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The UK Autumn Budget on 26 November brings several important changes that every founder should understand. From April 2026, wages will rise, tax thresholds will remain frozen, and taxes on dividends and investment income will increase.
These financial changes will lower your take-home pay and affect your business’s cash flow, making it essential to review how you pay yourself and your team.
For international founders, the same changes may also impact payroll setup and visa compliance, so planning is particularly important.
Major Cost Pressures on Your Business
Three distinct changes are set to push your operating costs up:
National Living Wage Increase
From April 2026, the National Living Wage will rise to £12.71. If your business relies on large teams, this may tighten margins quickly. You may need to change rotas, automate simple tasks, or review your pricing to stay profitable.
Frozen Tax Thresholds (“Stealth Tax Drag”)
Tax thresholds will stay frozen until 2031. As salaries rise, more of your income will move into higher tax bands. Even though tax rates stay the same, your total tax burden will increase. Over time, this becomes expensive.
Higher Taxes on Investment Income
Taxes on dividends, savings, and rental income will rise by two percentage points. If you take income as dividends, expect higher personal tax bills. National Insurance may also apply on investment income when total contributions exceed £2,000 per year. With thresholds frozen, planning is essential.
Why Do These Tax Changes Affect Your Visa?
These Budget changes don’t alter immigration rules, but founders should still be careful. The Home Office closely reviews salary, payroll, and director pay. Any changes can draw attention.
Your mix of salary and dividends may also affect Skilled Worker eligibility at renewal.
Growth Incentives: How the Budget Supports Entrepreneurs
But it’s not all cost: The Budget provides practical ways to fight back. High taxes and rising operating costs have challenged UK businesses, but the new measures give entrepreneurs clear tools to save money, raise capital, and plan growth with confidence.
- Investment and Scale-Up
Entrepreneurs can now make the most expanded enterprise tax reliefs to fund growth more efficiently. The three-year stamp duty exemption for UK listings lowers the cost of going public, helping businesses bring forward IPO plans or explore public-market fundraising. Meanwhile, new ISA rules make it easier to attract retail investment into high-growth UK companies.
- Managing Operating Costs
Permanent business-rate cuts for retail, hospitality, and leisure free cash to invest in hiring, technology, or expansion. Predictable, capped annual rate increases also allow businesses to plan budgets with confidence and reduce financial risk. - Transport and Logistics
A fuel-duty freeze until August 2026 stabilises operating costs for transport and delivery businesses. Looking ahead, businesses can plan per-mile EV tax in 2028 by selecting fleet vehicles and routes that remain cost-efficient under the new rules.
These measures are designed to turn relief into action helping businesses grow, scale, and invest with confidence. For more details, read Gov.UK – Budget 2025.
How to Prepare for 2026–2028
Early preparation will help you protect margins and stay compliant. The upcoming changes in taxes, wages, and reliefs will directly affect both your income and your business’s cash flow. Planning now gives you time to optimise funding, adjust payroll, and align staffing before the new rules take effect:
Review Payroll Compliance
- Ensure your sponsored workers meet Skilled Worker salary rules, including the minimum annual threshold.
- Check early to prevent visa or compliance issues before they affect your business.
Optimise Director Compensation
- Review your salary and dividends.
Set up a plan that keeps your tax manageable while maintaining immigration compliance.
Plan Your Staffing Strategy
- Use smart hiring, automation, and efficient resourcing to manage rising wages.
- Leverage incentives (like R&D or EIS) to offset labour costs and protect margins.
Take Control of Your Budget Strategy
Now’s the time to turn budget changes into real business opportunities. With the right planning, you can stay compliant, protect your margins, and move your business forward. Legend Consults helps founders stay compliant with UK visa rules and manage the Budget 2025 changes. Book a free consultation to build a clear strategy today!
