURIBOR-€STR Spread Adjustment. 

Feedback on the exposure drafts should be submitted to the LMA by 25 February 2025

Security

Digital assets

The government unveiled the Property (Digital Assets etc) Bill on 11 September 2024 for its first reading in the House of Lords, with the bill aiming to remove restrictions that prevent digital assets from being recognised as personal property.

Currently, there are two types of property in English law: things in possession (tangible items such as machinery) and things in action (meaning assets that can be claimed or enforced through a court action, such as debts or shares). The bill would establish that something may be capable of attracting property rights even if it does not fit into either category. It acknowledges the emergence of new types of assets, such as cryptoassets and non-fungible tokens. The bill's explanatory notes state that it seeks to provide "clarity and greater legal certainty"' regarding the treatment of these assets.

We expect to see the bill continue its legislative journey throughout 2025, although questions will remain regarding issues such as what the courts will use as evidence of ownership of these assets.

Reforms to commercial transactions in Scotland

This Act, which received Royal Assent on 13 June 2023, introduces reforms to commercial transactions in Scotland by making three primary changes to Scots law:

• Updating the law relating to assignation (or assignment) of rights.

• Introducing a new form of security that can be granted over Scottish moveable property, known as the Statutory Pledge.

• Creating two new registers to be operated by Registers of Scotland – the Register of Assignations and the Register of Statutory Pledges.

Registers of Scotland is in the process of building and testing the two new registers. It is anticipated that the registers will be ready to go live in the spring/summer of 2025.

Basel 3.1

In the UK, Basel 3.1 is being implemented by the Prudential Regulation Authority (PRA) through the adoption of new rules which will be reflected in the PRA Rulebook. The near-final rules were published in two policy statements in 2023 and 2024. The first statement focused on credit valuation adjustment risk and operational risk with the second statement concerned with credit risk and the output floor as well as disclosure and reporting requirements. The output floor is a key Basel 3.1 reform that will address how banks calculate their risk-weighted assets when using internal models. The PRA has delayed the start of the transitional period to January 2026 in the UK. 

In the EU, the majority of the Basle 3.1 requirements are implemented by CRR III with effect from January 2025, although the output floor is subject to reliefs.

The position remains uncertain in the US, with revised proposals following industry pushback and a second round of consultations in the pipeline. These differences in timings, and substance, will likely raise difficulties for global firms.

Competition

Key trends and predictions for 2025 are:

Digital markets transformation

The Digital Markets, Competition and Consumers Act is likely to reshape digital markets, as well as having a significant impact on the enforcement of competition law within the UK and beyond.

The Competition and Markets Authority (CMA) is likely to focus on strategic market status designations in mobile ecosystems, search and digital advertising as soon as the regime comes into force (on 1 January). Businesses should prepare for compliance with the new digital and competition rules in addition to considering potential legal challenges.

Public procurement overhaul

The new Procurement Act, effective February 2025, will enhance information sharing between contracting authorities and competition authorities to target businesses engaged in anti-competitive practices. As a result, businesses should review their competition law compliance and procurement processes to ensure compliance.

CMA's focus for 2025

The CMA has stated that it will prioritise driving growth by deterring anti-competitive conduct. This includes launching a review of merger remedies in early January. The CMA's review of merger remedies is intended to ensure fair and proportionate outcomes, while increased engagement with business communities is hoped to support economic growth and stakeholder confidence.

Corporate

Implementation of the Economic Crime and Corporate Transparency Act 2023

All UK companies in 2025 will be affected by the implementation of the Economic Crime and Corporate Transparency Act 2023, which introduced a wide range of reforms and is coming into force in stages (though the timetable has slipped from initial expectations).

Most significantly this year, compulsory identity verification (IDV) for all directors and people with significant control (PSCs) of UK companies is expected to apply from autumn 2025, with a 12-month transition period for existing directors and PSCs. Guidance on how the verification process will work in practice is expected to be published earlier during 2025. All company directors and PSCs will need to ensure they complete the IDV process when it goes live.

