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When your business buys goods or services, you need a clear and organised system to track those transactions. That’s where Purchase Orders (POs) come in. 

A PO is a formal document that you send to a supplier to request goods or services, helping you stay in control of your finances, streamline procurement, and avoid miscommunication. 

In this guide, you’ll explore everything you need to know about purchase orders—what they are, how they differ from invoices, the different types of purchase orders, and why they’re essential for businesses of all sizes. 

Whether you run a small start-up or a large enterprise, understanding POs helps you keep your purchasing process efficient and hassle-free. 

Here’s what we’ll cover: 

Purchase order definition 

Ready to get a handle on purchase orders? The first step is understanding what they are and how they fit into your buying process. 

A purchase order can form part of a legally binding contract once it’s accepted by the supplier, subject to the agreed terms and conditions.

It acts as an official request and outlines all the important details to keep things clear and organised. A typical PO includes: 

• Purchase Order Number (PON): a unique reference number to track the order. 

• Buyer and seller details: company names, addresses, and contact information. 

• Order details: a breakdown of what you’re ordering—description, quantity, and price. 

• Payment terms: how and when payment will be made (e.g. payment on delivery or 30 days from invoice date) 

• Delivery details: where and when the order should be shipped.  

What is the difference between a purchase order vs invoice? 

Many people confuse purchase orders and invoices, but they serve completely different purposes in the buying process.  

So, what is the purpose of a purchase order?

It acts as a formal request from a buyer to a supplier, outlining the details of a purchase before the transaction takes place. In contrast, an invoice is sent after goods or services are delivered to request payment.  

To clear things up, here’s a quick breakdown: 

Who issues it? 

• PO: sent by the buyer to request goods or services. 

• Invoice: sent by the seller after delivering goods or services. 

When is it sent? 

• PO: sent before the transaction to confirm the order. 

• Invoice: sent after the transaction to request payment. 

What’s its purpose? 

• PO: lists order details, pricing, and terms that have been agreed upon. 

• Invoice: requests payment from the buyer. 

Is it legally binding? 

• PO: yes—once the seller accepts it, it becomes a contract. 

• Invoice: yes—it confirms the amount due and payment terms based on the agreed contract. 

Think of a purchase order as setting up your business’s transaction, and an invoice as finalising it by requesting payment.

Both documents keep things organised and protect both parties, making sure you and your seller are on the same page. 

Example of a purchase order 

A PO is typically a formal document with clearly labelled sections to ensure accurate transactions. Want a clearer picture of what does a purchase order look like? 

Here’s a purchase order example: 

Imagine you’re running a clothing company, and you’re preparing for the next season’s collection. 

You need to order fabric from a trusted supplier. Instead of relying on verbal agreements, you create a PO to outline exactly what you’re ordering. 

Here’s what a standard PO for fabric would include: 

1. Basic details for tracking 

• Purchase order number: a unique identifier for this specific order. 

• Purchase order date: the date the order was created. 

2. Buyer and vendor information 

• Vendor name and billing address: the supplier’s business details. 

• Buyer name and shipping address: your company’s details, including where the order should be delivered. 

• Additional contact information: phone numbers and email addresses for both parties. 

3. Shipping and delivery terms 

• Delivery date: the expected or agreed-upon date for the goods to arrive. 

• Shipping method: the chosen transportation method (e.g., standard freight, express delivery). 

• Shipping terms: who is responsible for shipping costs and potential damage. 

4. Order details 

• Item name: the product being ordered (e.g., “cotton fabric – light blue”). 

• Item description and technical information: specifications such as material composition, weight, and texture. 

• Item quantity: the number of units ordered (e.g., 50 metres). 

• Item unit cost: the price per unit measurement (e.g., £10 per metre).

• Line total: the cost for each item category (e.g., 50 metres x £10 = £500). 

5. Cost breakdown and payment terms 

• Taxes: any applicable VAT or other relevant taxes. 

• Total price: the final cost after taxes and discounts. 

• Payment terms: how and when payment is expected (e.g., “Net 30 – payment due within 30 days”). 

Types of purchase orders 

The type of PO you use depends on your business needs and level of commitment to suppliers.

Understanding why and when to use each type makes sure your POs are accurate, efficient, and aligned with your purchasing strategy. 

