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On Wednesday 28 October 2026, Chancellor John Healey delivered his Autumn statement. Describing it as “a Budget for British businesses, big and small”, he announced a number of different measures, of which we’ve summarised the key proposals affecting UK employers.
Among the many different measures announced in the Autumn Budget, here are the key changes employers should be aware of.
The National Minimum Wage and National Living Wage will rise by 3.9% from April 2027. Workers aged 21 and over (currently earning £12.71 per hour) will see their pay rise to £13.21 per hour. Hourly pay for workers aged between 18-20 (currently £10.85) will rise to £11.27. These rises come into effect from April 2027, and are worth building into your 2027/28 payroll budgets now.
Parental pay will be extended to include self-employed fathers and partners who have previously missed out, making them eligible for two weeks of support currently worth up to £194 a week. Your business may see an increase in leave and pay queries, so it’s worth checking your family-friendly policies and communications once the detailed rules are published.
The temporary 55p per-mile tax-free approved mileage rate for the first 10,000 business miles is being made permanent, while the rate for additional business miles above 10,000 will increase from 25p to 35p per mile from 6 April 2027. If you reimburse business mileage, this should reduce the tax burden on your people and may affect your expense policy.
Tax-advantaged employee share schemes are being expanded to help growing businesses recruit and retain talent. We’ll look at what this means for your reward strategy once the full detail is available.
The government will legislate so that non-compete clauses are no longer a barrier to hiring for promising start-ups and scaling firms, and will start to look at the wider use of restrictive practices. A detailed position is expected in early 2027, so it’s worth reviewing your own policies in the meantime.
Planned reforms include changes to visa salary requirements, a wider High Potential Individual visa, a two-year Graduate visa for eligible universities, and longer for the highest-skilled workers to find a new job. These may make international hiring easier.
The government will act on calls for greater pay transparency in job adverts, designed to help close the gender pay gap. While this is just a commitment to change rather than new legislation, it’s worth getting ahead of things if you have upcoming recruitment plans.
The small business rates relief threshold will rise from £12,000 to £18,000 for businesses in the retail, hospitality and leisure sectors. This change will be funded by greater taxes on gambling, and will provide a tax break to 70,000 smaller firms. Properties will see bills frozen in real terms, reduced or cut to zero, but vape shops and adult gaming centres will lose certain reliefs.
From April 2027, the British Industrial Competitiveness Scheme will cut electricity bills by up to 25% for over 10,000 eligible businesses in electricity-intensive sectors.
The 5p fuel duty cut is extended for a further six months, and the planned RPI increase is deferred to 1 July 2027. Prices at local, lower-powered public EV chargers will also be cut, which may matter if you run a fleet or company cars.
A package of support for entrepreneurs has been announced, including a 10% tax rate on lifetime gains of up to £10 million for founders of successful British firms. Female founders will benefit from a new scale-up programme, while the British Business Bank will double its current commitments to £200 million of support to women-led businesses.
The “Better Regulation Executive” will be re-established in order to reduce admin burdens on business and workers. Originally established in 2005, the Better Regulation Executive was set up to cut unnecessary regulatory pressure on businesses, while still maintaining essential protections.
From October 2027, online marketplaces (such as Amazon and eBay) will be responsible for collecting VAT on qualifying sales by UK businesses using their platforms.
Cost of living remains a major driver of employee stress, and several measures announced in the Budget may help your employees with day-to-day living costs.
Households in council tax bands A to D in England will receive a one-off £100 payment directly into bank accounts to help with energy payments. The temporary VAT cut on electricity bills will also be extended to 1 July 2027.
A new ISA for first-time home buyers will be introduced, along with an immediate cut to the Lifetime ISA withdrawal charge at 20%.
A new Pension Tax Allowance means people over the State Pension age (or who will be within the tax year) with income at or under the value of the full new State Pension (£13,036.40 for tax year 2027/28), will not start paying income tax. This allowance will apply for tax years 2027/28, 2028/29, and 2029/30. This may be relevant for older colleagues planning retirement.
Tax rates on savings and property income will increase by a further two percentage points. However, the government says 84% of taxpayers will see no increase in their tax bill, and the £20,000 cash ISA limit is preserved.
The latest Budget was milder than anticipated for many employers. However, there are currently no plans to roll back previously announced changes such as the cap on Salary Sacrifice Workplace Pension contributions.
From April 2029, the National Insurance savings from Salary Sacrifice (also known as Salary Exchange) will be limited to the first £2,000 of employees’ pension contributions through Salary Sacrifice.
While it will trim some NI advantages for those contributing over £2,000 a year, this contribution method remains a valuable tool which should stay part of your wider employee benefits strategy.
Salary Sacrifice isn’t going away. Even after April 2029, this method will continue and employees can benefit as normal from the income tax savings. However, the National Insurance savings will be limited to the first £2,000. Your business still has more than two years of uncapped savings ahead, and meaningful savings will continue beyond 2029.
For businesses that want to control costs, support employees, and remain competitive Salary Sacrifice remains a commercially sensible option. Our specialist advisers are on-hand to help you revamp the structure of your Salary Sacrifice, meaning you still get the maximum benefit possible out of it.
The latest Budget brings both opportunities and challenges for business owners. Navigating these shifts while keeping your workforce motivated and costs under control can be complex.
Our consultants can help you get the most out of your rewards, while protecting your bottom line and attracting top talent. If you’d like to discuss how any of this affects your employee benefits strategy, reward budgets or team communications, call 02084327333 or submit an enquiry to start making the most out of your benefits.
Employee benefits can be a headache. But our specialists do this day-in, day-out, offering first class service when you need it most. Here’s why you should talk to us:
If you are unhappy with our service, we have a complaints procedure, details of which are available upon request. If you are unhappy with how your complaint has been dealt with, you may be able to refer your complaint to the Financial Ombudsman Service (FOS). The FOS website is www.financial-ombudsman.org.uk.
Drewberry is a trading name of Brown & Brown Health and Employee Benefits Ltd which is authorised and regulated by the Financial Conduct Authority. FCA Number 312878. Registered in England and Wales (company number 3910149). Registered address: 7th Floor, Corn Exchange, 55 Mark Lane, London, EC3R 7NE.
