A tighter regulatory landscape looms for service providers

A government consultation has culminated in proposals to reform the Provision of Services Regulations 2009 – presenting pertinent considerations for providers and compliance teams alike.

Contributors: Molly Hutchinson and Fiona Moss

On 5 March 2026, the government published its response to the 2023 consultation on proposed amendments to the Provision of Services Regulations 2009, with the resulting changes due to be implemented by October 2026. 

The regulations provide a framework for how competent authorities operate authorisation schemes in respect of the mandatory licences or authorisations required for service provision. Reforms include:

• Extending the scope of the regulations to include non-UK service providers so that they benefit from the same transparent regime as UK organisations.  
  

• Refining licence application processes. 
  

• Imposing enhanced transparency requirements on competent authorities in relation to authorisation schemes.

How could this impact your business? 

The changes are intended to ensure that authorisation processes for businesses are fairer, more transparent and easier to navigate. The inclusion within the regime of non-UK businesses who provide services within the UK should ensure better compliance with international trade commitments. Businesses will be able to apply all year round rather than during restricted windows only and competent authorities must provide updates throughout the application process as well as providing outcomes promptly. They will also be able to resubmit applications which must be considered properly and not simply rejected on the basis of a previous rejection. The application fee must relate only to the cost of processing the application and cannot include any other costs relating to the application (although competent authorities will be able to charge for other costs relating to the scheme once authorisation has been granted). 

In-scope service providers should benefit from the 2026 reforms, which extend the scope of the regulations to all providers regardless of nationality or establishment. Overseas providers may still be required to maintain a UK address for service (where justified on public-interest grounds).

What steps should you take? 

Providers should monitor any updated guidance ahead of the revised regulations (which are expected to take effect in October 2026). Compliance teams should check their licensing fee information to ensure the rights costs are included in the fee, and may wish to review application submission deadlines in line with the year-round submission changes.

Key takeaways 

• Monitor any updated guidance ahead of implementation. 
  

• Check your licensing fee information. 
  

• Review application submission deadlines.

A ban on retention payments: Reshaping risk allocation

The government has announced a set of measures to tackle late payments, aimed at supporting small businesses. This includes banning the withholding of retention payments – laying the foundations for addressing widespread insolvencies throughout the construction industry. 

Contributors: Caroline Cowley and Deborah Ritchie

The practice of withholding retentions has been a fixture of construction contracting in England and Wales since the 1800s. The aim is to safeguard against contractors failing to complete works or rectify defects discovered during a ‘defects rectification period’ post-completion – with construction contracts typically allowing for three or five per cent retentions on average.

Despite their long-standing history, the use of retentions has been widely criticised – and their ramifications can be far-reaching. For example:

• Retentions can be held for years after work is completed, disrupting cash flow. This affects all businesses, but is often perceived as disproportionately affecting smaller businesses.
• Insolvency of the parties holding retention sums often means retentions are never released.
• Issues in supply chains are compounded by retention issues, with main contractors using similar mechanisms in sub-contracts to share their allocation of risk.

According to recent figures published by The Insolvency Service, construction firms accounted for 17.1% of all insolvencies in England and Wales in January 2026. With the sector consistently accounting for more insolvencies than any other, the question of retention payments remains in the spotlight – and in 2025, proposals to address the issue were covered in the government’s late payments consultation.

The responses to the 2025 consultation were published on 24 March 2026, alongside an announcement of the government’s intention to move forward with a proposed ban on the practice of deducting and withholding retention payments under the terms of a construction contract. Alternatives such as utilising third-party bank accounts to safeguard monies in the event of insolvency were put forward, but the majority of respondents were in favour of a total ban. The intention of the proposed changes would be to prevent loss through insolvency, late payment, and non-payment. 

How could this impact your business?

Clearly, a change needs to be made – but whether an absolute ban is the best way to do so remains to be seen.

