# New tax year changes for construction (April 2026 edition)
Here's the short, straight version for April 2026: minimum wage is up again, tax bands are still frozen, and NI has eased a bit, good news for CIS lads and PAYE alike, but your day-rate and prices need to move with it.
Quick rule of thumb: if you're CIS, remember: NMW doesn't legally protect you, NI/tax bands are frozen, and materials and fuel are still climbing. Not nudging your rates in April is basically giving yourself a pay cut.
1. National Minimum Wage from 1 April 2026
New UK rates (also the National Living Wage for 21+):
| Age / band | 2025/26 | 2026/27 |
|---|---|---|
| 21 and over | £12.21/hr | £12.71/hr |
| 18–20 | £10.00/hr | £10.85/hr |
| Under 18 | £7.55/hr | £8.00/hr |
| Apprentice rate | £7.55/hr | £8.00/hr |
If you employ anyone (labourers, improvers, apprentices), you must be at or above these. If you're on PAYE and these numbers are higher than your hourly rate once you divide your week out, that's a problem to raise.
2. Income tax, bands still frozen
For England/Northern Ireland (Scotland has slightly different income bands, but the personal allowance is the same):
| Band | 2025/26 | 2026/27 | Rate |
|---|---|---|---|
| Personal allowance | Up to £12,570 | Up to £12,570 | 0% |
| Basic rate | £12,571–£50,270 | £12,571–£50,270 | 20% |
| Higher rate | £50,271–£125,140 | £50,271–£125,140 | 40% |
| Additional | Over £125,140 | Over £125,140 | 45% |
So your tax thresholds haven't moved, which means pay rises push more into the 20% and 40% bands (fiscal drag).
3. National Insurance, small but important shifts
Employee NI (PAYE)
- Class 1 primary (employee): 8% on earnings between £12,570 and £50,270, then 2% above that.
- Lower Earnings Limit nudged up to about £6,708/year (helps with NI credits).
Self-employed (CIS)
- Class 4: 0% up to £12,570 profits, 6% on £12,570–£50,270, 2% above that.
- Class 2: compulsory Class 2 scrapped. You can pay voluntary Class 2 at £3.65/week if profits are under £7,105 and you want to protect State Pension.
Employer NI
- Main rate 15% above the secondary threshold (around £5,000).
On site that means: slightly less NI drag on your CIS profits and PAYE wages than a couple of years ago, but not enough to ignore when you're pricing day-rates.
4. Other key April 2026 money changes
Use this as a checklist to sanity-check your take-home:
- Statutory payments · SSP, SMP, SPP, ShPP and Statutory Parental Bereavement Pay all tick up slightly each April. Check the GOV.UK rates page and compare against last year's payslips if you're off sick or on leave.
- Auto-enrolment pensions · thresholds largely unchanged in real terms (earnings trigger still around £10,000/year; contributions still minimum 8% of band earnings split between you and employer).
- Company vans and fuel · benefit-in-kind rates for vans and fuel nudge up each year. If you're given a van for private use, make sure you know the tax hit and that it still stacks against running your own.
- CIS · no big CIS rule changes widely flagged for 2026/27 yet. Rates (20% standard, 30% higher) and gross-status rules are steady, but HMRC are still tight on compliance and status checks.
5. Quick reality check, what this means on site
- If you're on PAYE day-rate or hourly, check your effective hourly rate against the new NMW, including any unpaid travel and prep time.
- If you're CIS, materials and fuel are still climbing · not nudging your rates in April is basically giving yourself a pay cut while your costs go up.
- If you employ people, April is when you should:
- Update payroll for NMW and NI.
- Review day-rates/price-work so no one is slipping below the new minimum once travel and downtime are factored in.
- Tweak quotes to clients so you're not swallowing all of this yourself.
What to do next
- This week: check your hourly rate against the new £12.71 NMW · if you're close to it after costs, you're undercharging.
- Before 6 April: update any payroll software, standing quotes, and price lists to reflect the new NMW, NI and any statutory pay changes.
- If you're self-employed, run your numbers through a tax calculator with the 2026/27 rates to see what your actual take-home looks like · then adjust your day rate if it's slipped.
- If you're an employer with apprentices, check the new apprentice rate (£8.00/hr) and make sure your payroll is updated before the first pay run after 1 April.
Sources
- National Minimum Wage Act 1998 · legislation.gov.uk/ukpga/1998/39/contents · legal minimum hourly rates.
- 2026/27 NMW rates · confirmed April 2026: £12.71 (21+), £10.85 (18–20), £8.00 (under 18/apprentice).
- Income Tax (Earnings and Pensions) Act 2003 · legislation.gov.uk/ukpga/2003/1/contents · income tax framework.
- 2026/27 income tax bands · personal allowance £12,570, basic rate £12,571–£50,270, higher rate to £125,140.
- National Insurance Contributions Act 2015 and 2022 amendments · Class 1, Class 2, Class 4 rates and thresholds.
- HMRC CIS guidance · 20% standard / 30% higher deduction rates, gross status rules.
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