5 Days: Three Employment Laws Change at Once (SSP, MTD, Protective Award)

On 6 April 2026, three significant pieces of UK employment and tax law change simultaneously. Each one affects a different part of how businesses operate. Miss any of them and the consequences range from tribunal claims to HMRC penalties.

This is the single biggest regulatory change day in a decade. Here's exactly what's happening and what your business needs to do before Thursday.

---

Change 1: Statutory Sick Pay From Day One

What's changing: The waiting period for Statutory Sick Pay (SSP) is abolished. From 6 April, workers are entitled to SSP from their very first day of illness — no more three waiting days.

Current rule: SSP only kicks in from the fourth consecutive day of illness. The first three days (waiting days) have always been unpaid — employees simply lost those days' wages.

New rule: SSP is payable from day one of any eligible sick absence.

Current rate: SSP is £116.75 per week (the rate may also change — confirm with payroll).

Who it affects: Every employer with eligible workers (employees earning above the lower earnings limit of £123/week). Approximately 2.8 million workers across the UK who previously went unpaid on sick days 1–3 will now qualify for SSP.

What you need to do:

1. Update your sickness absence policy — references to "waiting days" must be removed
2. Update your payroll system or payroll bureau to trigger SSP from day one
3. Brief line managers — this changes how to handle the first days of any sick absence
4. Review any contractual sick pay schemes — if you offer enhanced sick pay, check how it interacts with the new SSP baseline

The risk of getting it wrong: A worker who is not paid SSP they're entitled to can bring a claim to HMRC. HMRC can order full back-payment plus additional compensation. Underpayment of SSP is also now within scope of the new Fair Work Agency, which launches one day later on April 7.

---

Change 2: Making Tax Digital for Income Tax — 860,000 Sole Traders Must Act Now

What's changing: Making Tax Digital for Income Tax Self Assessment (MTD ITSA) becomes mandatory from 6 April 2026 for sole traders and landlords with income above £50,000 per year.

What it means in practice:

• Quarterly digital updates must be submitted directly to HMRC
• This requires MTD-compatible software (accounting software that connects directly to HMRC)
• The annual self-assessment tax return does not go away — but it becomes a final summary of already-submitted quarterly data
• First quarterly update deadline: 7 August 2026 (for the period April–June 2026)

Who is affected: HMRC estimates 860,000 sole traders and landlords fall into scope in the first phase. A second phase (income above £30,000) follows in April 2027.

The critical point: The software must be registered and linked to HMRC before the quarterly update can be filed. That registration cannot happen retroactively after the deadline — it must happen before April 6.

What you need to do before April 6:

1. Confirm whether your income exceeds £50,000 (self-employment or rental, or combined)
2. Choose MTD-compatible software (HMRC maintains an approved list on gov.uk)
3. Sign up for MTD ITSA through your HMRC online account or via your accountant
4. Link the software to HMRC — your accountant can do this on your behalf

If you're an accountant: This affects your clients. Any sole trader or landlord you advise with income above £50,000 needs to be MTD-registered before Thursday. This is a multiplier problem — one accountant with 30 qualifying clients = 30 compliance actions due this week. ComplianceAlert's Pro plan monitors MTD ITSA updates as they emerge so you stay ahead of future phase deadlines.

HMRC's position on penalties: HMRC has confirmed there will be no late filing penalty for the first quarterly update (due August 7) to allow for a soft launch. However, the registration itself must still be completed — businesses that are not registered by April 6 are technically non-compliant and will be penalised on subsequent submissions.

---

Change 3: Collective Redundancy Protective Award Doubles to 180 Days

What's changing: The maximum protective award for failure to collectively consult in redundancy situations doubles from 90 days' pay to 180 days' pay per affected employee.

Background: When an employer proposes to make 20 or more redundancies within 90 days, they are legally required to collectively consult with employee representatives (or recognised trade union) for a minimum period before any dismissals take effect. Failure to consult triggers a "protective award."

Old maximum award: 90 days' pay per affected employee (uncapped — based on actual pay, not the statutory cap) New maximum award from April 6: 180 days' pay per affected employee

Why this matters: For a business making 25 redundancies at an average salary of £30,000, the maximum protective award under the old rules was approximately £185,000 total. From April 6, that same failure could generate a £370,000 liability.

This change was introduced alongside the Employment Rights Bill and is designed to incentivise genuine consultation rather than rubber-stamp processes.

