UK Autumn Budget 2025: Implications for Hiring in UK Accounting Practices

The UK Autumn Budget delivered on 26 November 2025 sets out a range of fiscal measures with significant implications for recruitment and workforce management in UK accounting practices. Partners and HR leaders should closely consider these developments in the context of wage planning, compliance, and practice growth. Below, we provide a detailed analysis of the major announcements and their anticipated impact on hiring, team structure, and the broader accounting sector.

Key Budget Announcements Impacting Employment

• National Living Wage Increase
  The National Living Wage will rise from £12.21 to £12.71 per hour for adults, with proportional increases for younger workers and apprentices. Effective from April 2026, this change will raise the wage floor and recalibrate minimum salary benchmarks at all levels across the profession.

• Employer National Insurance Contributions
  With last year’s significant increase still in effect, National Insurance thresholds and rates remain unchanged for now—continuing to represent a key component of overall employment costs. Any future adjustments could have immediate consequences for hiring budgets and overall margins.

• Freeze on Income Tax Thresholds
  The extended freeze on income tax thresholds until 2031 is expected to generate ‘fiscal drag’ as salary increases to offset inflation push more staff into higher tax bands. This elevates the complexity of payroll management and increases both employer and employee tax exposure.

• Pension Salary Sacrifice Reform
  From April 2029, employer and employee pension contributions above £2,000 per year will no longer be exempt from National Insurance. This will require practices to re-evaluate the attractiveness and efficiency of current salary sacrifice offerings.

• Increased Tax Complexity
  New measures affecting property, dividend, and savings tax are set to add notable administrative burdens for accounting professionals, driving demand for compliance, advisory, and technical expertise.

Implications for Recruitment in UK Accounting Practices

1. Upwards Pressure on Salaries and Market Competition

UK accounting practices will need to re-examine salary bands to sustain competitive positioning and compliance. Rising minimum pay and frozen tax thresholds mean gross salaries must increase simply to maintain staff take-home pay—a trend likely to drive salary inflation and increase competition for both recently qualified and experienced professionals.

2. Increased Demand for Payroll and Compliance Specialists

Ongoing tax reforms and greater system complexity will necessitate additional in-house expertise in payroll, compliance, and benefits administration. Practices should anticipate the need to expand relevant teams, whether through new hires or the upskilling of existing personnel.

3. New Approaches to Benefits and Retention

As the value of traditional salary sacrifice and savings benefits are curtailed, practices must refresh their overall employee value proposition. Expect a shift towards enhanced wellbeing schemes, flexible working, and practical financial education as alternatives to traditional compensation.

4. Rising Administrative and Regulatory Burden

Additional employment legislation—including the likely introduction of the Employment Rights Bill and ongoing IR35 reform—will further complicate contracting and compliance. The most resilient practices will be those investing in robust HR and compliance infrastructure.

5. Niche and Sector-Specific Talent Demand

Government spending in infrastructure, public services, and the green economy will spur demand for specialist accounting professionals. Proactively mapping talent pipelines for audit, tax, and advisory roles in relevant growth sectors will deliver a distinct strategic advantage.

Strategic Recommendations for Practice Leaders

• Model Scenario Planning:
  Quantify the combined impact of wage and tax changes on people budgets and client pricing to protect profitability.

• Upskill and Diversify Talent:
  Invest in training and broaden search efforts to include payroll, compliance, and digital skills.

• Review Third-Party and Contractor Arrangements:
  Strengthen due diligence around umbrella firms and contractor agreements to stay ahead of IR35 and employment law changes.

• Update Employee Value Proposition:
  Refresh benefits packages and communicate clearly with staff about any changes—reinforce your practice as an employer of choice amid sector uncertainty.

Summary
The 2025 Autumn Budget represents a marked turning point for hiring and workforce strategy among UK accounting practices. Success will depend on agile leadership—anticipating rising costs, investing in core capabilities, and implementing effective retention strategies—to ensure practices can attract and retain the talent they need in an increasingly competitive landscape.

Sources: Bishop Fleming, The Access Group, QX Global Group, UK Government Budget 2025