WorkforceandStaffingImpactBrief
The Government’s Autumn Budget 2025 brings in a set of financial and compliance changes that will reshape how employers hire, pay, and manage staff over the next few years.
Ifyourelyontemporaryworkers,permanenthires,orboth,theseupdateswillinfluenceyour labourcosts,payexpectations,andworkforceplanning.
Here’s a clear breakdown of what’s changing, when it’s happening, and what it means for you.
Keychangesannounced:
Here are the changes that will have the biggest impact on your staffing and workforce costs.
IncreasestotheNationalLivingandMinimumWagerates NewPAYEandNICrulesfortheumbrellacompanymarket FreezesonincometaxandNationalInsurancethresholds AfuturecaponNIC-freepensionsalarysacrifice
Fundingtoboostyouthemploymentandentry-leveltalent
Eachofthesewillaffectcosts,compliance,andthewayyoustructureyourworkforce.
From6 April2026-UmbrellaCompanyPAYEandNationalInsurance ContributionLiabilityReform th
New rules mean that from 6 April 2026, if a worker is supplied through an umbrella company, the recruitment agency – or if there is no agency in the chain, the end client –becomes legally responsible for PAYE and employer NIC if the umbrella fails to do it correctly. The Government is also introducing powers that allow for joint and several liabilityacrossthesupplychainforunpaidemployerNIC th
Thismeans:
Highercomplianceresponsibilityforagenciesandenduserclients. ExposureifanumbrellamishandlesPAYE/NIC.
Considerations: Ensure your temporary workforce are paid directly via a PAYE model – and prepareforpotentialcostincreasesifthisisnotcurrentlythecase.
Review all umbrella partners, and agency providers who use umbrella partners now–don’twaituntil2026.
Buildthesecompliancechecksintoyourupcomingtenderreviewsandyourworkforce planningandengagementprocesses.
From6 April2026-NationalLivingWageandMinimumWageIncreases th
FromApril2026thenewNLW/NMWwageswillbe:
Workersaged21+
Workersaged18-20
Workersaged16-17andApprentices
Thismeans:
£12.71(increaseof£0.50/4.1%)
£10.85(increaseof£0.85/8.5%)
£8.00(increaseof£0.45/6%)
Ahigherbasecostfortemporaryworkers. Rateupliftsfromagencysuppliers.
Considerations:
ReviewtemporaryworkerbudgetswellaheadofApril.
Update internal pay bands to remain competitive – you may also face upward pressureacrossadjacentpaybands,notjustminimumwageroles.
Talktoyourrecruitmentpartnersearlytoavoidlast-minutecostshocks–we’reready to chat this through now, but finalised charge-rate numbers will be confirmed once theAssociationofLabourProviders(ALP)publishesitsguidanceinFebruary.
2026-2031-EmployerNationalInsuranceThresholdFreeze
TheemployerNICthresholdisfrozenuntilApril2031.Aswagesrise,moreearningsfallwithin NICliability.
Thismeans:
EmployerNICincreasesyear-on-year. Thetotalcostoftemporarylabourrises,evenifheadlinepaystaysthesame.
Considerations:
BuildNICdriftintolonger-termworkforcebudgets.
Considerwhereflexiblestaffingcanhelpyoumanagecostpeaks.
FromApril2026-YouthEmploymentandSkillsFunding
The Government has committed around £1.5 billion over the spending review period to supportyouthemploymentandskillsdevelopment.Thisincludes:
A new Youth Guarantee, offering six-month paid work placements for eligible 18-21year-oldswhohavebeenoutofworkortrainingforatleast18months.
A reformed Growth and Skills Levy, designed to fund shorter, more flexible training –withsomeemployer-accessiblecoursesexpectedtobeginfromApril2026.
Broader reforms to apprenticeships and early-career routes, intended to expand accesstoentry-levelworkandtraining.
The Government has not yet published full operational guidance for employers – but furtherdetailisexpectedduring2026.
Thismeans:
Potentialincreaseinjuniorandentry-levelcandidatesfrom2026onward.
Some sectors may see improved access to newly trained workers from short courses fundedundertheGrowthandSkillsLevy
Considerations:
Expect a gradual rollout, with availability varying by region and training provider – so factor this into medium-to-long-term workforce planning rather than short-term hiringneeds.
KeepaneyeonupdatesfromSkillsEngland,DWP,andHMTreasuryasimplementation detailsemerge–thesewillshapehowquicklyjuniortalententersthemarket.
