Taking your recruitment agency to the next level!

On Wednesday 28 October 2026, at 12:35 pm, the new Chancellor, John Healey, delivered his first Budget speech under the new Andy Burnham Government, describing it as a “Budget for the working people of Britain”.
The speech was the usual rowdy affair in the Westminster chamber, and the Chancellor spoke for over 55 minutes. The Budget focused on giving “households breathing space from some of the everyday costs, providing targeted support for businesses and self-employed people, and starting the long-term action needed to get energy costs down for good”.
NATIONAL LIVING WAGE
The Chancellor announced a 3.9% increase in the National Living Wage, from £12.71 to £13.20 per hour. This is equivalent to an increase of around £819 per annum for a full-time worker from April 2027. Workers aged 18–20 will also see their minimum wage rise by 3.9%, from £10.85 to £11.27 per hour.
MAYACHI COMMENT – This increase in the National Living Wage will be welcomed by millions of workers facing continued pressure on household finances, particularly younger workers, who will see an increase in their earnings. Recruitment agencies placing temporary workers will need to factor this increase into their charge and pay rate calculations from April 2027.
TAXATION – CAPITAL GAINS TAX
The Chancellor announced two Capital Gains Tax measures. Reducing the Business Asset Disposal Relief threshold from £1 million to £500,000 and introducing founders’ relief at a 10% rate on lifetime gains of up to £10 million for founders of successful firms.
MAYACHI COMMENT – Although we do not yet know which founders of high-growth, innovative companies will qualify for the new relief, these Capital Gains Tax changes could benefit recruitment agency owners looking to sell or exit their businesses.
TAXATION – INCOME TAX AND DIVIDENDS
The Chancellor confirmed that there would be no changes to the taxation of dividends or employment income.
MAYACHI COMMENT – This is welcome news for many recruitment agency owners, particularly given that the previous Budget saw an increase in dividend tax rates for basic- and higher-rate taxpayers. The freeze on income tax is in line with the Labour manifesto and is also welcome news.
TAXATION – SAVINGS AND INVESTMENTS
From April 2027, the annual ISA allowance will remain at £20,000, with previously announced changes to cash ISAs being revoked.
MAYACHI COMMENT – This is welcome news, as the previous policy could have increased the risk of customers not receiving appropriate advice about their investment choices.
BUSINESS RATES AND VAT ON ELECTRICITY
The Chancellor said the new British Industrial Competitiveness Scheme would cut electricity bills by 25% for 10,000 firms from April, with backdated payments available for eligible energy costs incurred this year. The Chancellor also said that the traditional business rates relief supplement would be extended by two years as part of wider support measures.
MAYACHI COMMENT – This is welcome news, although it remains unclear whether recruitment agencies will be eligible for the business rates relief and any support relating to VAT on their electricity bills.
TRANSPORT
The Chancellor cited transport investment as part of wider regional growth plans. He announced £1.5 billion in additional loans for mayoral authorities, with examples including the Black Country Metro extension, the reopening of Doncaster Airport and the Bakerloo Line extension. He also allocated £30 million for Cardiff Parkway station. These measures were presented as part of devolved local infrastructure funding rather than a nationwide transport programme.
MAYACHI COMMENT – The shift towards mayoral authorities overseeing transport investment may create opportunities for recruitment agencies to work with local authorities and provide staff for these specific projects.
ENERGY
The Chancellor said energy policy would prioritise cheaper bills. A new energy wealth fund was launched, and a gas deal was approved, which is expected to protect jobs and add £2.9 billion to the UK economy. Clean-power projects would proceed only if they lower bills and can connect to the grid. Plans also included fixed-price renewables, GB Grid reform and direct funding for hydrogen.
MAYACHI COMMENT – The move towards greater UK energy production presents a significant opportunity for recruitment agencies providing staffing solutions to the energy and renewables sectors.
NHS AND HEALTHCARE
The Chancellor said NHS spending is £37 billion higher this year than in the final year of the previous Conservative government. He and the Health Secretary will review NHS productivity and the use of AI, aiming to reduce administrative workloads so that staff can spend more time with patients. He also cited more than £1 billion in new life sciences investment, backed by £70 million in government support.
MAYACHI COMMENT – Improving productivity through AI could help reduce NHS waiting times. However, a reduction in the use of agency staff could negatively affect the recruitment industry. The additional funding for the life sciences sector should benefit agencies providing staff to businesses operating in this industry.
DEFENCE
The Chancellor said defence spending is £14 billion higher than in the final year of the previous Conservative government. He also confirmed plans to reach NATO’s 3.5%-of-GDP commitment by 2035, targeting 3% by 2030. Measures include up to £5 billion in investment and lending over four years through the National Wealth Fund and British Business Bank, alongside greater private investment and joint procurement with allies.
MAYACHI COMMENT – Greater private investment and joint procurement could benefit UK companies, particularly recruitment agencies working with these businesses to provide the staff they need.
HOUSING
The Chancellor announced an additional £1.5 billion for social and affordable housing, bringing the government’s total commitment to £40 billion. Councils would receive extended access to cheaper borrowing, and land sold to social housing providers would become VAT-free. He also announced £4.7 billion in government-backed lending for a first-time buyer equity loan scheme, planned for next spring and aimed at buyers without family financial support.
MAYACHI COMMENT – The announced investment appeared to focus more on helping people onto the housing ladder than on increasing housebuilding, which may disappoint businesses in the construction sector.
ALCOHOL, FUEL, VAPING AND TOBACCO DUTY
The 5p fuel duty cut and the reduced red diesel rate will be extended to July 2027.
Mileage rates, previously increased from 45p to 55p per mile earlier in the year, will be made permanent. An increase in the mileage rate for business travel exceeding 10,000 miles, from 25p to 35p per mile, was also announced.
No changes to alcohol, vaping or tobacco duties were announced.
MAYACHI COMMENT – Confirmation that the mileage rates are permanent, together with the increase in the higher mileage allowance, is good news for agency owners who travel to visit clients and candidates.
Thursday-night drinks may become slightly more expensive, particularly if inflation continues to rise!
Link to Mayachi Blog Here: NAVIGATING THE AUTUMN 2026 BUDGET – WHAT RECRUITERS NEED TO KNOW












