Startups model revenue obsessively and costs optimistically. Then the boring costs — the ones nobody puts on a pitch slide — quietly compound, and the runway shrinks faster than the plan said. Three of them changed on 1 April 2026: the minimum wage, the business rates multipliers, and the rateable value of every commercial property in England.

This is what those changes actually cost, at real 2026/27 rates, with the arithmetic shown. No pessimism — just the numbers a forecast needs so your zero-cash date is a known figure rather than a surprise.

1. Wages: the floor moved on 1 April 2026

The National Living Wage for workers aged 21 and over rose to £12.71 an hour from 1 April 2026, up from £12.21 — a rise of 4.1%. The band that moved most is 18 to 20, up from £10.00 to £10.85, a rise of 8.5%. Under-18s and apprentices in their first year went from £7.55 to £8.00.

The trap is not the minimum-wage role itself. It is the differential. If your junior was on £12.50 and your supervisor on £14.00, the junior has just overtaken the statutory floor and the gap between the two jobs has narrowed by 50p an hour. Somebody will notice, and the conversation lands in your salary line whether you budgeted for it or not.

Put a real number on it: one part-time person on 20 hours a week works 1,040 hours a year. At £12.71 that is £13,218.40, against £12,698.40 at last year's rate — £520 a year more, per part-timer, for the same rota.

2. What a hire actually costs, at 2026/27 rates

Salary is roughly 90% of the story only if you forget the two costs that sit on top of it:

  • Employer National Insurance: 15% on earnings above the secondary threshold of £5,000 a year (£96 a week).
  • Auto-enrolment pension: a minimum 8% of qualifying earnings, of which at least 3% must come from you. Qualifying earnings are only the slice between £6,240 and £50,270 — not the whole salary.
Worked example — a founder and two hires. A company whose founder takes a £12,570 salary hires one person on £32,000 and one part-timer at 20 hours a week on the new £12.71 rate (£13,218.40).

Employer NI: (£32,000 − £5,000) × 15% = £4,050; (£13,218.40 − £5,000) × 15% = £1,232.76; the founder's own (£12,570 − £5,000) × 15% = £1,135.50. Total employer NI £6,418.26.

Pension: 3% of (£32,000 − £6,240) = £772.80; 3% of (£13,218.40 − £6,240) = £209.35. Total £982.15.

Now the relief. The Employment Allowance is £10,500 a year off your employer's Class 1 NI bill, and £6,418.26 sits comfortably inside it — so the cash cost of employer NI this year is nil. Two hires costing £45,218.40 in salary cost £46,200.55 to employ: about 1.02× salary, not the 1.15× founders usually budget. (Illustrative figures; the rates are the real 2026/27 ones.)

That is the good news, and it has a shelf life. £10,500 of allowance at 15% covers exactly £70,000 of pay above the £5,000 threshold. In the example above, pay above the threshold totals £42,788.40 — leaving headroom for one more hire on about £32,200 before employer NI starts costing real cash. Hire number four is where your payroll line steps up by 15% of everything above the threshold, and almost nobody's forecast shows that step. Put it in yours, on the month it happens. Our post on making your first hire walks the full registration sequence.

3. Business rates: two changes landed at once

If you moved out of the spare room, 1 April 2026 was a double event. The 2026 revaluation took effect, giving every commercial property in England a new rateable value based on open-market rent at the antecedent valuation date of 1 April 2024. And the single small-business multiplier was replaced by five.

The 2026/27 multipliers for England are: 43.2p small business (rateable value up to £50,999), 48.0p standard (£51,000 and over), 38.2p small retail, hospitality and leisure, 43.0p standard retail, hospitality and leisure, and 50.8p for properties with a rateable value of £500,000 or more. For comparison, 2025/26 ran at 49.9p small business and 55.5p standard, so most small premises saw the multiplier fall — which is exactly why a rateable value that went up can still leave you paying less, or the reverse.

Small business rate relief is where the money is. A rateable value of £12,000 or less pays nothing. Between £12,001 and £15,000 relief tapers from 100% to 0% — GOV.UK's own worked figures put £13,500 at 50% relief and £14,000 at 33%. Above £15,000 there is no relief at all.

Worked example — the £15,000 cliff. A studio with a rateable value of £14,000: £14,000 × 43.2p = £6,048, less 33% relief = £4,052.16 a year. The unit next door at £18,000: £18,000 × 43.2p = £7,776 a year, with no relief available. Four thousand pounds of rateable value costs you £3,723.84 in rates. Get the rateable value of any property from the Valuation Office Agency's "Find a business rates valuation" service before you sign the lease, not after.

Two things founders miss. Relief is not automatic — you apply to your local council, and it normally requires that your business uses only one property. And since 27 November 2025 the grace period on that condition runs for three years rather than one, so taking a second site no longer costs you the relief on your first straight away.

4. Software creep, and the subscriptions nobody cancels

Startups accumulate subscriptions like lint: a tool here, a seat there, an annual plan that auto-renews unnoticed. Individually trivial, collectively a real monthly leak. Two habits fix it — review every recurring payment once a quarter against who actually logged in, and prefer bundled value where it is genuine. FreeAgent's limited company plan lists at £33 a month or £330 a year excluding VAT, and is free for as long as you hold a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account. It is also included at no extra cost in our packages, precisely so it is one less line on the pile.

5. The lumps a monthly average hides

Averaging your tax across twelve months is the single most common forecasting error, because none of it is paid monthly:

  • Corporation tax is due nine months and one day after your accounting period ends — three months before the CT600 itself. The cash leaves before the paperwork is even required. The rate is 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between producing an effective 26.5% marginal rate on that slice. Both thresholds are divided by the number of associated companies, which catches founders running two companies far more often than they expect — see our corporation tax guide.
  • VAT arrives quarterly once you register, and registration is compulsory when taxable turnover passes £90,000 in any rolling twelve months. You then have 30 days from the end of the month you crossed it, and your effective date is the first day of the second month after. A business at £7,500 a month is at the line within a year.
  • Late payment interest is 7.75% from 9 January 2026 — the Bank of England base rate of 3.75% plus four percentage points. Funding a tax bill by paying HMRC late is now more expensive than most overdrafts.

What to do this week

  1. Reprice every hourly role at £12.71 (21+) or £10.85 (18–20) and check your differentials still make sense.
  2. Add up pay above £5,000 per employee across your whole payroll. If the total is nearing £70,000, diarise the month your Employment Allowance runs out.
  3. Look up the rateable value of any premises you hold or are considering, apply the right multiplier, and apply to your council for small business rate relief if you have not.
  4. List every subscription with its renewal date and last-login evidence; cancel what fails both tests.
  5. Put corporation tax, each VAT quarter and your pension submissions into your cashflow forecast on the actual dates they fall, not as a monthly average.

The founders who survive are not the ones with the lowest costs — they are the ones who saw the costs coming. We build startup forecasts with the boring lines in them and keep them current in FreeAgent, so your zero-cash date is always a number you already know. Get started from £49 + VAT a month.