Businesses’ responses to changes in legislation
Businesses have little control over changes in government legislation Laws made by the government.. They should, however, be notified of any changes in legislation before those changes are implemented. During this period, they will need to respond by taking any necessary steps to ensure that they comply with the new rules. Failure to do so could have serious consequences, including:
- penalties, such as fines or imprisonment
- bad publicity, which may affect sales
Some laws will affect all businesses, and any changes in these laws will require a response. Examples include:
| Area of law | Change | Response |
| Consumer protection | The Consumer Rights Act (2015) updated consumer law to include digital content for the first time. Businesses selling digital content have to ensure that the content is of satisfactory quality, fit for purpose and as described. | Businesses must ensure their products meet these requirements, which may involve additional staff training. |
| Employment | Employment laws cover the rights of staff in the workplace. An example is the National Minimum Wage Act (1998). This sets out the minimum hourly wage that staff must be paid, which increases every year. | In order to compensate for having to pay their staff more money, businesses may consider reducing the number of staff they employ, increasing the prices of their products, or making cost reductions elsewhere in the business. |
| Health and safety | Changes made to health and safety legislation often require additional staff training or additional safety equipment. For example, as a result of changes introduced in November 2019, businesses that use drones weighing over 250 g require employees to have passed a drone test and to register with the Civil Aviation Authority. | These changes will increase businesses’ costs. |
| Tax | Changes to tax regulations and rates can have a significant impact on a business. For example, a fall in the rate of corporation tax reduces the amount of tax that corporations have to pay on their profits. Alternatively, if the rate of VAT is lowered, businesses may make more sales. | Companies may reinvest the extra money back into the business. |
| Area of law | Consumer protection |
|---|---|
| Change | The Consumer Rights Act (2015) updated consumer law to include digital content for the first time. Businesses selling digital content have to ensure that the content is of satisfactory quality, fit for purpose and as described. |
| Response | Businesses must ensure their products meet these requirements, which may involve additional staff training. |
| Area of law | Employment |
|---|---|
| Change | Employment laws cover the rights of staff in the workplace. An example is the National Minimum Wage Act (1998). This sets out the minimum hourly wage that staff must be paid, which increases every year. |
| Response | In order to compensate for having to pay their staff more money, businesses may consider reducing the number of staff they employ, increasing the prices of their products, or making cost reductions elsewhere in the business. |
| Area of law | Health and safety |
|---|---|
| Change | Changes made to health and safety legislation often require additional staff training or additional safety equipment. For example, as a result of changes introduced in November 2019, businesses that use drones weighing over 250 g require employees to have passed a drone test and to register with the Civil Aviation Authority. |
| Response | These changes will increase businesses’ costs. |
| Area of law | Tax |
|---|---|
| Change | Changes to tax regulations and rates can have a significant impact on a business. For example, a fall in the rate of corporation tax reduces the amount of tax that corporations have to pay on their profits. Alternatively, if the rate of VAT is lowered, businesses may make more sales. |
| Response | Companies may reinvest the extra money back into the business. |