Budget 2025
Workforce and Staffing Impact Brief 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. If you rely on temporary workers, permanent hires, or both, these updates will influence your labour costs, pay expectations, and workforce planning. Here’s a clear breakdown of what’s changing, when it’s happening, and what it means for you.
Key changes announced: Here are the changes that will have the biggest impact on your staffing and workforce costs. Increases to the National Living and Minimum Wage rates New PAYE and NIC rules for the umbrella company market Freezes on income tax and National Insurance thresholds A future cap on NIC-free pension salary sacrifice Funding to boost youth employment and entry-level talent Each of these will affect costs, compliance, and the way you structure your workforce.
Measures affecting you when working with a recruitment business for temporary staffing From 6th April 2026 - Umbrella Company PAYE and National Insurance Contribution Liability Reform New rules mean that from 6th 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 liability across the supply chain for unpaid employer NIC. This means: Higher compliance responsibility for agencies and end user clients. Exposure if an umbrella mishandles PAYE / NIC. Considerations: Review all umbrella partners, and agency providers who use umbrella partners now – don’t wait until 2026. Ensure your temporary workforce are paid directly via a PAYE model – and prepare for potential cost increases if this is not currently the case.