What budget changes mean for the Built Environment

With no substantial changes in the Spring budget, it means this year’s increases to minimum wage rates and employer National Insurance contributions are still incoming. Construction, property services, facilities management, rail, and engineering businesses have continued to prepare accordingly. Here's what's changing and how Daniel Owen can assist you in navigating the transition.

Key Changes

Minimum wage increases (Effective Monday, 1st April 2025)

National Insurance changes (Taking effect Friday 6th April)

Rate Increase: Employer contributions rise from 13.8% to 15%—an extra 1.2 percentage points on your wage bill.

Threshold Reduction: The earnings threshold at which you start paying NICs plummets by £4,100, falling from £9,100 to just £5,000. As a result, you'll be paying NI contributions on a significantly larger portion of each employee's wages.

Partial Relief Available: The Employment Allowance will increase from £5,000 to £10,500, potentially offsetting some costs for eligible smaller businesses.

What budget changes mean for the Built Environment

These changes will have significant implications for hiring within labour-intensive sectors:

• Project costings may need recalculation to account for increased labour expenditure.
• Existing fixed-price contracts could see margin erosion.
• The competitive landscape for attracting and retaining skilled workers may intensify.
• Supply chain partners may need to adjust their own pricing structures.

How we can help

With 40 years of experience supporting the built environment through various regulatory changes, our specialist expertise is perfectly positioned to assist you:

Optimise your workforce structure - We can review your current staffing arrangements to identify potential efficiencies without compromising delivery quality.

Strategic recruitment planning - By understanding the full impact of these changes on your business, we can help develop hiring strategies that balance compliance, cost management and operational effectiveness.

Sector-specific compliance guidance - Our team understands the unique compliance challenges facing construction and engineering employers, including how these changes interact with existing regulations like IR35 and CIS.

Talent retention strategies - With increased wage pressure, we can help you develop approaches to retain your most valuable team members without unsustainable cost increases.

A Practical Approach for the Built Environment

Our consultants have deep expertise in your sector and understand the commercial realities you face. Whether you're managing complex infrastructure projects, facilities contracts, or engineering operations, we can provide practical advice tailored to your specific circumstances.

Get in touch today to discuss how these changes will impact your specific operations and how we can help you prepare effectively.