How the CBI is shaping policy to protect confidence and unlock economic potential
This article will be updated throughout 2025 as the CBI continues to deliver impact for business.
This year, the CBI has driven significant advocacy work to demonstrate what the government can do to boost business confidence, with notable successes including the Spring Statement and Planning and Infrastructure Bill.
In the Spring Statement, Chancellor of the Exchequer Rachel Reeves upheld her promise made at our conference not to increase the burden on businesses – a major win for our members. By securing this commitment, the CBI helped ensure businesses weren't faced with additional financial pressures during a time of economic uncertainty. While tax rises may materialise in the Autumn, the Spring Statement was a crucial moment where we effectively steered the government away from pulling the business tax lever, making clear the ongoing challenges members are facing in mitigating financial pressures.
In parallel, we've made strides on the Planning and Infrastructure Bill, which incorporates several key recommendations from our 'Planning for Growth' report and our response to the National Planning Policy Framework consultation. The Bill includes important measures to ringfence planning fees, streamline planning decisions through delegated decision making, and mandate training for councillors on planning committees. We've also seen the announcement of strategic planning, enabling mayors and local authorities to create spatial development strategies, which will align planning across regions and ensure infrastructure needs are met to support regional economic growth.
As these initiatives move forward, the CBI will continue to push for their implementation, ensuring businesses benefit from a more efficient, predictable planning system and a stable fiscal environment.
January
Unlocking untapped pension surplus
What we delivered
Between £160-240bn is sat untapped in overfunded defined benefit pension schemes. The government has announced plans to enable more schemes to return that surplus to employers so that it can be used for growth.
This is a policy recommendation the CBI has specifically pursued for more than three years, producing briefing papers and raising it routinely with officials and ministers.
What we'll do next
The details of the proposals matter. We'll continue to engage DWP, DBT, and HMT to ensure the changes deliver the refunds needed to shift the dial on growth and investment whilst safeguarding member benefits. Members wanting to be involved can join our Pensions Panel by contacting Laurence Raeburn-Smith.
Challenging an unnecessary levy
What we delivered
The Pension Protection Fund (PPF) collects a £100mn levy from businesses it doesn't want or need to collect. It does so because legislation means charging a 0% would remove its ability to charge a levy in the future, should it ever need to. The government has now pledged to consider proposals to allow the Pension Protection Fund greater flexibility to reduce the levy.
The CBI held many meetings with DWP officials and government advisors. A briefing was created for HMT ahead of the 2024 Budget.
What we'll do next
We hope the government will bring forward the changes in the Pensions Bill expected later this year. In advance of that, the CBI is engaging DWP officials on the details of the proposals.
February
Reducing the apprenticeship minimum duration
What we delivered
The decision to reduce the minimum duration of certain apprenticeships from 12 to eight months will be welcomed by many businesses - particularly those offering lower-level apprenticeships, where a 12-month requirement is often seen as unnecessarily long and a barrier to progression. This change is expected to accelerate apprentices' transition into further study or employment, though it remains unclear which specific standards the reduction will apply to.
We've been calling for a reduction in apprenticeship duration requirements since developing our policy positions as part of last year's Adult Skills Pledge.
What we'll do next
Next, we'll engage members to understand which standards they believe the change should apply to - and whether eight months is still too long in some cases - before feeding this insight back to government.
Improving apprenticeship accessibility
What we delivered
Allowing businesses to decide whether Level 2 English and maths 'passes' are required will help ensure capable apprentices aren't held back by arbitrary academic benchmarks. This change should support more apprentices to complete their training - and make apprenticeships a more accessible route for businesses and individuals with lower-level qualifications.
The CBI campaigned on this issue following the development of policy proposals as part of the Adult Skills Policy Pledge.
What we'll do next
We'll continue to engage government on the need to reform English and maths qualifications, so they better reflect individuals' functional literacy and numeracy skills -. This will be particularly important for 16-18-year-olds, who are currently exempt from this change. We'll also share business feedback on the announcement through the government bulletin.
