The Autumn Budget was delivered on 28 October. Over the next few days you will read a great deal about what it means. The useful question for a managing director is narrower: what, if anything, changes the decisions you are about to make on pricing, margins and hiring for 2027? Start with what actually changed, then work through five questions with your leadership team.
What the Budget actually changed
Chancellor John Healey's first Budget left the headline rates of income tax, National Insurance and VAT where they were. For most established businesses, three measures matter.
- Wage costs rise in April. The National Living Wage goes up 3.9%, from £12.71 to £13.21 an hour, from 1 April 2027. The rate for 18 to 20 year olds rises to £11.27. For a full-time employee on the National Living Wage that is roughly £975 a year more, before employer National Insurance and pension contributions.
- Investment gets more generous upfront relief. The main first year capital allowance rises from 40% to 50% from 1 January 2027, so more of the cost of qualifying plant and machinery comes off your profits in the year you buy it.
- Business rates fall for smaller high street premises. In England, retail, hospitality and leisure properties with a rateable value up to £18,000 (up from £12,000) pay no business rates from 1 April 2027, with tapered relief up to £21,000. Other sectors are not covered by this change.
Two more are worth knowing if you own the business. The lifetime limit for Business Asset Disposal Relief falls from £1 million to £500,000 from April 2027, and a new Founders' Relief is proposed for qualifying growth companies, still under consultation. Separately, the plan to make small companies file their profit and loss accounts at Companies House has been paused. If any of these affect you, check the detail with your accountant. This article is general information, not tax advice.
1. Do our costs change – and by how much per employee?
Start with the hard numbers. The National Living Wage rise is the one that reaches almost every employer, and it pushes up the pay bands built on top of it. Translate it into pounds per employee and per month for your business, not percentages in a headline. That figure is what should inform pay reviews, pricing and whether a planned hire still stacks up. Guesswork here is expensive in both directions.
2. If costs rise, do we raise prices – and how do we present it?
Cost pressure was already pushing firms toward price rises before the Budget: the British Chambers of Commerce found 43% of businesses expected to raise prices in the three months ahead, with labour costs the single biggest driver. The question is rarely whether to raise prices but how to do it without losing your best customers. Give notice, explain the value rather than apologising for the price, and consider raising selectively on your most in-demand services rather than across the board. How you frame and present a rise often matters more than the number itself.
3. Is our hiring plan still right for the January rules?
One change is already locked in regardless of the Budget. From 1 January 2027, the qualifying period for unfair dismissal falls from two years to six months, and the compensation cap is removed, under commencement regulations made in June 2026 (SI 2026/559). In practice that means probation, onboarding and performance reviews for new hires need to be sharper and earlier: you will know far sooner whether someone can do the job, and informal “we'll see how it goes” hiring carries more risk. If you plan to grow the team in 2027, tighten the first-six-months process now.
4. What are the latest numbers actually telling us?
Two data releases landed just before the Budget and are worth reading alongside it: the ONS labour market figures on 20 October and September's inflation figure on 21 October, which showed consumer price inflation rising to 3.5% from 3.1%. Together with the Budget, they tell you whether the pressure on wages and prices is easing or building – which should temper or embolden your 2027 plan. Base the plan on the actual figures, not the mood of the coverage.
5. Where will next year's growth actually come from?
Budgets focus the mind on cost, but cost control alone does not grow a business. With your margins under pressure, the higher-leverage question is where profitable new work will come from in 2027: which services, which customers, which channels. This is the moment to decide what you will invest in to grow, not just what you will trim. Our year-end marketing planning guide gives a simple half-day process for that, and the five marketing numbers every MD should see gives you the dashboard to track it.
Turn it into a one-page plan
The businesses that handle a Budget well are not the ones that predict it. They are the ones that translate it quickly into a small number of decisions and act. Pull your leadership team together for an afternoon, work through these five questions, and leave with a costed plan for 2027.
Frequently asked questions
When was the Autumn Budget 2026?
The Chancellor delivered the Autumn Budget on 28 October 2026.
What did the Autumn Budget 2026 change for small businesses?
The main measures are a 3.9% rise in the National Living Wage to £13.21 an hour from April 2027, a higher main first year capital allowance of 50% from January 2027, and wider small business rates relief for retail, hospitality and leisure premises in England. Headline rates of income tax, National Insurance and VAT did not change.
What employment change is confirmed for January 2027?
From 1 January 2027 the unfair dismissal qualifying period drops from two years to six months and the compensation cap is removed, under the commencement regulations made in June 2026. This applies where the effective date of termination is on or after 1 January 2027.
How should a small business plan after a Budget?
Translate the measures into pounds for your business, revisit pricing and hiring against those numbers and the latest economic data, and decide where growth will come from – ideally in a single focused planning session rather than a drawn-out process.
Plan 2027 with a clear head
If you want help turning the headlines into a marketing and growth plan that fits your numbers, get in touch or start with our free one-page marketing strategy template.
Sources
- HM Treasury: Budget 2026 document
- Grant Thornton: Autumn Budget 2026 tax response
- Pinsent Masons: smaller businesses to benefit most from rates reforms
- British Chambers of Commerce: Quarterly Economic Survey, Q3 2026
- Forbes Solicitors: January 2027 start for unfair dismissal changes (SI 2026/559)
- ONS: Consumer price inflation, September 2026
