Autumn Budget 2026 - What It Means For Employers

On 28th October 2026, John Healey announced his first budget as Chancellor of the Exchequer.

He started by setting the scene - the budget was being announced at a time when “global uncertainties and pressures are swirling worldwide and hitting people at home.” But he also said there will be a new approach and this will give people fresh hope for Britain’s future.

As an employer, do you feel that the budget announcement gave you fresh hope? This might depend on the size of your business and the sector you are operating in.

Let’s take a look at some of the main takeaways from the budget announcement that could affect employers - the positives and the negatives.

Young People & Employment

It is widely known that there is a serious issue in the UK with the high number of young people who are neither in work nor education - ‘the Neet crisis’. 1 million young people aged 18-24 are now classed as Neet (Not in Education, Employment or Training).

Whilst employers can try to do their bit in focusing more on getting young people to fill roles, a white paper is expected before the end of next year after a review of youth unemployment by Alan Milburn.

The review will recommend investing in jobs and Apprenticeships for the under 25s and a change in the way wealth, health and welfare systems work so that young people are not plunged into a life on benefits.

Transport

A Freeze In Fuel Duty

For the 16th year in a row, a freeze on fuel duty was announced. While this might not have come entirely as a surprise for you as an employer, it must still be a welcome announcement. This will especially be the case for those of you who have delivery vehicles or other forms of transport as part of your set up.

Higher Mileage Rate Increase

For people who use their cars for work, the higher mileage rate - anything over 10,000 miles - was increased from 25 pence per mile to 30 pence per mile and this will come in in April 2027.

For drivers below 10,000 miles, this stays at 55 pence per mile.

Wage Increases

If you are an employer who employs staff who are earning the National Living Wage and the National Living Wage then this is an area where you are going to be affected.

You know staff need to be paid fairly and earn enough money to live more comfortably but you also need to have a successful business that can afford to operate and keep the staff you already have in employment.

For those of you who are operating SMEs where you have a number of staff doing entry level jobs, any increases to the National Living Wage and National Minimum Wage could hit you hard.

Chancellor John Healey announced that there will be an increase in both wage brackets and they will rise by 3.9% in April 2027, taking the National Living Wage above £13 per hour.

• In April 2026, the National Living Wage for over 21s was set at £12.71 per hour from April 2026. From April 2027, this hourly rate will rise to £13.21 per hour.
• Meanwhile, the National Minimum Wage for people aged 18-20 years old was set at £10.85 per hour from April 2026. From April 2027, this hourly rate will rise to £11.27 per hour.

These rises will affect around 2.3 million workers who are earning those minimum rates.

And, as an employer, you could find you are also dealing with a follow on effect from this rise as your staff who are in more senior positions with more responsibility will expect their salary to reflect that.

Along with the increase in National Minimum Wage and National Living Wage, you will need to factor in raises in holiday pay, overtime rates where applicable and also pension contributions. Employers will also need to budget for these.

If you are employing 16-17 year olds and Apprentices, hourly rates for these groups are yet to be published.

Tax Break For Some Smaller Firms

If you are an employer with a small business then you might be welcoming the announcement of a tax break by the Chancellor.

70,000 smaller firms could benefit from this and you might be an employer at one of those firms - your business will be taken out of business rates altogether, giving you some much needed breathing space.

Businesses that will benefit from this small business rate relief are those that are operating in the retail, hospitality and leisure sectors. Adult gaming centres and vape shops will not qualify for this rate relief.

The threshold for business rate relief for small businesses will increase from £12,000 to £18,000 and lowers your property tax burden. It is hoped this will be a boost to the UK’s struggling high streets.

If you are operating a pub, social club or particular type of music venue, then you will receive an extra 20 per cent relief and this brings your total relief package to 35 per cent for 2027-28 and 2028-29.

Naturally, there are critics of this measure as these tax breaks only apply to businesses operating in the retail, hospitality and leisure sectors. If you are operating and employing staff in a small business in sectors such as office-based services, trades and manufacturing, then your rates will remain the same.

Lots of small businesses like to employ students and young people to give them experience of the workplace but have explained that this can be difficult in the current climate where overall business labour and operational costs continue to rise. Small business owners will feel this as the minimum wages for staff have also increased and there is no support in many areas for increasing energy costs.

The FSB (Federation of Small Businesses) has said that the Chancellor’s Budget has done little to address high energy bills or ways to make hiring more staff more affordable. There are calls for targeted help for employers with regards to taking on additional staff with a suggestion from some for a temporary National Insurance rebate to encourage more recruitment.

FSB research has found that 47 per cent of smaller businesses expect to shrink in the coming months whilst 22 per cent are expecting growth.

Investment

The Chancellor, John Healey, also announced a series of measures where there will be government investment and a bit of help for new entrepreneurs.

Entrepreneurs

The Prime Minister, Andy Burnham, has talked about this on his social media channels and described the measure in terms of those of you with ‘side hustles.’

If you have a side hustle that you would like to grow and eventually turn it into a business where you can employ people, then you now have a bit of extra leeway. You can earn £3,000 tax free annually rather than the previous £1,000.

For young entrepreneurs, a new Young Entrepreneurs Allowance will also cover a year of living costs for young founders.

Rolls Royce Investment

Jobs should be secured and created as the Chancellor announced that the Government would support Rolls Royce in the development of the next generation of single-aisle passenger planes - those that take many of us away on our European holidays - and military planes in the UK.

This is a £2.5 billion deal which means the jets will be built in the UK for decades, creating tens of thousands of jobs.

3,300 people are currently employed in this sector, so those jobs will be secured and there is potential of tens of thousands of jobs to be created beyond that.

This is part of the government’s drive towards reindustrialisation.

Smaller Investments

Wherever you are based as an employer, you could benefit from some of the smaller government investments around the country that the Chancellor announced.

We know that the Prime Minister is a supporter of greater devolution and some of these announcements demonstrate that support.

The Guardian highlighted the following investments:

• Stafford - £10 million for a new market hall
• Bristol - £10 million towards the redevelopment of the Temple Hall area
• Plymouth - £3 million to help young people secure jobs in the defence sector
• Leeds - £50 million grated to upgrade the Leeds College of Building

Amongst other measures, mayors will be given the power to introduce overnight visitor levies - tourist tax - to fund local priorities.

This could benefit you as an employer if you are operating in a sector deemed to be a part of the local priorities.

However, the downside to this is that if you are an employer in the hospitality industry, you could be one of the many who strongly opposed visitor levies.

200 hospitality bosses from major brands have lobbied against the government on this matter because they say people are already stretched so introducing visitor levies could cost tens of thousands of jobs and millions (10 million) fewer visits.

Are You Affected By The Chancellor’s Budget Statement?

As an employer, how has the Budget Statement affected you? Would you like to see more provisions made for the employment of young people, giving them valuable experience of the workplace and the opportunity to build their skills?