Three costs that belong in a startup's forecast changed on 1 April 2026: the minimum wage, the business rates multipliers, and the rateable value of every commercial property in England.

This post works through what those changes cost at 2026/27 rates, with the arithmetic shown, along with the cost of employing people and the tax bills that are paid in lump sums.

1. Minimum wage rates from 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.

A rise in the minimum can also affect pay above it. If a junior role was paid £12.50 an hour and a more senior role £14.00, the junior rate must rise to at least £12.71, and the gap between the two roles narrows from £1.50 to £1.29 an hour. You may need to raise the senior rate as well.

A part-time employee working 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, so each part-time employee on the minimum rate costs £520 a year more for the same hours.

2. The cost of a hire at 2026/27 rates

Two costs sit on top of salary:

  • 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 the part of salary between £6,240 and £50,270.
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.

The Employment Allowance is £10,500 a year off your employer's Class 1 NI bill, and £6,418.26 is within it, so the company pays no employer NI this year. The two hires cost £45,218.40 in salary and £46,200.55 in total to employ, about 1.02× salary. (Illustrative figures, using 2026/27 rates.)

At 15%, £10,500 of allowance covers £70,000 of pay above the £5,000 threshold. In the example above, pay above the threshold totals £42,788.40, which leaves room for one more hire on about £32,200 before the company starts paying employer NI. After that, employer NI costs 15% of all further pay above the threshold, so show that cost in your forecast from the month it starts. Our post on making your first hire covers the registration steps.

3. Business rates from 1 April 2026

Two changes took effect on 1 April 2026 for companies with premises. The 2026 revaluation gave every commercial property in England a new rateable value, based on its open-market rent on 1 April 2024. England's two multipliers were also 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 the multiplier fell for most small premises. A property whose rateable value went up can therefore still have a lower bill, and the reverse can also happen.

Small business rate relief reduces the bill for small premises. A property with a rateable value of £12,000 or less pays nothing. Between £12,001 and £15,000 relief tapers from 100% to 0%, and GOV.UK's examples put £13,500 at 50% relief and £14,000 at 33%. Above £15,000 there is no small business rate relief.

Worked example — the £15,000 limit. An office with a rateable value of £14,000: £14,000 × 43.2p = £6,048, less 33% relief = £4,052.16 a year. A similar office with a rateable value of £18,000: £18,000 × 43.2p = £7,776 a year, with no relief. The extra £4,000 of rateable value adds £3,723.84 a year to the bill. Check the rateable value of any property on the Valuation Office's "Find a business rates valuation" service before you sign the lease.

The relief is not automatic. You apply to your local council, and it normally requires that your business uses only one property. If you take on a second property on or after 27 November 2025, you keep the relief on your main property for three years, up from one year before that date.

4. Software subscriptions

Software subscriptions add up, especially annual plans that renew automatically and seats nobody uses. Once a quarter, check every recurring payment against who has logged in, and cancel what is not used. Accounting software is one of these costs. Xero's UK plans start at £18 a month plus VAT, paid to Xero. 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.

5. Tax bills paid in lump sums

Corporation tax and VAT are paid in lump sums on fixed dates, so a forecast that spreads them evenly across the year can show cash that is already owed to HMRC:

  • Corporation tax is due nine months and one day after your accounting period ends, three months before the CT600 return is due. The rate is 19% on profits up to £50,000 and 25% above £250,000. Between the two, marginal relief produces an effective 26.5% marginal rate on each extra pound of profit. Both thresholds are shared equally between a company and its associated companies, so a founder who controls two companies has lower thresholds in each. See our corporation tax guide.
  • VAT is usually paid quarterly once you register. 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 in which you went over, and your registration takes effect from the first day of the second month after. Sales of £7,500 a month add up to £90,000 over twelve months.
  • Late payment interest charged by HMRC is 7.75% from 9 January 2026, which is the Bank of England base rate of 3.75% plus four percentage points.

What to do this week

  1. Check that every hourly rate is at least £12.71 for staff aged 21 and over, or £10.85 for those aged 18 to 20, and check the gaps between junior and senior rates.
  2. Add up pay above £5,000 per employee across your whole payroll. If the total is nearing £70,000, note the month your Employment Allowance will run 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 when it was last used, and cancel the ones nobody uses.
  5. Put corporation tax, each VAT payment and your pension payments into your cashflow forecast on the dates they are paid.

We build startup forecasts that include these costs and keep them up to date in Xero and Buzz OS, so you always know the date your cash would run out. Get started.