Chancellor John Healey’s first UK Budget set out a range of measures affecting individuals, businesses and employers, with a stated focus on providing ‘breathing space’ for households and businesses. While several announcements focused on the cost of living, the Budget also included changes to tax, payroll and reporting requirements that bookkeeping and payroll professionals need to understand.
As with previous UK Budgets, the 2026 announcement included several measures that attracted significant public attention, including:
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Reduced shopping costs: The suspension of tariffs on selected everyday items, with the potential for savings to be passed on to consumers.
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£100 Household Energy Payment: A payment for eligible households in England, due to be introduced from January 2027.
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Changes to gas standing charges: The removal of gas standing charges, alongside an increase in unit prices.
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Pensions Tax Allowance: The introduction of an enhanced Personal Allowance, targeted at individuals over State Pension age.
Alongside these measures, the Budget introduced a number of changes with direct implications for bookkeeping and payroll professionals. These include:
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National Minimum Wage and National Living Wage: Increased rates from April 2027.
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Mileage Allowance Payments: Changes to mileage allowance rates, also from April 2027.
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Making Tax Digital (MTD): Further developments in the rollout of MTD for Income Tax for 2027/28, including transitional penalty arrangements and exclusions.
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Benchmark scale rates: Updates to UK benchmark scale rates and overseas scale rates from April 2028.
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Employment expenses: Removal of the £2,500 threshold for employment expenses from April 2028.
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Income Tax Self Assessment: Changes requiring taxpayers to make more frequent payments on account to HMRC from April 2029.
For Bookkeepers
Bookkeeping and payroll professionals should review the relevant changes, consider when they will take effect and prepare to support clients in meeting their ongoing compliance obligations. ICB will cover the relevant topics in our dedicated report for members and cover all you need to know at The Bookkeepers Summit in November.