The Chancellor delivered her Budget yesterday, acknowledging that infrastructure is the ‘backbone’ of economic growth and reiterating the Government’s aim to ‘Get Britain Building’. Whilst the focus was on reducing the cost of living, a number of changes were announced that will impact businesses in the construction industry, including:
- From 1 April 2026, the National Living Wage for over 21‐year‐olds will increase by 4.1% to £12.71 per hour, whilst the National Minimum Wage will rise by 8.5% to £10.85 per hour for 18 to 20 years olds and by 6% to £8.00 per hour for 16 and 17‐year‐olds and apprentices.
- The main rate of writing down allowances – which allows companies to deduct a percentage of the value of certain items from their profits each year – will decrease from 18% to 14% from April 2026, with a new first‐year allowance of 40% for main‐rate assets from 1 January 2026.
- A new mileage‐based charge on battery electric and plug‐in hybrid vehicles will be introduced from April 2028.
- From April 2029, salary‐sacrificed pension contributions above an annual threshold of £2,000 will no longer be exempt from National Insurance.
- £48 million will be made available to recruit an additional 350 planners and establish a Planning Careers Hub to provide training programmes to support the retention of existing planners.
- There will be further investment in the Lower Thames Crossing, the expansion of Heathrow and Gatwick airports, Sizewell C, and the extension of the DLR to Thamesmead.
- The Government will not be proceeding with converging the two rates of Landfill Tax, but will instead prevent the gap between the two rates getting any wider. The Quarries Exemption – which permits the disposal of specific inert materials, such as chalk, clays and subsoils, in quarries – will also be retained.
It was also confirmed that as part of the National Planning Policy Framework, which will be consulted on later this year, housebuilding near train stations will receive a default ‘yes’ in future if certain criteria are met. Councils will also be required to inform Government if they intend to block applications of 150 or more houses so that Ministers can decide whether to intervene.