For large organisations, a new corporate offence of failure to prevent fraud will apply from 1 September 2025. Organisations will have a defence to the offence if they have in place reasonable procedures to prevent fraud. Home Office guidance on the offence and frameworks for reasonable fraud prevention procedures was published in November 2024. Large companies should ensure that they have implemented the guidance in readiness for the offence coming into force.

Third party agents who make filings at UK Companies House for their clients will be able to apply to register as an "Authorised Corporate Service Providers" (ACSP) from spring 2025, provided they are regulated for the purposes of anti-money laundering. This is in anticipation of a new rule to be implemented in 2026 that only ACSPs and verified individual employees or officers of the entity in question will be able to make filings at Companies House. Affected firms should ensure that they complete their ACSP applications when the window opens.

A ban on the use of corporate entities as directors is due to be implemented alongside these reforms with an exception for corporate directors which are UK registered where every director of the corporate entity is an individual who has verified their identity. No implementation date has been provided for the ban, but given the timetable for implementation of the IDV rules is known, UK companies which use non-UK corporate directors should start planning to remove these from their structures.

Launch of the Private Intermittent Securities and Capital Exchange System (PISCES)

PISCES is a new trading platform that will allow unquoted private companies to trade their securities in a regulated environment. It is being designed as a secondary market geared towards providing late-stage liquidity (instead of new funding) by facilitating the sale of existing shares in private companies through intermittent auctions, rather than facilitating the offer or sale of new shares.

The regulatory regime is being developed by the UK government (HM Treasury), UK financial regulator (the FCA) and market participants such as the London Stock Exchange. In 2024, we saw a number of preparatory acts by way of consultation and draft regulations so, for example, we know that transactions on PISCES will be exempt from stamp duty and stamp duty reserve tax and that the public market style market abuse system will not apply. The FCA is current consulting on the proposed rules and guidance for the PISCES sandbox; that consultation ends on 17 February 2025 and HM Treasury intends to introduce the PISCES legislation by May 2025. It is likely that PISCES will be operational during the second half of 2025.

PISCES is designed to be of interest to founders and early-stage investors to give them an avenue for exit prior to a public listing or sale of the company. Institutional and professional investors as well as retail investors who meet the sophisticated or high-net worth investor tests will be eligible to invest on PISCES. In addition, it is thought that PISCES could support companies to manage employee share schemes as employees of the PISCES company and related group companies will also be able to trade shares (see also the employee incentives section, below).

Prospectus regime reforms

Reforms to the UK prospectus regime, which applies when a company is making an offer of securities, are expected to come to fruition in 2025. The reforms will replace the Prospectus Regulation inherited from the EU with a new system designed by UK regulators.

A statutory instrument was published in January 2024 and the FCA consulted on its rules in summer 2024. The FCA is aiming to finalise its rules by the end of the first half of 2025, replacing the existing Prospectus Regulation Rules with a new Prospectus Rules: Admission to Trading on a Regulated Market sourcebook. Companies considering a public offer of securities during 2025 should seek advice on how the new rules will apply to them.

Data law

New legislation

There is plenty of new data law to get to grips with. In the UK, the much-anticipated draft legislation in relation to data, the Data (Use and Access) Bill, is currently progressing through Parliament. The bill completed its committee stage in the House of Lords in December 2024, undergoing line-by-line scrutiny, and the report stage has been scheduled to commence on 21 January 2025. See our Insight exploring the bill in more detail. While the bill proposes changes to data privacy law, much of it deals with non-personal data, reflecting an increased appreciation of its importance, a trend which will continue into and beyond 2025, not least in the context of artificial intelligence.

Over in the EU, the EU Data Act will become generally applicable, with a few exceptions, on 12 September 2025, with profound implications for businesses generating, using or dealing in data produced by connected devices.  We may also see trilogue negotiations on the newly resurrected EU Regulation on cross-border GDPR enforcement.