Linking social and economic value to national missions
What we delivered
Firms often face challenges meeting social value requirements in procurement due to unclear guidance, inconsistent criteria, and added costs - particularly SMEs with limited capacity. In response, the CBI called for clearer, more consistent criteria linking social value to government priorities.Following our consultation response and direct engagement with the Cabinet Office and the Minister, the updated National Procurement Policy Statement - published in February - now includes a priority to secure social and economic value aligned with national missions. It also sets expectations for contracting authorities to assess their capacity and skills to manage procurement effectively. These changes reflect CBI calls and represent a step forward in making procurement more accessible, transparent and mission focused.
What we'll do next
We'll continue working with the Cabinet Office and HM Treasury to secure the wider reforms outlined in the CBI's Spending Review submission.
Tackling regulatory barriers to growth
What we delivered
The CBI's Spending Review submission called on the government to commit to a targeted audit of regulatory costs in high-growth and/or enabling sectors within the Industrial Strategy. The governments recently announced audit, alongside the Prime Ministers commitment to cut regulatory administrative burden by 25%, will address some of the regulatory challenges faced by our members- including the growing volume of new regulations, complex compliance barriers, and increased regulatory divergence. These issues, highlighted by many businesses, have led to suboptimal outcomes, including stifled investment and growth.
This ask was included in the CBI's Spending Review submission.
What we'll do
We will continue to push for our additional Spending Review asks, including through a member roundtable discussion with the Chief Secretary to the Treasury (date TBC). Furthermore, The CBI will host its inaugural Business/Regulator Forum on 1st July to discuss regulatory reform and strengthen strategic dialogue between regulatory authorities and sponsoring government departments, ensuring the voice of business is effectively integrated into decision-making processes.
March
Reducing industrial action notice period
What we delivered
In line with CBI advocacy, the government has decided not to reduce the notice period for industrial action to seven days, as originally proposed. Instead, the notice period will be reduced from 14 to 10 days. Whilst still challenging, this is an improved outcome for businesses, as the CBI had argued that the original seven-day notice would create instability and undermine planning and operational efficiency.
The CBI has lobbied extensively on this issue, engaging with civil servants, ministers, and MPs through numerous meetings and consultations to ensure the voices of businesses were heard. Our advocacy highlighted the practical challenges businesses would face under a shorter notice period, particularly in sectors where timely decision-making and workforce planning are critical.
The 10-day notice period remains a compromise, but it represents a more manageable approach for businesses compared to the proposed seven-day limit.
What we'll do next
As the Employment Rights Bill progresses through Parliament, the CBI will continue to advocate for further changes that support a fair and flexible labour market. We will engage with key stakeholders to ensure that the final legislation reflects the needs of businesses, while still respecting workers' rights.
April
Scrapping proposed detailed data on working hours reporting in employer payrolls
What we delivered
Earlier this year, the government announced that it would scrap the planned requirement for employers to report detailed working hours through RTI payroll submissions, originally set for April 2025, reaffirming the cancellation in a tax update on 28 April. In 2022, the CBI raised concerns with HMRC about the significant administrative burden of the proposed regime, which would have required employers to track and report more comprehensive data for all employees, adding costs and complexity, particularly for businesses with large, diverse workforces.
In our 2024 Autumn Budget Submission and through CBI recommendations in a report by the Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants in England and Wales (ICAEW) in December 2024, we highlighted that digitalisation should streamline tax administration processes and not lead to ever more data reporting burdens on businesses.
This policy reversal will save UK employers £58mn in one-off transitional costs and £10mn in recurring annual costs.
What we’ll do next
The CBI will continue to advocate for HMRC to focus on fixing the basics by digitalising paper-based processes and resolving legacy systems issues before introducing any new real-time reporting requirements, as part of our ongoing Spending Review engagement with HMRC and the Treasury.
Revamping HMRC employment status checker tool
What we delivered
In April, HMRC launched a significantly improved version of its Check Employment Status for Tax (CEST) tool. This follows the CBI’s initial proposals in 2022, reiterated through later Budget submissions, and reflects feedback from Employment Taxes Working Group members during engagements with HMRC’s policy team on improving the tool’s usability.
