Six changes employers need to plan for after the Autumn Budget 2026/2027

Prime Minister Andy Burnham's Government has left headline income tax, National Insurance and VAT rates alone. The employer changes sit in three areas: minimum pay, business mileage and employment law. Some are fixed, others are still intentions, so sort them by date before acting.

Our look back at last year's Budget covers the announcements from the previous November, if you want the comparison. We also covered the 2025 autumn Budget in a blog post the year before.

Some changes have set dates. The National Living Wage and the mileage rate above 10,000 miles are the nearest, and both fall in April 2027. Other changes are still the Government's intentions. The unfair dismissal changes apply only once they are implemented, so their dates could move. Check GOV.UK before you change contracts, policies or payroll settings for any intended change. Our Employment Rights Act 2025 hub tracks the wider set of changes by date.

Two employment law changes are not part of the Budget, but they take effect on 30 October 2026. Employers must now take all reasonable steps to prevent sexual harassment, and they can be held liable for harassment by third parties such as customers or suppliers. Trade unions also gain stronger rights of access to workplaces.

Six changes from the Autumn Budget 2026 are worth planning for now. Each has its own section below, with the expected date and an action point

1. The National Living Wage rises to £13.21 from April 2027

From 1 April 2027, the National Living Wage for workers aged 21 and over rises by 3.9%, from £12.71 to £13.21 an hour. That is an increase of 50p an hour. GOV.UK's national minimum wage rates page sets out the new rate alongside the other statutory rates. The Government estimates that a full-time worker on the rate will gain around £910 a year before tax.

• Action point: Identify which employees move onto the new rate and when. Leaving this until March would turn it into a rushed task at the end of the tax year. Our payroll compliance guide includes a checklist item on minimum wage checks you can reuse.

2. Younger workers and apprentices also get a rise

The rate for 18 to 20-year-olds moves to £11.27 an hour. The rate for 16 to 17-year-olds and apprentices moves to £8.31 an hour, as listed on GOV.UK's national minimum wage rates page. Apprentice rates depend on the apprentice's age and how far through the apprenticeship they are.

• Action point: Check each apprentice record against those conditions before April, and build the change into the next staffing budget.

3. Mileage above 10,000 business miles rises to 35p

The Treasury's press release of 26 October 2026 confirms that the 55p rate for the first 10,000 business miles has been made permanent. The rate for business miles above 10,000 rises from 25p to 35p. CIPP's summary of the change gives 6 April 2027 as the expected start date.

• Action point: If staff use their own cars for work, review your expenses policy now. Check that your payroll set-up can apply both rates and that claims separate the two bands.

4. Unfair dismissal protection begins after six months

The Government intends to cut the qualifying period for ordinary unfair dismissal claims from two years to six months. The GOV.UK unfair dismissal factsheet describes the change as taking effect on implementation. DLA Piper's analysis of the unfair dismissal changes treats 1 January 2027 as the intended start date. Once the change takes effect, employees with six months' service can bring a claim. Our Employment Rights Act guide covers the timeline in more detail.

• Action point: Check probation reviews, early performance processes and dismissal paperwork now. Early-stage dismissals are likely to attract closer scrutiny once the qualifying period is shorter. Our probationary period guide sets out what a fair process looks like.

5. The compensation cap for unfair dismissal goes

The Government also plans to remove the statutory cap on the compensatory award for unfair dismissal, on the same intended date. The GOV.UK factsheet confirms the removal, and DLA Piper's briefing sets out the wider effect.

A dismissal that goes wrong could now carry a much larger financial cost, particularly for senior or long-serving staff.

• Action point: Review settlement offers for senior and long-serving staff now, because large awards are no longer limited by a fixed ceiling.

6. Written reasons for dismissal from six months

The right to ask for written reasons for dismissal is also due to fall to six months' qualifying service, on the same intended date. The GOV.UK factsheet covers this point alongside the qualifying period.

• Action point: Keep dismissal records in a form that lets managers produce clear written reasons quickly.

Non-compete clauses

The Government has said it will legislate on non-compete clauses, but the details are not yet clear. Treat this as a watch item rather than something to plan for now.

• Action point: Check GOV.UK for the detailed proposals before changing any contract templates.

Pay transparency

The Chancellor said the Government will act soon to make sure women are paid and promoted fairly. He also pointed to pay ranges in job adverts. City AM reports the plans, but no timescale has been set. Our pay transparency guide explains what currently applies.

• Action point: Make sure every live vacancy has a documented pay range, so you can publish it quickly if the rules arrive. Do not change adverts yet.

Paternity pay for self-employed parents

The Government plans to give self-employed fathers and partners two weeks of parental pay, worth up to £194 a week. Some reports suggest April 2029 as the start date, so confirm it on GOV.UK before relying on it. The Treasury's pre-Budget announcement sets out the intention.

• Action point: Nothing changes for payroll yet. Keep your statutory paternity pay guidance accurate for employees under the current rules.

Budget speeches, including this autumn budget, often talk about cutting red tape, but that talk does not necessarily change the timetable for employment law changes already in progress. Check the current dates before you plan around any of them. Roundups of the autumn budget UK changes are useful for orientation, but confirm each date on GOV.UK before you act on it.

Three steps will cover most of the preparation:

• Update the April 2027 pay rates and check apprentice records.
• Review your expenses policy and mileage payments.
• Review your harassment policies against the stronger duty that applies from 30 October 2026.
• Check probation, performance and dismissal processes against the January 2027 intended start date.

Check your pay records against the enforcement priorities in our Fair Work Agency guide as well.

For most employers, the changes matter less for the headline rates and more for the records behind them. Pay, mileage and dismissal records all need checking before April 2027, and starting early leaves more time to get them right.

HR software that holds this information in one place makes those checks quicker, and PeopleHR can help to keep it current as each date approaches. Watch our 4-minute demo to see how the software works, or contact us to talk through your set-up before the new rates take effect.