Organisations are increasingly alive to the value of the data that they use or produce, and will need to get to grips with how these and other legislative developments could affect that value.

The intersection of data and AI

As business and public interest in AI intensifies in 2025 and beyond, so does the focus by regulators on the data which is crucial for AI's development and operation. Legal developments to look out for:

• UK government proposal and consultation on changes to copyright law to facilitate use of content data for AI training. See our Insight for more detail.

• The EU AI Act starts coming into force, including provisions relating to use of data to train general -purpose AI models.

• The ICO is continuing its focus on AI, and we can expect updated guidance on the application of data protection law to generative AI systems, following the conclusion of the regulator's consultation.
• The implications of the European Data Protection Board's recently issued opinion on the processing of personal data in the context of AI models

See the AI section of our Regulatory Outlook for more.

Cookies and adtech

We expect the ICO to continue its work on the use of cookies and other tracking technologies, especially focusing on their use in the online advertising world. Look out for: the outcome of the ICO's consultation on its updated draft guidance on cookies and other tracking technologies (the consultation runs until 14 March 2025) and an update on the ICO's position on cookie "consent or pay" business model, following its consultation last year.

For more on what 2025 has in store for data law, see this Regulatory Outlook.

Digital regulation

Legislation coming into effect

Digital Markets, Competition and Consumers Act 2024

The competition and digital markets provisions in the Digital Markets Competition and Consumers Act 2024 (DMCCA) came into force on 1 January 2025. The Competition and Markets Authority has started the process of implementing the consumer provisions under the DMCCA by consulting on the unfair commercial practices provisions, and the dual enforcement regime (see this Insight).

This year we will see secondary legislation bringing these parts of the new consumer protection regime into effect. The government is also consulting on the paid subscription contracts regime under the DMCCA, but these provisions are not due to come into effect until spring 2026.See also this Insight on the changes the DMCCA brings.

Online Safety Act 2023

The Online Safety Act 2023 (OSA) will start taking effect in 2025. The publication of Ofcom's illegal harms codes of practice and guidance in December 2024 marked the start of the new illegal content regime. All in-scope services must complete compulsory illegal content risk assessments by 16 March 2025 and implement safety measures to mitigate the risks identified by 17 March 2025. Ofcom's updated online safety roadmap outlines its further plans for 2025.

Ofcom is ready to enforce the OSA and can fine companies up to £18m or 10% of their global revenue, whichever is greater, for non-compliance. In certain serious cases it can apply for a court order to block a site in the UK. 

Media Act 2024

Most of the UK Media Act 2024 provisions depend on secondary legislation to become effective. Implementation is also dependent on action from Ofcom. According to the regulator's implementation roadmap, a range of publications are expected in 2025, including consultations on the public service broadcasting framework and on draft video-on-demand services codes and guidance. See our Regulatory Outlook for more information on what to expect in 2025. 

EU direction of travel

In 2025, following concerns expressed over the amount of digital regulation now in existence, we may see the EU focused more on applying and enforcing existing digital laws rather than introducing new legislation. For example, the EU has already been actively applying the Digital Services Act and the Digital Markets Act, which both became fully effective in 2024, and we can expect to see more activity in this area.

That said, we may see a call for evidence and possibly a public consultation from the European Commission to assist it in the development of a legislative proposal for a new Digital Fairness Act. The new Act would target the use of dark patterns, addictive design, social media influencer marketing and content personalisation, which were among the problematic practices identified in the Commission's "fitness check" of EU consumer law as not being sufficiently covered by existing consumer laws (see our Insight). The legislative proposal itself is not, however, expected until after 2025.

Further, there are various EU digital laws, such as the Artificial Intelligence Act, the European Media Freedom Act and the Data Act, that will become wholly or partly effective during 2025, meaning that businesses will need to start complying in these areas as well. 

