Key Changes in the Budget affecting Small Businesses

The budget this week set out just a few key changes that small business owners should be aware of.

National Minimum Wage

Each level of National Minimum wage will rise by 3.9% from April 2027.

Age 21+ will increase to £13.21

Age 18-20 will increase to £11.27

Age under 18 and apprentices in their first year will increase to £8.31

The increase in the minimum wage will increase employer costs as more employers NI and employers pension contribution will be payable.

Offset Accommodation

This will increase from £11.10 per day to £11.53

Employment Allowance

There is no change to this and employers will still be able to offset up to £10,500 against Employers NI if they are eligible.

Advisory Fuel Rates

The rate for the first 10,00 miles will remain at 55p per mile which was effective from April 2026.  The rate after 10,000 miles in the tax year will remain at 25p per mile but increase to 35p per mile from April 2027

VAT & PAYE Payments

HMRC will expect businesses to set up a direct debit for these payments from April 2029.

Trading Allowance

Individuals will be able to have up to £3,000 of trading or miscellaneous income tax free from April 2027.  This is increased from the current £1,000.

Tax Payments

Taxpayers with self assessment will be required to make tax payments regularly throughout the year from April 2029, rather then twice per year as now.  Taxpayers who are also employed can choose to have tax taken regularly through PAYE.