Tax and National Insurance changes 2026-27

The latest Budget confirms a number of National Insurance (NI) and taxation measures that will continue to shape employer costs and employee pay.

Here’s a summary of the most notable updates effective from April 2026:

• The rate of employer’s National Insurance Contributions (NICs) will remain at 15%.
• The following income tax thresholds remain frozen until 2030 – 31. Personal allowance: £12,750, higher-rate: £50,270 and additional-rate: £125,140.
• The Employer’s NI primary, secondary and upper thresholds will remain frozen until 2030 – 31. This includes the already-reduced secondary threshold of £5,000.
• Employer reimbursements for homeworking equipment, eye tests and flu jabs will become tax and NIC exempt when processed through payroll.
• Employees will no longer be able to claim the homeworking tax relief via their tax code.
• The Employment Allowance will remain unchanged at £10,500 with the removal of the £100,000 eligibility cap still in effect.
• The following figures will be increased in line with the September 2025 CPI rate of 3.8%. Lower Earnings Limit (LEL): £129 per week, Small Profits Threshold: £7,105 per year.
• The Married Couples Allowance and Blind Person’s Allowance will be uprated by the September 2025 CPI rate of 3.8%. This will be legislated for through a Treasury Order and take effect from 6 April 2026.

Many of these measures remain in-line with the 2025-26 tax year, with the continued freeze on income tax and NI thresholds meaning that more employees will gradually move into higher tax bands as wages rise – a key driver of fiscal drag.

Additionally, the new introduction of tax and NIC exemptions for certain employer-funded health benefits and homeworking equipment may also encourage organisations to review how they structure these benefits in a more tax-efficient way.