See our Digital Regulation Timeline for more on both UK and EU digital laws. 

Employee incentives

Employers will be preparing for the tax changes announced at the Autumn Budget that take effect from 6 April 2025 – in particular, the increase in the rate of employer's national insurance contributions (from 13.8% to 15%) and the reduction in the threshold at which employers start paying NICs (from £9,100 to £5,000 per year).

Other upcoming changes relevant to employee incentives include the increase in the capital gains tax (CGT) Business Asset Disposal Relief rate, from 10% to 14% for disposals made on or after 6 April 2025 (and from 14% to 18% in the 2026/27 tax year). This follows on from the immediate increase in the CGT main rates announced at the Autumn Budget on 30 October 2024.

Legislation to enact the package of reforms to employee ownership trusts (most of which took effect from 30 October 2024) is currently going through Parliament.

A response to the consultation on improvements to tax-advantaged all-employee share plans is still awaited – it remains to be seen whether an update will be provided during 2025.

The government is proceeding with the Private Intermittent Securities and Capital Exchange System (PISCES), a new bespoke market for private company shares, with the intention that the legislative framework will be in place by May 2025. The Treasury is currently seeking feedback from stakeholders on how tax-advantaged employee share schemes (such as Enterprise Management Incentive options) would interact with PISCES – further information is expected in the coming months. 

Employment law

This year, like last, is set to be a busy year for employers, As well as a significant number of employment law reforms being progressed, employers continue to deal with the day-to-day challenges of managing a workforce, alongside the current economic challenges and evolving ways of working – technology continues to develop and we anticipate increasing reliance on AI by employers, both in recruitment and workforce management, as well as business delivery.

Reforms

In particular, we anticipate the government making continued progress towards significant employment law reform, originally announced in its Make Work Pay paper. The end of last year saw the publication of the Employment Rights Bill, providing further detail on a number of measures, together with the government's Next Steps paper on how other proposals, not included in the bill, will be taken forward. The bill is expected to receive Royal Assent mid-2025, although many of the reforms will not come into force until 2026.

During the first half of this year we are expecting the government to publish the draft Equality (Race and Disability) Bill which will widen the statutory legal protection on equal pay and pay gap reporting, as well as a number of consultations and reviews on its legislative proposals and other potential areas of reform.

Our dedicated microsite looks at the government's proposals, implications, and actions for employers and how they are being progressed.

Anti-harassment measures

Employers will need to review and implement measures to protect their staff against sexual harassment and wider workplace harassment. The end of 2024 saw a new legal duty come into force for employers to take reasonable steps to prevent workplace sexual harassment. This new legal duty was accompanied by detailed guidance from the Equality and Human Rights Commission which, among other factors, strongly recommends that employers undertake a risk assessment to identify measures for compliance.

Flexible working

We are likely to see more businesses in 2025 seek to tailor their hybrid working arrangements to ensure that they not only recruit and retain a strong skilled workforce but that they meet business targets and ensure their financial viability in what are set to be challenging times.  This comes alongside reforms to the statutory right to request flexible working: in April 2024 the statutory right to request flexible working become a day one right and the government is currently proposing further reforms including a requirement that any decision by an employer to refuse a request on one of the eight statutory grounds must be "reasonable".

A key mission of the new government is to ensure that individuals are able to find work and stay in those roles. Indeed, employers are managing an increasingly diverse workforce, including greater awareness and openness regarding the workplace adjustments employees may need to perform their roles. It is increasingly critical for employers to understand their legal responsibilities, including their duties under the Equality Act 2010, and how to effectively support and manage each employee's requirements as they look to optimise employee performance.

Efficiency focus

Against the backdrop of challenging economic times and increased costs to employers arising from  changes to statutory national minimum wage rates, employer national insurance contributions and the relevant thresholds, we are likely to see organisations increasingly focus on their internal efficiencies and the use of technology. Restructurings and ultimately redundancies may be inevitable. Employers undertaking restructurings will also need to bear in mind potential reforms in this area. For more on this, please see our Insight.