Here’s a breakdown of the four main types of purchase orders and when to use them: 

1. Standard Purchase Order (SPO) 

SPO is the most common type of order, used for one-time purchases with clearly defined details. It includes exact specifications, such as quantity, price, and delivery date.

For example, you need to upgrade the chairs in your office and order 50 office chairs from a furniture supplier that must be delivered within 5 days. 

2. Planned Purchase Order (PPO) 

This type is similar to a standard PO, but with estimated order quantities and dates. 

It helps your business forecast and plan future purchases, ideal when you know you need a specific product or service but not the exact delivery schedule.

For example, you manage a restaurant and need to estimate monthly supply orders for fresh produce. 

3. Blanket Purchase Order (BPO) 

Also known as standing orders, blanket purchase orders are ideal for recurring purchases over a set period.

It locks in pricing and terms upfront, but you can decide on specific quantities and delivery dates later. 

If your business has ongoing supplier relationships, a BPO can streamline your purchase order process and ensure you always have the supplies you need.

For example, you run a printing company that orders bulk paper supplies throughout the year as needed. Instead of placing multiple individual orders, a BPO simplifies the process and keeps costs predictable. 

4. Contract Purchase Order (CPO) 

CPO is the most flexible type of PO. It establishes a long-term agreement with a supplier but doesn’t specify exact order quantities upfront. 

You’ll typically use a CPO when you expect to make multiple purchases from the same supplier over time but don’t yet have firm details. Example: you handle accounting for a construction company that partners with a supplier for various building projects. Since material needs change from project to project, a CPO keeps the relationship in place without committing to specific quantities right away. 

The right purchase order depends on how often you buy, your supplier relationships, and the level of flexibility you need. Whether you’re placing a one-time bulk order or setting up long-term agreements, choosing the right type—such as electronic purchase orders—helps keep your purchasing process organised, efficient, and stress-free. 

Why use purchase orders in business? 

No matter the size of your business, purchase orders help keep your buying process organised and efficient. Whether you’re placing a simple order or managing complex transactions, the benefits of purchase orders include greater clarity, improved accountability, and better financial control. 

Here’s why they’re essential for both buyers and sellers: 

Benefits for buyers 

• Stay on budget—pre-approved orders help prevent overspending and keep finances in check. 

• Better record-keeping—creates a clear paper trail for tracking expenses and making audits easier. 

• Strong supplier relationships—ensure on-time, accurate deliveries, reducing the risk of delays or mix-ups. 

• Protect against fraud and disputes—serves as a legally binding agreement, helping you avoid payment issues or audit headaches. 

Benefits for sellers 

• Fewer errors and misunderstandings—clearly outline order details, reducing the chance of miscommunication. 

• Guaranteed payment security—acts as a contract, making sure you get paid for the goods or services you provide. 

• Easier inventory management—helps plan stock levels more effectively based on confirmed orders. 

• Faster processing and payments—streamlines invoicing and speeds up the payment collection process. 

Simplify your purchasing process with digital purchase orders 

As your business grows, a simple cash-for-goods system just won’t cut it. Managing multiple orders, suppliers, and payment terms can quickly become overwhelming without tools in place. 

With digital purchase orders, you can automate PO creation, eliminate manual paperwork, and reduce errors. Real-time tracking ensures you never lose an invoice or struggle to keep up with your orders. Plus, it enhances supplier management, helping you secure better pricing and ensure on-time deliveries. 

If you’re looking for an easier way to handle purchase orders, explore how our purchase order software can simplify your purchasing process today. 

HR and payroll leaders are being asked to do more than ever, often with limited time and growing expectations.

Expectations are rising, ways of working are shifting and technology is advancing faster than many teams can comfortably absorb.

At the same time, the fundamentals have not changed.

People still expect to be paid accurately and on time.

Managers still need support. Employees still expect clarity, fairness, and trust.

To understand how HR and payroll professionals are navigating this reality, Sage surveyed 1,000 HR and payroll leaders at small and medium-sized businesses across the UK, Ireland, and South Africa.

The findings reveal a profession that feels confident in its purpose, but under growing pressure.

Leaders are optimistic about the future of HR and payroll, yet many are carrying heavier workloads, facing widening skills gaps, and weighing up how to adopt AI responsibly.

The HR and Payroll Leaders’ Report explores these challenges in depth and sets out where leaders are focusing their attention next.