Consider where entry-level placements or upskilled talent might fill gaps in highturnoverorlower-skilledrolesonceschemesarelive.
FromApril2026-EnterpriseManagementIncentive(EMI)SchemeExpansion
The Government is widening access to the EMI share-option scheme. From 6 April 2026, morebusinesseswillqualifybecause:
Theemployeelimitdoublesfrom250to500employees.
Thegrossassetslimitjumpsfrom£30mto£120m.
Themaximumunexercisedoptionsacompanycanholdincreasesfrom£3mto£6m
The exercise window extends from 10 years to 15 years, and this can apply retrospectivelytoexistingEMIoptions(aslongasthey’restillactive).
The rest of the EMI rules stay as they are, including the qualifying trade tests, but these thresholdsmeanmanymoreestablishedorscalingcompaniescannowuseEMI.
Thismeans:
EMI becomes a realistic option for businesses that previously “outgrew” eligibility.
Employers gain a stronger tool for attracting and keeping specialist, senior or indemandtalent.
Companiesmayleanmoreonequityaspartoftherewardpackage,especiallyifcash salarypressurerisesduetominimumwageandNICchanges.
Considerations:
If you’re growing, it’s worth reviewing whether you now qualify, even if EMI wasn’t an optionbefore
EMImayhelpoffsetincreasedwageexpectationsorrisingemploymenttaxesoverthe nextfewyears.
Make sure scheme design and administration are handled properly – EMI is taxadvantaged,butonlyiftherulesarefollowed.
FromApril2026-EnterpriseManagementIncentive(EMI)SchemeExpansion
Personal Allowance, Higher-Rate Threshold and employee NIC thresholds remain frozen untilApril2031.
Thismeans:
Moreemployeespushedintohighertax/NICbrackets.
Reducedtake-homepayovertime(“fiscaldrag”).
Higherexpectationsduringpayreviews
Considerations:
Planforstrongersalary-upliftpressureincomingyears. Usebenefitsandrewardframeworkswherepossibletosupportretention.
Monitorengagementinlower-paidroles–thosewhofeelthesqueezefirst.
2026-2031-EmployerNationalInsuranceThresholdFreeze
Personalallowance,higher-ratethresholdandemployeeNICthresholdsremainfrozenuntil April2031.
Thismeans:
YouremployerNICbillwillincreaseassalariesdriftupwards MoreroleswillsitabovetheNICthresholdeachyear.
Considerations:
BuildNICdriftintomulti-yearcostplanning.
Revisitheadcountbudgetstoaccountforrisingcosts.
April2029-Salary-SacrificePensionNationalInsuranceCap
From April 2029, both employers and employees will face a new limit on the National Insurancereliefavailablethroughsalary-sacrificepensioncontributions.
NIC-exempt salary-sacrifice pension contributions will be capped at £2,000 per employeeperyear.
AnycontributionsabovethiscapwillattractbothemployerNICandemployeeNICat thestandardrates.
This change mainly affects higher earners or anyone making larger pension contributions viasacrifice
Thismeans:
Increased employer NIC costs for staff who currently sacrifice more than £2,000 per year, whilst high-earning staff may see reduced tax efficiency on contributions above thecap.
Existing reward structures based on pension sacrifice become less cost-efficient, and it may influence employee expectations around reward, bonuses, and benefits packages.
Considerations:
Identifywhichemployeesusesalary-sacrificeabovethe£2,000threshold. Reassessyourrewardandbenefitsofferforseniortalentaheadof2029.
Communicateearlyandtransparentlysostaffunderstandhowthey’reaffected.
FactortheadditionalemployerNICcostintolong-termworkforcebudgeting.
Youdon’tneedtowaituntil2026–planningnowwillputyouahead.Here’swheretostart: Refreshstaffingbudgetsfor2026-2031.
FactorminimumwagerisesandNICdriftintomulti-yearforecasts. Buildplannedratereviewsintoyourconversationswithstaffingpartners. Prepareforhigherexpectationsaroundpayandtake-homeearnings.
Ifyouwanttotalkthroughanyofthis,fromratestoworkforceplanning,we’rehere.
The changes in this Budget will reshape staffing costs, compliance responsibilities, and workforceplanningacrossthenextfiveyears.
Whether you’re looking to understand the impact on temporary staffing, prepare for umbrella compliance changes, or rethink your pay and benefits approach, we’re here to supportyoueverystepoftheway.
Yourworkforcematters-let’snavigatethistogether.
Let’stalk.