ESG

In 2025, companies that do business in Europe will need to address new ESG legislation that focuses on supply chain due diligence. There are three key pieces of new EU legislation which all require due diligence in relation to supply chains: the EU Deforestation Regulation (EUDR), the Corporate Sustainability Due Diligence Directive and the EU Forced Labour Regulation.

The EUDR takes effect on 30 December 2025 for large companies and 30 June 2026 for SMEs. From this date, companies must ensure commodities like cattle, cocoa and coffee are deforestation-free and submit due diligence statements.

The Corporate Sustainability Due Diligence Directive, effective from 2027, mandates large companies to address human rights and environmental impacts in their value chains which will require due diligence to be integrated into corporate policies.

Additionally, the Forced Labour Regulation, which came into force at the end of last year and will be effective from December 2027, prohibits products being placed on the EU market if they are made using forced labour – physically and online.

Companies operating in the EU need to assess whether these regulations apply to them and if so take necessary steps in 2025 to be prepared to comply with these new regulations.

Currently the UK does not have similar legislation in place, nor is it on the horizon. While there was a review recently conducted on the effectiveness of the Modern Slavery Act 2015, the government's response did not suggest that any substantive change is coming soon.

See the ESG section of our Regulatory Outlook for more on what to expect in 2025.

Financial services

The primary focus for financial services policymaking in 2025 will be to promote UK growth and protect consumers. The Labour Party laid out its plans for financial services in its white paper, Financing Growth, acknowledging the vital role the sector plays in the UK economy.

The six policy priorities set out for financial services are:

• delivering inclusive growth of the UK’s financial services sector;
• enhancing the international competitiveness of the UK’s financial services sector;
• reinforcing consumer protection and financial inclusion;
• leading the world in sustainable finance;
• embracing innovation and fintech as the future of financial services; and
• reinvigorating capital markets.

Further light was shed on what we can expect to see in the coming year and beyond in the chancellor’s 2024 Mansion House speech, in which Rachel Reeves announced plans to harness the strengths of the UK’s financial services sector with the publication of a financial services growth and competitiveness strategy in spring 2025, and outlined a focus on sustainable finance.

The speech also pointed to:

• a landmark pensions review;

• changes to how the Financial Ombudsman Service operates; and

• a National Payments Vision.

To feed into the strategy, HM Treasury has published a call for evidence, setting out its current approach to the strategy’s design and seeking views on objectives to deliver a credible ten-year plan to ensure UK investment and growth – as well as five policy pillars central to sustainable growth, and priority areas for growth opportunities.

As further changes are made to the UK’s financial services legal and regulatory framework, the UK will inevitably move further away from the pre-Brexit regime that was predominately based on EU-level rules. As UK policymakers determine what they believe works best for the UK market, there is an increasing risk of an impact on EU equivalence which could affect a number of different areas.

The change of government has also had a knock-on effect on delivery by regulators of change projects, as evidenced by the fact that the Financial Services Regulatory Initiatives Forum has been unable to provide a complete Regulatory Initiatives Grid this year of planned projects and timelines. Instead, the 2023 Regulatory Initiatives Grid must be read in conjunction with an interim update, with some future deliveries showing as being delayed, and some without a delivery timeframe.

Food law

Could 2025 be the year that further progress is made on authorising innovative foods? Recent announcements suggest a potentially streamlined process for bringing cell-cultivated products (CCPs), to market. Key developments include the introduction of the Regulatory Innovation Office (RIO) and the Food Standards Agency's (FSA) regulatory sandbox for CCPs. One of the four initial areas of focus for the RIO is on engineering biology, which can create new products such as cultivated meats. The RIO's aim is to help regulators bring innovative products to market safely. Coupled with the FSA's regulatory sandbox, which will provide pre-application support to cell-cultivated products companies, this highlights the progress being made in this area.