Until draft legislation is published, there is no clarity on timescales, the mechanism to remove retention payments beyond a suggested 12- to 14-month transitional period, or the development of alternative assurance mechanisms. Potential ramifications could include:

• A fundamental rethink of standard contracting practices arising from any ban on retention payments in new construction contracts.

• Increasing contract prices to reflect risk allocation. 

• Employers looking at alternative performance security, perhaps (if permitted) relying more heavily on performance bonds, retention bonds, guarantees and enhanced contractual defect liability provisions.

• The reduction of disputes related to delayed or withheld retention sums.

• A possible shift towards a zero-defect policy, which would allow for a more proactive approach to defect management and remove the need for retention payments altogether.

Those in the construction industry remain wary on both sides, with concerns as to whether the scope of legislation will be broad enough to prevent circumvention of the ban, and the cost and availability of any alternative forms of surety.

What steps should you take? 

The government has stated that it will introduce new legislation ‘as soon as Parliamentary time allows’ – at which point, more information will be available on the items listed above, so it is important to keep a watchful eye on progress. Given the wide-reaching ramifications, you should review the proposed legislation once available and respond to any further consultations launched by the government on this matter.

One thing is clear: removing retention payments entirely will shift the balance of risk to developers who are already shouldering the burden of increasing regulations – increasing the risk of developers seeking alternative ways of passing the risk on.

Key takeaways 

• Rethink your standard contracting practices.
• Prepare for the possibility that contract prices could increase to reflect risk allocation.
• Consider alternative methods of ensuring performance security.

EMI thresholds and holding periods set to expand from April

Upcoming changes to the Employment Management Incentive scheme will open up access for certain companies to grant share options to employees – bringing benefits for companies and employees alike.

Contributors: Meri Seiranian and Dominic Travers

From 6 April 2026, some larger companies will be eligible to grant options to their employees to buy shares under the Enterprise Management Incentive (EMI) scheme. To enable this, the current thresholds will increase as follows:

• Gross asset limits will rise from £30 million to £120 million.

• Employee numbers will increase from 250 to 500.
  
• The total value of company options will double from £3 million to £6 million. 

For eligible companies, the maximum exercise period for EMI options will increase from 10 to 15 years, with the extension available retrospectively for existing options. Additional administrative changes, including the removal of EMI grant notifications from April 2027, will also be introduced with the aim of streamlining compliance.

How could this impact your business?

The reforms allow many larger or fast-growing companies to qualify for EMI for the first time, expanding access to tax benefits. Existing EMI users will also be able to extend their option life to 15 years without losing their tax benefits – in turn giving their employees more time to exercise their options, sell their shares and realise value. 

Companies will need to review scheme rules, grant policies, and long-term incentive planning to ensure alignment with the higher thresholds. While reporting obligations remain largely unchanged until 2027, affected companies must also continue to meet the Employment Related Securities deadlines to avoid penalties.

What steps should you take? 

In light of the changes, you should assess your eligibility under the new thresholds before 6 April 2026, consider implementing or reinstating EMI schemes if you qualify, and review and amend existing EMI plans to extend the exercise period if required.

Key takeaways 

• Review your current EMI eligibility.

• Amend your existing EMI options where appropriate. 

• Update your plan rules ahead of administrative changes.

• Reassess your incentive strategy if you have previously been excluded.

Mapping out the next phase of the Data (Use and Access) Act 2025

In a fast-moving digital world, there is a careful balance to strike between innovation and compliance – and as the Data (Use and Access) Act 2025 brings with it an even tighter regulatory landscape, businesses must tread carefully to ensure compliance. 

Contributors: Charlotte Cunningham, Rheia Masih, and Lisa Sweetman.

On 5 February 2026, a number of reforms under the Act, which aim to support business innovation while maintaining strong personal data protections, came into force.

The Act constitutes the first substantive change to data protection law since GDPR came into force in 2018, and many businesses may not have reviewed their processing activities or updated internal policies since then. With the introduction of mandatory complaints procedures and additional ICO governance measures taking effect in June 2026, it is important for you to review and understand the requirements under the legislation to ensure you remain compliant.