These reforms aim to make it easier for businesses to comply with the IR35 regime, which governs off-payroll working. Its complexity creates significant administrative burdens for businesses, especially when determining employment status and managing compliance risks when hiring contractors.
The new CEST tool includes several improvements advocated by the CBI, including clearer and simplified language, fewer “Unable to Determine” outcomes, a new opening question on whether there’s an ongoing obligation for the worker to be offered and accept work, optional sector-specific questions to improve relevance, and assurances that the tool reflects up-to-date case law. HMRC has also removed unnecessary or unclear questions and included links to more helpful guidance and definitions to reduce ambiguity.
What we'll do next
The CBI will continue to push for broader IR35 reform that delivers greater certainty and simplicity for businesses. This includes pushing for a brand-new tool to clarify when a service is fully outsourced and exempt from employment status checks, and calling for a new ‘Green Card’ facility to give contractors upfront certainty where they are genuinely not deemed employees, eliminating the need for status checks by hiring businesses.
Delaying mandatory payrolling of benefits-in-kind
What we delivered
HMRC announced on 28 April that mandatory payrolling of employee benefits will be delayed by one year, from April 2026 to April 2027. This delay will ease pressure on businesses, allowing more time to adapt systems and reduce administrative complexity from premature implementation.
The CBI has consistently made the case for this delay. HMRC’s policy team joined the CBI Employment Taxes Working Group in November, where members raised concerns about reporting benefits when there's no salary to deduct tax from, such as during unpaid leave; practical issues with taxing fuel and hire cars in real time; and practicalities around how the changes will affect employees’ tax codes. A formal delay was called for in our 2025 Spending Review submission, and the CBI reinforced the case at a tax administration simplification roundtable hosted by the Exchequer Secretary to the Treasury in February.
What we’ll do next
The CBI will continue to work closely with HMRC’s policy team to ensure detailed rules and guidance are practical and proportionate. We will push for a system that reduces compliance risk, ensures flexibility for complex benefit types, and supports efficient digital transformation for employers.
Championing new VAT relief for business donations of goods to charity
What we delivered
The government published a consultation on the VAT treatment of business donations of goods to charity on 28 April, following our call in the CBI’s 2024 Autumn Budget submission. While the consultation was delayed due to concerns about potential administrative burdens on HMRC and charities, as well as fiscal constraints, the CBI's engagement with HM Treasury immediately following the Budget and further discussions earlier this year helped to overcome these challenges. A private roundtable, facilitated by the CBI, with charity sector leads was instrumental in ensuring the consultation was published.
A new VAT relief would benefit a wide range of businesses, including those in retail, food, consumer goods, clothing, appliance manufacturing, and wholesale supply. By removing the VAT cost barrier for donations, businesses will be encouraged to donate surplus stock, reduce waste, and support charitable work more effectively.
What we’ll do next
The CBI will continue to engage with members to seek input on the consultation ahead of the 21 July deadline. We will also set up a roundtable with Treasury, HMRC, DBT, and DCMS officials, alongside interested businesses and representatives from the charity sector, to ensure all perspectives are considered.
Supporting Valuation Office Agency (VOA) becoming part of HMRC
What we delivered
In April 2025, HM Treasury announced that the VOA will become part of HMRC to increase efficiency, business experience, and ministerial accountability. This decision aligns with the CBI’s call for VOA overhaul, as made in our September 2024 report on business rates reform. We emphasised the need for a reset in the VOA–business relationship, highlighting that improved customer service should be achieved through greater transparency, more timely assessments, and increased responsiveness.
After the 2024 Autumn Budget, we organised a roundtable with HM Treasury and the CBI Business Rates Working Group, allowing our members to directly share their experiences with the VOA.
This reform, due to come into effect by April 2026, aims to deliver tangible improvements in the VOA’s operations, including better service delivery for businesses as key reforms are made to the business rates system over the course of the Parliament.
What we'll do next
The CBI will continue to engage with HM Treasury and HMRC, and push for the government to manage the VOA's integration into HMRC effectively. Doing so will secure the outcome of improved customer service through enhanced accountability, increased transparency, and breaking down silos to share knowledge and leverage synergies.
