When Was the Autumn Budget Announced?
The Autumn Budget 2025/26 was officially announced on Wednesday 26th November 2025 by the Chancellor of the Exchequer, Rachel Reeves. This annual statement sets out the government’s fiscal plans for the upcoming financial year, including tax policies, spending priorities, and measures to support businesses and households.
For small businesses and HR teams, the timing is crucial. Announcements made in November typically come into effect from April of the following year, giving organisations a short window to prepare for changes such as minimum wage increases, National Insurance adjustments, and employment law updates. Acting early ensures compliance and avoids last-minute payroll disruptions.
Key Announcements from the Autumn Budget 2025
The Chancellor’s Autumn Statement introduced several measures aimed at supporting growth and easing cost pressures for businesses. Here are the headline changes:
1. National Insurance Contributions (NIC)
- Employee National Insurance Contributions rate cut by 1% from April 2026, improving take-home pay.
- Employer NIC threshold frozen, meaning businesses won’t see immediate relief on their contributions.
2. Income Tax Bands
- Personal allowance remains frozen until 2028.
- Higher-rate threshold unchanged, which may impact employees’ net income as wages rise.
3. Minimum Wage Increase
- National Living Wage rises to £12.10 per hour from April 2026.
- Apprenticeship and youth rates also increase, reinforcing the government’s commitment to fair pay.
4. Business Tax Reliefs
- Annual Investment Allowance maintained at £1 million, encouraging SMEs to invest in equipment and technology.
- Enhanced R&D tax credits for small businesses investing in innovation.
5. Skills and Training Investment
- £1.5 billion allocated to digital skills and apprenticeship programmes, aimed at closing the skills gap.
6. Energy and Sustainability Support
- New Green SME Grant Scheme introduced, offering up to £10,000 for businesses investing in energy-efficient upgrades.
7. Employment Law Updates
- Flexible working rights extended, giving employees the right to request flexibility from day one.
- Additional funding for parental leave support programmes.
What These Changes Mean for Small Businesses
The Autumn Budget 2025/26 brings both opportunities and challenges for SMEs. Here’s what you need to consider:
Payroll Implications
The NIC reduction for employees is positive news, but the frozen employer threshold means businesses won’t see cost savings. Combined with the minimum wage increase, payroll costs will rise for many SMEs. HR software can help automate these updates, ensuring compliance without manual recalculations.
Budgeting and Forecasting
With wage increases and unchanged tax thresholds, SMEs need to factor in higher employment costs. However, the continuation of investment allowances and R&D credits offers a chance to offset some of these expenses through strategic investment.
HR Strategy
The rise in minimum wage could impact recruitment and retention strategies, particularly for sectors reliant on lower-paid roles. Employers may need to revisit pay structures and consider how to maintain competitiveness without compromising profitability.
Compliance
Flexible working rights and parental leave funding signal a continued focus on employee wellbeing. HR teams should update policies and ensure managers are trained to handle requests fairly and consistently.
Practical Steps for HR and Payroll Teams
To stay ahead of these changes, SMEs should:
- Review payroll software to ensure it can handle new NIC and wage rates.
- Communicate changes clearly to employees, particularly around pay and flexible working rights.
- Update contracts and policies to reflect employment law updates.
- Explore government incentives for training and sustainability to offset rising costs.
- Plan for April 2026 now, incorporating wage increases into budgets early.
Expert Insight
"The Autumn Budget 2025/26 reflects a balancing act between supporting growth and maintaining fiscal discipline. For SMEs, the key is preparation. Rising wage costs and compliance changes can feel daunting, but with proactive planning and the right tools, businesses can turn these challenges into opportunities for innovation and employee engagement." — Matt Crook, General Manager at Access People SMB
Final Thoughts: Preparing Your Business for 2026
The Autumn Budget 2025/26 brings a mix of cost pressures and growth incentives for small businesses. While payroll and compliance changes require careful planning, measures like investment allowances and skills funding offer valuable opportunities. By acting now, and leveraging HR software to stay compliant, SMEs can ensure they’re ready for April 2026 and beyond.
Discover how PeopleHR can help your business stay ahead of these changes with our quick four minute demo, or contact our team of experts to learn more.
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