Additionally, the FSA's recent consultation on reforming the authorisation process for regulated products has gained broad support. The proposed reforms include removing renewal requirements for certain products and streamlining the approval process by eliminating the need for legislative procedures after ministerial authorisation. These changes, expected to be finalised in 2025, further illustrate the government's support for the development and market entry of innovative food products. 

Intellectual property

There is a lot on the horizon for intellectual property this year. With respect to patents, standard essential patent (SEP) licensing disputes will continue to be a maintain of the English courts and the UKIPO has indicated that it is considering if any policy interventions are necessary following its previous consultation. The European Commission's draft SEP regulation will continue its legislative journey this year after slow progress due to its controversial nature and the European Parliamentary elections last year.

With its increasing caseload, the Unified Patent Court's practice and jurisprudence will continue to develop in 2025. We have started to see substantive decisions on issues such as claim construction and the relevance of prosecution history, indirect infringement and infringement under the doctrine of equivalents, right of prior use, joint and intermediary liability, as well as considering the skilled person, the assessment of novelty, inventive step, added matter, and insufficiency. We can expect further substantive decisions from the Court of First Instance, and the Court of Appeal given the speed at which appeals are being heard. We might also receive some clarity on the UPC's long arm jurisdiction as a result of the CJEU's awaited decision on jurisdiction in C-339/22 BSH Hausgeräte v Electrolux.

As for trade marks, we will see the impact of the Supreme Court's decision on bad faith in Sky v SkyKick throughout the course of 2025. This decision effectively opens the door for broad registrations to be attacked on grounds of bad faith and we can expect bad faith claims to become a common feature of trade mark disputes in the UK. The decision will also impact long-established filing practices and brand owners need to carefully consider how to describe goods and services when filing applications to try to avoid attacks on this basis. We will also see the Supreme Court consider the issue of post-sale confusion in Iconix v Dream Pairs and the Court of Appeal will again deal with a lookalike dispute in Thatchers v Aldi.

For more detail on these and other developments, see our Insight: The year ahead for intellectual property: what to look forward to in 2025.

Pensions

Spring 2025 should see the government release the final report on phase one of its pensions review. This report should confirm which of the changes proposed in its November 2024 consultations on reforms to defined contribution (DC) workplace pensions and to the Local Government Pension Scheme the government intends to proceed with.

We expect any primary legislation needed to support those reforms to be included in a draft Pension Schemes Bill to be released in summer 2025. For DC schemes the Pension Schemes Bill is also likely to include draft legislation to introduce new value for money requirements for trust-based schemes, a new trustee duty to offer a retirement income solution or range of solutions (including default investment options) to members, and new automatic consolidator funds for small deferred DC pots. For defined benefit (DB) schemes, the bill should contain the long-awaited legislative framework for commercial DB superfunds and remove the need to take a Pensions Ombudsman decision to the county court before starting recovery where a member disputes the recovery of past overpayments through recoupment (deduction from future pension payments).

We also expect this year to bring the draft legislation for the planned change to include death benefits and any "unused" DC funds in a member's estate for inheritance tax purposes from April 2027. Once the detail has been released, it should be clear which benefits are affected and so which schemes need to prepare for the change. HMRC's consultation on the process by which pension schemes will report and pay any inheritance tax due is open until 22 January 2025.

And, finally, as affected schemes continue to consider the potential impact of the Court of Appeal's decision in the Virgin Media case, 2025 may bring more judgments as other schemes take related questions to the courts. We hope the Department for Work and Pensions will confirm, as soon as possible in the new year, whether it plans to use its power to make regulations to retrospectively validate amendments, or to intervene in some other way. 

Product regulation

The Product Regulation and Metrology Bill, published on 4 September 2024, has completed its committee stage in the Lords and will next be read at the report stage. The bill is intended to modernise the UK's management of product and metrology regulations and in practice is expected to facilitate closer alignment with European Union standards.

