On November 26th, 2025, the UK Government announced its Autumn Budget. Here is a breakdown of what it means for employers:

Minimum Wage & National Living Wage

From 1 April 2026:

Category	2026/27	2025/26
National Living Wage (21+)	£12.71	£12.21
18–20	£10.85	£10.00
16–17 & apprentices	£8.00	£7.55

Employers should:

• Monitor birthdays (when workers change age bands)
• Ensure all hours are accurately recorded
• Check that deductions do not push pay below the minimum

 

Class 1 NICs (Employees & Employers)

Employees:

• 0% on the first £12,570
• 8% on earnings from £12,571 to £50,270
• 2% on earnings above £50,270

Employers:

• 15% on earnings above £5,000 per employee
• Higher thresholds still apply for some younger workers and apprentices
• The Employment Allowance remains £10,500 for eligible employers

 

Salary Sacrifice for Pension Contributions

From 6 April 2029:

• The amount of pension contributions made via salary sacrifice that is exempt from NICs will be capped at £2,000 per year per employee
• Contributions above this cap will still receive income tax relief, but will attract NICs for both the employer and employee

 

Homeworking Expenses

From 6 April 2026:

• Employees will no longer be able to claim tax relief on unreimbursed homeworking expenses (previously, a flat £6 per week was allowed)
• Employers can still reimburse legitimate additional homeworking costs without tax/NIC, if the usual qualifying criteria are met

 

Enterprise Management Incentives (EMI)

For share options granted on or after 6 April 2026:

• Company option limit: £3m → £6m
• Gross assets: £30m → £120m
• Employee count: 250 → 500
• Maximum holding period: 10 → 15 years

From April 2027, the EMI notification requirement will be removed.

This creates more flexibility for growing businesses using share options to attract and retain key staff.

 

Workplace Benefits – Wider Tax Relief

From 6 April 2026, the existing exemption will extend to reimbursements for:

• Eye tests
• Homeworking equipment
• Flu vaccinations

These can be provided without extra income tax or NIC for employees.

 

Company Cars & Benefits in Kind (BIK)

Key points for employers:

• Bringing Employee Car Ownership Schemes (ECOS) into the normal BIK rules is delayed from 2026 to 6 April 2030, with transitional rules until April 2031
• There is a temporary BIK easement for qualifying plug-in hybrid electric vehicles (PHEVs) from 1 January 2025 to 5 April 2028 to avoid steep tax jumps due to new emissions standards
• BIK charges for vans and fuel for cars/vans will increase in line with inflation from April 2026

 

Mandatory Payrolling of Benefits

From April 2027, most benefits in kind will need to be:

• Reported and taxed through payroll in real time, not via P11D forms

HMRC has already released draft guidance and encourages employers to:

• Check their payroll software
• Review processes
• Prepare early to avoid disruption

 

PAYE & Umbrella Companies

From 6 April 2026:

• Employment agencies (or end clients where there is no agency) will be jointly and severally liable for PAYE obligations in umbrella company arrangements.

This is relevant to businesses using umbrella companies for contract labour.

 

Loan Charge Settlement Opportunity

Disguised remuneration schemes and the loan charge remain a live issue across the UK.

The government is introducing a new settlement opportunity:

• Everyone who comes forward will get £5,000 knocked off outstanding loan charge liabilities
• Many individuals may see their bill reduced by at least 50%
• Around 30% could settle with no further tax to pay

This applies retrospectively from 5 April 2019. If you or your workers have ever used such arrangements, now is the time to seek advice.