How could this impact your business? 

The Act affects all UK organisations that process personal data – particularly those in the technology, finance, marketing and public sectors. Bringing in more flexible lawful bases for processing and clearer rules on data use, just some of the changes ushered in by the Act include:

• Updates to governance and Subject Access Request processes. 
• Automated decision-making reviews.
• Stronger enforcement powers for the ICO, including compelling interviews and technical reports.
• Clearer rights and safeguards for individuals.

What steps should you take? 

To ensure compliance, organisations should review their data policies, update their Subject Access Request processes, and prepare for the introduction of mandatory complaints procedures in readiness for 19 June 2026.

Key takeaways: 

• Roll out training for your staff.

• Monitor ICO guidance and enforcement powers.

• Prepare your complaints procedure before 19 June 2026.

• Review your Subject Access Request and automated decision-making processes.

• Update your data protection policies.

The Supreme Court resets the clock on unfair prejudice claims 

A recent Supreme Court ruling resolved two years of uncertainty and restored the long-held view that unfair prejudice petitions are exempt from statutory limitation periods.

Contributors: Abigail Nicholls-May and Fleur Turrington

Unfair prejudice petitions allow minority shareholders to challenge conduct that harms their interests and seek wide-ranging remedies, including buyouts and regulation of future affairs. For over forty years, it was understood that these petitions were not subject to the Limitation Act 1980, which imposes time limits in which certain claims can be brought.

The dispute concerned Zedra Trust Company (Jersey) Ltd (Zedra), a minority shareholder in THG Plc (THG).

In July 2016, THG distributed bonuses to four shareholders as approved by the designated shareholder majority in accordance with the company’s articles. Zedra was left out of this allocation.

In January 2019, Zedra presented a petition under Section 994 of the Companies Act 2006 which alleged unfair prejudice in the handling of the affairs of THG (but which omitted any petition in relation to the 2016 bonus allocation).

In 2022, Zedra sought to amend their petition to include allegations relating to the 2016 bonus allocation and seeking monetary compensation for their alleged loss.

However, in 2024, the Court of Appeal ruled that, as the claim dated back to 2016 and sought monetary compensation, it fell within the scope of Section 9 of the Limitation Act 1980 (which mandates that claims for sums recoverable by statute must not date back more than six years) – overturning the widely-accepted view that time limitation periods do not apply to unfair prejudice petitions.

On 25 February 2026, the Supreme Court overturned the Court of Appeal’s decision – confirming that no statutory time limitation period applies to unfair prejudice petitions, and bringing to an end two years of uncertainty.

The decision held that: 

• A Section 994 petition does not enforce a statutory obligation – meaning that it cannot be treated as an ‘action on a specialty’, and does not carry a twelve-year time limit.

• Even where monetary compensation is sought, any payment arises from the court’s discretionary powers (rather than a statutory right to recover money) – meaning that Section 9’s six-year period does not apply.

• Limitation periods cannot sensibly vary depending on the type of relief requested – as this would be inconsistent with how unfair prejudice jurisdiction operates.

How could this impact your business?

The decision reaffirms that shareholders are not barred from bringing unfair prejudice claims simply because the conduct occurred more than six or twelve years ago. However, delay still plays a role: while there is no fixed statutory limit, courts may refuse relief where a claimant’s delay is unfair to the respondent. 

What steps should you take?  

For businesses, the decision underscores the importance of long-term governance discipline and record-keeping. Decisions on share allocations, director actions or value distributions — even many years old — may still be scrutinised if disputes arise further down the line.

Key takeaways

• Remain vigilant to the risk of petitions being brought against conduct dating back a number of years.
• Maintain robust, long-term records of governance decisions.

Breaking down the first big changes ushered in by the Employment Rights Act  

Ushering in what the government describes as 'the biggest upgrade to workers' rights in a generation', the Employment Rights Act will start to have a significant and wide-ranging impact on businesses from April 2026 – and now is the time to take action.