Download the report to learn:

• How HR and payroll leaders really feel about their roles today, including where confidence is growing and where concern remains
• Why skills gaps, workload pressure, and trust in technology are shaping priorities across organisations
• What practical steps leaders are taking to modernise HR and payroll while protecting accuracy, compliance, and employee confidence

Download The HR and Payroll Leaders’ Report

Here’s what we’ll cover:

Confident in the profession, uncertain about the future

More than 90% of HR and payroll leaders say they feel satisfied and successful in their roles, according to the Sage research.

Many feel energised by the direction of the profession and the chance to play a more strategic role.

At the same time, 48% say they feel anxious about the future of their own role.

That tension runs through the research.

Leaders believe HR and payroll are more important than ever, yet workloads are increasing and expectations continue to grow.

Across both small and medium-sized businesses, leaders say they feel responsible for culture, wellbeing, compliance, skills planning, and technology adoption.

For leaders in medium-sized organisations, technology and systems integration often feature more heavily, while leaders in smaller businesses place greater emphasis on culture and day-to-day people support.

This mix of confidence and concern reflects a shift in how the HR and payroll role is defined and experienced.

HR leaders are being asked to do more, influence more, and adapt faster than before.

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“Strategically align HR function with business objectives to improve organisation performance”

Personnel Director, Business services

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The pressure behind the progress

One of the clearest findings from the research is the strain many leaders are working under.

71% of HR and payroll leaders say their workload has increased over the past year, and more than half report feeling a sense of burnout.

Administrative and compliance tasks still take up a large share of the working week, even as strategic expectations rise.

Many leaders say their impact is not always fully understood by the wider business.

HR is still too often seen as process-led, rather than as a driver of long-term value.

This creates a difficult balance.

You’re expected to lead change while keeping day-to-day operations running smoothly.

You’re asked to support managers and employees, while also building future capability across the organisation.

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“I would prioritise the development of strong wellbeing initiatives, equitable opportunities for growth and open communication”

HR recruiter, Business services

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Skills gaps are widening, not shrinking

The research also points to a growing skills challenge, both within HR teams and across the wider workforce.

More than half of leaders say skills gaps in their organisation have increased over the past two years.

Technology, data, and AI skills are now seen as essential, yet many teams lack the training or confidence to use new tools fully.

In response, HR leaders are shifting how they think about talent.                                                      

Skills-based hiring, workforce planning, and long-term development are becoming more important than relying on job titles alone when making people decisions.

This puts HR and payroll at the centre of future readiness.

But it also adds to the pressure.

Closing skills gaps takes time, data, and support.  

Without the right foundations in place, this can feel like another responsibility added by the wider business onto an already full role.

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“To make sure every employee has a clear career growth path”

Head of HR, Professional services

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Artificial Intelligence brings opportunity and risk

AI is widely seen as a major opportunity for HR and payroll.

86% of HR and payroll leaders believe AI will transform the function, largely by freeing up time and improving accuracy.

Yet it’s also one of the areas causing the most concern.

Many leaders worry about compliance, particularly around the use of AI in HR and payroll, and the potential impact on employee trust.

Fragmented HR and payroll systems, alongside limited training, make it harder to adopt AI and automation with confidence.

The research shows a clear desire for responsible use.

Leaders want tools that reduce administrative effort while supporting employees to do their best work and enabling informed human judgement.

They want technology that supports human judgement, not replaces it.

Payroll plays a critical role in responsible technology adoption.

When automation or AI is involved, accuracy and timeliness become even more important for maintaining trust.

When HR and payroll systems are well connected, it becomes easier to introduce automation and AI in a controlled way, particularly in areas such as pay, compliance checks, and workforce data.

When those systems are fragmented, even small AI‑supported decisions can create errors or uncertainty, which can quickly undermine trust.

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“I wish I could build an AI employee management system that automates repetitive tasks. Allowing more time to focus on people”

Recruitment Manager, Technology

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What this means for HR and payroll leaders

Taken together, the findings highlight a choice facing HR and payroll leaders.

There’s strong belief in the future of HR and payroll.

At the same time, leaders point to the need for better support for HR teams and more connected HR and payroll systems.

Progress doesn’t require doing everything at once.

Many leaders are already taking practical steps, from automating repetitive tasks to building clearer skills plans and putting simple governance around new technology.