Who it affects: Any business that has made or is planning collective redundancies. Crucially, it also affects businesses that have already gone through a redundancy process where the consultation period was inadequate — claims can be brought to employment tribunal within 3 months of dismissal.

What you need to do:

1. If you're currently in a collective consultation period, ensure the process is fully compliant — minimum 30 days for 20–99 redundancies, 45 days for 100+
2. If you're planning redundancies, get HR or legal advice before issuing any notice
3. Review your HR templates — letters and timelines issued before April 6 should have been based on the old rules; any issued on or after April 6 must reflect the new maximum

---

April 7: The Fair Work Agency Goes Live

One day after all three changes above takes effect, the Fair Work Agency officially launches. This is the new enforcement body that merges HMRC's National Minimum Wage team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate.

The Fair Work Agency doesn't need a complaint to investigate. It can conduct proactive, unannounced inspections — checking wages, SSP records, holiday pay, and worker status simultaneously.

The sequencing is deliberate: April 6 creates three new compliance obligations; April 7 creates the enforcement mechanism to check them.

---

The Compliance Impact by Sector

Hospitality: SSP day one is significant for a sector with high casual staff turnover. Payroll systems that weren't updated in time will misclassify new sick absences and underpay. The FWA's focus on wage and sick pay records puts hospitality squarely in the enforcement window.

Construction: MTD ITSA catches self-employed contractors (sole traders) with income above £50,000 — a common structure in construction. Many won't have been told to register. If your subcontractors are sole traders in scope, they need to act now.

Professional Services / Accountants: MTD ITSA is your clients' problem — and yours if they claim they weren't informed. Every accountancy practice should have already contacted qualifying clients. If they haven't, this week is the last chance.

Retail: SSP day one changes the sick day economics for part-time retail workers. Many retailers relied on waiting days as informal absence management — that lever is gone from April 6.

Healthcare: Care workers on zero-hours contracts now accrue the right to guaranteed hours requests (separate FWA obligation) AND get SSP from day one. The combination of FWA launch + SSP changes creates elevated compliance risk in an already heavily regulated sector.

---

Your April 6 Checklist

☐ Payroll system updated: SSP triggers from day 1 (not day 4)
☐ Sickness absence policy updated: remove references to "waiting days"
☐ MTD ITSA registration complete (if you're a sole trader or landlord with income >£50k)
☐ MTD-compatible software linked to HMRC
☐ If planning redundancies: consultation structure reviewed against 180-day protective award
☐ Line managers briefed on SSP day-one change
☐ HR templates updated for collective redundancy protective award maximum

---

Stay Ahead of Every Change Like This

April 6 is unusually busy. But regulatory change doesn't stop — new obligations appear throughout the year, often with tight implementation windows.

ComplianceAlert monitors UK employment law, tax legislation, and regulatory enforcement changes in real time and sends plain-English alerts to business owners and their advisers before enforcement begins.

Start your free 7-day trial — no credit card required:

👉 compliancealert.co.uk

Not sure how compliant your business is right now? Take our free 3-minute Compliance Score quiz:

👉 compliancealert.co.uk/compliance-score

---

FAQ

Does SSP day one apply to zero-hours workers? Yes, as long as the worker is an "employee" for SSP purposes and earns above the lower earnings limit. Zero-hours workers who meet the earnings threshold qualify.

What if I already issued redundancy notices before April 6 — does the new protective award apply? The new maximum applies to dismissals that take effect on or after April 6. If consultation failures relate to pre-April-6 dismissals, the old 90-day maximum still applies.

My accountant handles my tax — do I still need to register for MTD? Your accountant can register on your behalf, but you need to authorise them and ensure your income is assessed correctly. Contact them this week.

Will the Fair Work Agency target small businesses? The FWA has not published a specific target profile, but its predecessor bodies (particularly the HMRC NMW team) have consistently investigated hospitality, care, retail, and construction. Small businesses are absolutely within scope.

---

Key Takeaways

• SSP from day one — remove waiting days from your payroll and policies before 6 April
• MTD ITSA mandatory — 860,000 sole traders must be registered and using MTD software by April 6; first quarterly update due August 7
• Protective award doubles — 90 → 180 days' pay per employee for collective redundancy consultation failures
• Fair Work Agency launches April 7 — proactive enforcement starts the day after these obligations take effect
• Free trial: Monitor all of this automatically at compliancealert.co.uk

---