Contributors: Clive Day and Cory Doran

Following on from changes to trade union legislation in December 2025 and February 2026, the first major reforms under the Employment Rights Act 2025 are set to take effect in April.

Just some of the notable changes include:

1 April 2026

•  Higher National Minimum Wage rates.

5 April 2026 

• Enhanced parental and bereavement entitlement.
  

5-6 April 2026 

• Day-one unpaid parental and paternity leave rights.
  

6 April 2026 

• Expanded eligibility for Statutory Sick Pay.
• Stronger whistleblowing protections with the addition of sexual harassment as a protected disclosure.
• Doubling the protective award for failing to collectively consult on mass redundancies from 90 to 180 days’ pay.
• Streamlined trade union recognition.
• Provision for large employers to implement voluntary equality action plans ahead of them becoming mandatory in 2027.
• Increase to the maximum compensation the employment tribunal can award for unfair dismissal claims (with the cap to be removed entirely from 1 January 2027).

7 April 2026 

• The establishment of the Fair Work Agency, which is set to reshape employer duties and workers’ rights.

For details of the full timeline, click here.

How could this impact your business? 

To ensure compliance with the new legislation, businesses should update their payroll to accommodate the new Statutory Sick Pay rates, along with revising their sickness, parental leave, whistleblowing and harassment policies. 

HR processes must also be updated to reflect the new day-one rights and notice rules, and large-scale restructures should be navigated carefully to mitigate the higher level of risk posed by the increased protective award. 

Unionised workplaces should prepare for easier recognition and greater access rights, while employers with more than 250 staff should begin collecting data to facilitate equality action planning ahead of mandatory reporting in 2027.

What steps should you take? 

Alongside ensuring compliance with April’s changes, employers should also start laying the groundwork for the next set of reforms taking effect from October into 2027. Key steps include updating policies, contracts and payroll in readiness for new family-friendly rights, training managers on upcoming entitlements, and beginning equality action plan work early to plug compliance gaps and mitigate financial risk.

Key takeaways 

• Familiarise yourself with April’s reforms.
• Start planning for upcoming changes in October and 2027.
• Update your key policies and procedures.

Government shake-up of planning appeal procedures looms

New regulations are set to reform the written representations process for planning appeals – presenting challenges for Local Planning Authorities and appellants alike. 

Contributors: Alan Corinaldi-Knott and Stuart Tym

From 1 April 2026, new regulations will come into force in an attempt to streamline the written representations planning appeals process

Currently, there is a streamlined process for householder appeals, advertisement appeals and minor commercial appeals – but after 1 April 2026, this will be expanded to include all planning appeals which fall under the scope of the written representations procedure. 

While applications submitted prior to 1 April 2026 (but determined on or after this date) will remain under the old procedure, any new applications after 1 April will fall under the scope of the new process.

What’s changing? 

The current appeal process generally permits appellants and the Local Planning Authority to submit statements of case and new evidence at appeal stage, which allows them to expand, clarify or strengthen arguments beyond what was submitted at the application stage. Interested parties are also given an opportunity to make representations during the appeal itself in addition to any comments previously made during the Local Planning Authority’s determination period.

For applications submitted on or after 1 April 2026, the opportunity to submit further evidence and a statement of case will no longer be available to you. Unless an exception applies, appeals will be decided on the information which has already been submitted to the Local Planning Authority at the time of determining the original application. In these cases, the Inspector will only consider the following:

• The application that the Local Planning Authority determined (including the plans, submitted reports / technical evidence and third-party comments).
• The decision notice.
• The Local Planning Authority’s committee minutes and planning officer report.
• The appeal form.
• The Local Planning Authority’s appeal questionnaire.
• An executed and certified copy of the planning obligation at the time of making the appeal (as required).

There will only be very limited exceptions to the above, such as a material change in planning policy, a relevant legislative amendment, or a significant court judgment. 

Similarly, third parties will no longer be able to make representations on an appeal determined by written representations – instead, the Inspector will only consider the representations made at the planning application stage. 

