# UK Budget 2026: what it means for the software your business uses

The 28 October Budget did not announce a software law, but several changes will reach the systems that run your invoicing, payroll and tax. Here is what was announced, what is still to be confirmed, and what to ask your suppliers.

- Page: https://www.cognivise.co.uk/blog/uk-budget-2026-business-software
- Topic: Running software
- Published: 2026-10-29
- Updated: 2026-10-29
- Author: Cognivise

## Key takeaways

- The 28 October 2026 Budget includes changes that reach business systems: VAT e-invoicing from April 2029 and payrolling of some benefits from April 2027.
- The National Living Wage rises to £13.21 from 1 April 2027, so check that pay rates in your systems can be updated on the right date.
- The detailed e-invoicing rules are not yet published, so start by listing which systems create your invoices.
- This is general information, not tax advice; check the dates against official documents and ask each supplier for their plan.

Does the 2026 Budget change anything for your business software? Yes, in a few places. VAT e-invoicing becomes mandatory from April 2029, payrolling of some benefits becomes mandatory from April 2027, and the National Living Wage rises from April 2027. Each of these touches the systems that handle invoices, payroll and pay rates. This is general information, not tax or legal advice, and the details may still change.

## What did the Budget announce that affects software?

The Budget was delivered on 28 October 2026. These are the measures reported in accountancy firms' summaries that reach business systems:

| Change | Date | What it touches |
| --- | --- | --- |
| VAT e-invoicing becomes mandatory | 1 April 2029 | Invoicing, accounting and ERP systems |
| Mandatory payrolling of benefits in kind (company cars, vans, fuel, medical benefits) | From 6 April 2027 | Payroll software |
| Remaining benefits in kind move to payrolling | From 6 April 2028 | Payroll software |
| National Living Wage rises to £13.21 an hour (3.9%) | 1 April 2027 | Pay rates and rota or timesheet systems |
| R&D claim notification form removed | 1 April 2027 | Record keeping for development work |

Figures are as reported by [Forvis Mazars](https://www.forvismazars.com/uk/en/insights/the-chancellors-budget-and-forecast-statements/autumn-budget-summary) and [Bishop Fleming](https://www.bishopfleming.co.uk/insights/autumn-budget-2026-summary-key-tax-changes-and-announcements). Check them against the official Budget documents and HMRC guidance before you act.

## What is VAT e-invoicing, and why does it matter?

E-invoicing means invoices are exchanged as structured data between systems, not as a PDF that someone reads and types in. According to Forvis Mazars, VAT e-invoicing will be mandatory from 1 April 2029, using the Peppol network, with detailed rules to be published by April 2028 at the latest.

That gives most businesses time, but the work sits in software:

- Your accounting or invoicing system has to create and receive invoices in a structured format.
- Anything that builds invoices by hand, such as a spreadsheet or a custom order system, may need changing.
- Systems that pass orders to accounts need to agree on the same fields, so the data arrives intact.

Because the detailed rules are not out yet, the useful step now is to find out which systems create your invoices, not to rebuild anything.

## What changes with payrolling of benefits?

From 6 April 2027, employers will be required to report company cars, vans, fuel and employer-provided medical benefits through payroll, and the remaining benefits follow from 6 April 2028. Employers who handle these in another way today need a payroll system that can do it, and the people who maintain it need to be ready. Ask your payroll provider how and when their software will support it.

## What about Making Tax Digital?

Making Tax Digital for Income Tax started in April 2026 in phases, based on turnover. As summarised by Bishop Fleming, the thresholds are above £50,000 from April 2026, above £30,000 from April 2027 and above £20,000 from April 2028. If it will apply to you, you need software that keeps digital records and sends them to HMRC. Check your own position on GOV.UK.

## What does a higher National Living Wage mean for software?

The rate rises to £13.21 an hour from 1 April 2027, up from £12.71. Software does not change that, but it does hold the pay rates. Check that rotas, timesheets, payroll and any quoting or costing tools can take the new rate on the right date, and that someone is responsible for updating them.

## Does the R&D change matter if we build software?

The Budget says the R&D claim notification form will be removed from 1 April 2027, with the additional information form simplified from autumn 2027. If you build or commission software and claim R&D relief, keep clear records of what was done and when. Whether a particular project qualifies is a question for your accountant, and we do not give tax advice.

## What should you do this month?

1. **List the systems that create invoices, run payroll and hold pay rates.** Include spreadsheets and custom tools, not only the named products.
2. **Ask each supplier what they plan to support and when.** Get the answer in writing.
3. **Find out who owns each system.** If nobody is responsible for updates, that is the first gap to fix. See [what application support and maintenance cover](https://www.cognivise.co.uk/blog/what-application-support-covers).
4. **Note where systems pass data to each other.** E-invoicing and payroll changes often break at these links. Our [API integration guide](https://www.cognivise.co.uk/blog/api-integration-guide) explains what can go wrong.
5. **Book a review.** A [technical audit](https://www.cognivise.co.uk/blog/what-is-a-technical-audit) lists what you run and what needs attention.
6. **Set a reminder** for when the detailed e-invoicing rules are published.

## What is still uncertain?

The detailed e-invoicing rules are not published, and summaries of the Budget differ on some points. A few measures also depend on legislation still to be passed. Treat the dates above as the current plan, and check [GOV.UK](https://www.gov.uk) and HMRC for the final position.

If you want help finding out what your systems do and which ones need work, see our [ongoing support and ownership](https://www.cognivise.co.uk/services/ongoing-support-and-ownership) service or [contact us](https://www.cognivise.co.uk/contact).

## Sources

Read on 29 October 2026. Check each against the official Budget documents.

- [Forvis Mazars: Autumn Budget 2026 summary](https://www.forvismazars.com/uk/en/insights/the-chancellors-budget-and-forecast-statements/autumn-budget-summary)
- [Bishop Fleming: Autumn Budget 2026 summary, key tax changes and announcements](https://www.bishopfleming.co.uk/insights/autumn-budget-2026-summary-key-tax-changes-and-announcements)

## Related

- [Ongoing support and ownership](https://www.cognivise.co.uk/services/ongoing-support-and-ownership)
- [What application support and maintenance actually cover](https://www.cognivise.co.uk/blog/what-application-support-covers)
- [API integration: what it involves and what can go wrong](https://www.cognivise.co.uk/blog/api-integration-guide)