The bill is skeletal, with details to be provided through secondary legislation drafted by the secretary of state, which, as currently drafted, will not require parliamentary approval – a contentious point. During the committee stage, proposed amendments addressed jurisdictional scope, environmental considerations, the definition of a product, the definition of an online marketplace, consumer safety enhancements, reviews of technical standards and enforcement powers.

Its importance cannot be overstated as it will form the primary UK legislation addressing product safety concerns. Key points to watch in 2025 include the potential change to the definition of a "product" to include intangible items, and the flexibility to change the definition of "online marketplaces". Additionally, the ability for ministers to align UK legislation with EU standards could streamline cross-border trade and regulatory compliance.

The bill is expected to receive royal assent in spring  2025 with secondary legislation expected to be introduced towards the second half of 2025.

Procurement

The Procurement Act 2023 received royal assent in October 2023 and is due to "go live" on 24 February 2025, after a delay from the originally anticipated October 2024 date.

In addition to our series of webinars and Insight articles on the key changes in the Act, we have also published our "Getting your house in order" series of videos, checklists and infographics aimed at preparing suppliers for implementation. All of this content can be found on our microsite, which acts as a one-stop shop for preparation for the Act to go live. 

Real estate, planning and construction in England

Significant reforms affecting English real estate are expected this year. Among the anticipated changes covered in our Insight: What's on the horizon for English real estate in 2025?, the following are likely to have particular impact.

Commercial

The process for reforming the 70 year old regime governing security of tenure is now under way with a consultation on whether to fundamentally overhaul the existing model or tinker around the edges. Complexities and the wide-spread impact of any change is likely to mean we remain in consultation mode for 2025 with any substantive reforms to follow next year.

The "flight to quality" by occupiers continues, prompting concerns about stranded assets – buildings abandoned where the costs of complying with energy efficiency regulations make letting unviable. Urgent clarification is needed from the government on future minimum standards to enable businesses to plan; the previously announced trajectory is not looking achievable.

Public building owners and event organisers will need to start preparing for the new rules aimed at enhancing protection from terrorism. The Terrorism (Protection of Premises) Bill is anticipated to become law later this year. For more information, see this government factsheet and our Regulatory Outlook. 

Residential

Fundamental reform to the private rental sector is on the agenda with the Renters' Rights Bill making its way through parliament. Notable changes include the abolition of "no fault" evictions, limitations to rent increases and the end of fixed term tenancies meaning tenants can terminate on two months' notice. Landlords have raised concerns over the viability of letting models and the implications of the significant delays in obtaining court orders for possession.

Changes to home ownership are also anticipated for 2025, making it easier for those who own their home on a leasehold basis to purchase the freehold or extend their lease. We can anticipate review of the more controversial provisions introduced by the previous government (which have not been implemented) which would have the effect of reducing the premium to purchase a freehold or extend a lease and would bring more mixed residential-commercial schemes within the scope of tenant's right to manage. Additional changes on the horizon include: abolishing ground rents in existing leases, exploring alternatives to forfeiture and improving transparency and fairness in relation to estate management. Revising the ownership basis for flat owners has been discussed for some time, and we may see the currently little used tenure of commonhold come under the spotlight, although this is likely to be limited to consultation with key stakeholders during 2025.

Building safety issues will remain high on the agenda for those involved in the development and sale of residential property (see our detailed Insight on what to expect in the building safety arena in 2025). In addition, the housebuilding industry will be getting to grips with the Future Homes Standard and Home Energy Model, which are anticipated shortly, as well as providing input into government plans to update the basis on which the energy efficiency of homes is measured  Planning reform will also be highly significant for housebuilders as discussed below above.

Housing planning reform

The government is looking to make substantial changes to support its aim of delivering as many houses as possible across the parliament.

Changes to guidance are due in January, likely followed by the introduction of national development management policies later in the year.