How could this impact your business?

The changes will present challenges for Local Planning Authorities and appellants alike – particularly in the event of committee overturns against a professional officer recommendation or similar.

For example, if a Local Planning Authority refuses an appeal on technical grounds, or the issue cannot be resolved between the parties, there will be no opportunity to submit further evidence at appeal unless following the hearing or inquiry procedure – in which instance, it may be necessary to re-submit the application with new evidence for the Local Planning Authority to consider, and then follow up with an appeal if a resolution still cannot be reached.

In theory, the streamlined process is intended to lead to faster appeal decisions – but whether this will actually be the case in practice remains to be seen. 

What steps should you take? 

If you envisage that your Local Planning Authority might refuse a planning application on particular grounds, it would be wise to submit a rebuttal or further evidence before a decision is made to ensure the evidence can be taken into account in the event of a refusal. 

Steps you can take to ensure these additional safeguards remain open to you include:

• Obtaining strong advice from a planning consultant.
• Undertaking thorough pre-application discussions with the Local Planning Authority and other statutory consultees to identify potential issues which need to be addressed through the planning application submission, and establish what technical reports will need to cover in order to reduce potential conflicts or substantial objections at application stage. 

In a nutshell, the changes involve a move towards a ‘submit once, submit right’ approach – meaning that the chances of securing a successful outcome at appeal will be more heavily contingent on the strength and completeness of the original application and decision documentation than ever before.

Key takeaways

• Engage in pre-application discussions with relevant bodies at an early stage.
• If you anticipate a refusal, submit further evidence or a rebuttal at the application stage.
• Seek reputable advice from a planning consultant. 
  

Government guidance proposes stringent requirements for a new land use control register  

From 6 April 2027, anyone who controls how land is used or developed will need to provide information to HM Land Registry. A significant undertaking lies ahead – and now is the time for developers and promoters to start laying the groundwork so they are ready to adapt when the landscape shifts. 

Contributor: Jamie Clarke 

As part of the government's initiative to improve transparency about land use and development, draft legislation has recently been published which proposes reforms to contractual control land agreements. The regulations will require rights holders to register details of certain types of land agreements (including conditional contracts, pre-emption, promotion, and option agreements) with HM Land Registry. This information will then be published in a searchable database from 6 April 2028. 

While the responsibility for ensuring information is registered and kept up-to-date rests firmly with the party granting the contractual right, the submissions must be made by a regulated conveyancer. 

How could this impact your business? 

Presented to parliament on 9 March, the regulations are expected to be made in the first half of 2026. 

Depending on when you enter into an agreement, different deadlines to provide the necessary information to HM Land Registry will apply. 

If you enter into an agreement before 6 April 2027 (but after the regulations are made): You will need to instruct a regulated conveyancer to submit the relevant details to HM Land Registry by 6 October 2027. 

If you enter into a new agreement, or make changes to an existing one, after 6 April 2027: You will need to ensure that the relevant information is registered with HM Land Registry by a regulated conveyancer within 60 days. 

In all cases, you must ensure that HM Land Registry is notified if your agreement comes to an end. 

What steps should you take?

The deadlines may seem like a long way off, but with failure to comply amounting to a criminal offence, now is the time to start getting the lay of the land so you are prepared ahead of the changes taking effect.

Indeed, the requirements will present a significant undertaking for developers and promoters alike. Government guidance alludes to the possibility that HM Land Registry could refuse applications for notices or restrictions to be entered onto a title register in respect of a contract until the necessary information required by the regulations has been provided.

Establishing which of your agreements fall within the scope of the regulations will provide a strong starting point. From there, you can gather all the relevant information for those agreements so you have everything in place ahead of time, and start thinking about instructing a conveyancer to make your submission when the time comes.   

Key takeaways  

• Determine whether your agreement(s) fall within the scope of the regulations. 
• Start compiling information for your agreements ahead of time.
• Instruct a regulated conveyancer to complete your submission.