The Planning and Infrastructure Bill is due in early 2025 and is anticipated to include amendments to the planning committee process, compulsory purchase reform, and proposals to unlock sites held up by nutrient neutrality issues.

We expect to see many more applications for green belt development, and a more interventionist approach from the government to both plan-making and decision-taking.

Energy infrastructure planning reforms

The UK government has an ambitious reform agenda including delivering its Clean Power 2030 Action Plan (see our Insight).

The Planning and Infrastructure Bill will seek to accelerate the delivery of major infrastructure projects.

Anticipated amendments to the NSIP (nationally significant infrastructure project) regime include the reintegration of offshore wind, increasing the solar generation threshold, and updates to policy and guidance.

In the planning application regime, guidance and policy for renewable and low carbon developments are expected to be revised several times.

Consenting under the Infrastructure Wales Act is anticipated to go live in autumn.

Telecoms

2025 may be the year that sections 61 and 63 of the Product Security and Telecoms Infrastructure Act 2022 are finally brought into force, ushering in the harmonisation of the valuation basis between telecoms apparatus agreements made before 28 December 2017 still governed by the Landlord and Tenant Act 1954 and later agreements renewed under the Telecoms Code. Code operators are likely to welcome this change which should assist in avoiding anomalous rental valuations and in encouraging site providers to agree settlements at an earlier stage.

Across industry

With the construction sector remaining the worst-affected industry for insolvencies in England and Wales last year, the government will take various measures to address the persistent issue of late payments to SMEs, including: a Fair Payments Code, which aims to improve cash flow, support supply chains, and reduce disputes by helping SMEs identify reliable and trusted partners; new regulations requiring large construction companies to report information related to retention clauses twice yearly, to try to address the problems that unpaid or late retentions can cause to small business in the supply chain; and two new Procurement Policy Notes (PPN 015 and PPN 018) aimed at companies bidding for government contracts worth over £5 million under the Procurement Act 2023 (see more on the new Procurement Act). 

Tax

It was announced in the Autumn Budget that the special capital gains tax rate for carried interest will be increased from 28% to 32% from 6 April 2025, with further reform coming in 2026 when the carried interest tax regime will be brought within the income tax framework. The government will continue to consult in 2025 on further aspects of the new carried interest tax regime to which Osborne Clarke will again respond.

We expect to see this year a second consultation on improving the UK international tax legislation (notably transfer pricing, permanent establishments and diverted profits tax). While specific policies may take time to formulate the government has suggested (in its Corporate Tax Roadmap published at the Autumn Budget) the potential removal of UK-to-UK transfer pricing. We may also see a consultation on the design of a new regime for corporate re-domiciliation (to support companies seeking to relocate to the UK) following a positive response from the government and an independent expert panel in October.

Real estate fund managers will welcome the introduction in 2025 of a new fund structure – the Reserved Investor Fund (RIF). The RIF has been designed to accommodate industry demand for a flexible, low-cost unauthorised fund to make the UK more attractive for asset management and fund domicile. Although the RIF will be introduced in a more restrictive form than originally proposed, it is still expected to be particularly attractive for investment in commercial real estate. The RIF will be introduced through secondary legislation to be brought forward by 5 April 2025.

This year will also see major changes to the tax regime for non-UK domiciled individuals. With effect from 6 April 2025 the remittance basis of taxation for non-doms will be replaced with a simpler residence-based regime and the current domicile-based system of inheritance tax will be replaced with a new residence-based system. New arrivals will benefit from four years of complete exemption on their foreign income and gains, which may encourage an influx of internationally mobile individuals. It remains to be seen if longer term residents will abandon the country to avoid paying tax on their worldwide income.

We also expect to hear more in 2025 on the other high profile policies announced in the Autumn Budget that are not due to come into force until 2026 and beyond, such as the changes to business property relief, agricultural property relief and the extension of inheritance tax to pension funds.