The most successful changes tend to start by focusing on a small number of priorities, such as:

• Reducing administrative load.
• Protecting trust.
• Creating space to spend more time on people and less time on process.

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“Fully integrated, AI-driven analytics platform that combines all HR Data…into one intelligent dashboard”

HR Director, Construction

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Explore the full findings

This article offers a snapshot of the themes shaping HR and payroll today.

The full HR and Payroll Leaders’ Report goes deeper, with detailed insights, practical frameworks and clear next steps drawn from the experiences of 1,000 leaders.

If you want to benchmark your challenges, understand how peers are responding to the challenges highlighted in the research and see where to focus next, download the report now.

Download The HR and Payroll Leaders’ Report

What does ‘fair pay’ actually mean in the UK right now, are the salaries you’re offering competitive enough to attract new talent?

And how do your team’s current earnings stack up against people of a similar age, region, or industry?

The latest Annual Survey of Hours and Earnings (ASHE) salary data from the Office for National Statistics (ONS) helps answer those questions.

Median annual pay for all employees now is £32,890, and full-time workers earn around £39,039.

But the national median only tells part of the story.

Pay varies significantly by region, industry, occupation, gender and age, and those differences can have a real impact on your hiring plans and retention strategy.

In this guide, you’ll find an insight into how salaries vary across the UK.

You’ll see how different groups compare, how pay has shifted over time and where the biggest changes are happening, so you can plan with a little more clarity and a lot less guesswork.

Here’s what we’ll cover:

Key insights

The following are seven important trends we took from the latest Annual Survey of Hours and Earnings by the ONS.

These points give you a fast snapshot of where salaries are heading in the UK and how they may influence your hiring and payroll planning this year.

1. Median pay continues to rise across the UK.

The median annual salary for all employees is £32,890, which represents 4.1% growth from last year.

Full-time workers earn £39,039, and part-time workers earn £14,713.

Part-time pay is rising, which can affect how businesses structure flexible roles.

2. Regional pay differences remain pronounced.

London has the highest median annual earnings at £39,778, while the North East sits at £29,584 with a difference of 25%.

The South East, Scotland, and parts of the East of England also report above-average earnings.

3. The 40–49 age group earns the highest median pay.

Employees in this group earn a median of £37,734, the highest of any age bracket.

Salaries level off slightly after age 50, which mirrors long-term patterns in the dataset.

4. A notable gender pay gap is still present.

Men earn a median salary of £38,466, while women earn £27,850, which is a difference of 28%.

The Gender Pay Gap total median is 12.8.

5. High-skill industries lead the upper pay ranges.

Roles in aviation, information technology, senior leadership, engineering, and medicine record some of the highest median salaries in the UK.

Many exceed £50,000, and some significantly exceed that benchmark.

6. Lower-paying industries create different planning pressures.

Care, hospitality, retail, sports and entry-level administrative roles often fall below the £15,000 range.

These roles tend to have higher turnover and more pressure on progression paths, which can influence how small businesses plan staffing and pay reviews.

7. The long-term trend still points upward.

Most categories show steady increases over the past decade.

The pace varies across industries and age groups, which affects how you plan future pay growth and budget for annual reviews.

Keep reading to see how earnings vary by region, age, gender, industry, and occupation, so you can build salary ranges that fit both your market and your budget.

What is the average salary in the UK?

For all employees in 2025, the median annual salary is £32,890.

This figure includes both full-time and part-time workers.

Median pay rose 4.1% from the previous year, which gives you a sense of how quickly wages are moving.

Average salaries in the UK:

• Annual median, full-time employees: £39,039
• Annual median, part-time employees: £14,713
• Mean average salary, all employees: £40,269
• Median weekly pay, all employees: £642.50
• Median hourly pay, all employees: £18.00

Understanding the difference between mean and median is important if you’re using this data to plan salaries.

• Mean: This is the traditional “average,” all salaries added together, divided by the number of jobs. The mean is not always a reliable measure as it can be skewed by a relatively small number of very low or high-paying roles.
• Median: This is the middle point of the pay distribution; 50% of jobs pay less than this figure, and 50% pay more. Because it ignores extreme outliers, the ONS prefers the median as the better indicator of “typical” pay.

The salary data helps you to compare your salaries with the wider market and see how different types of roles affect your overall costs.

Part-time earnings, for example, rose 5.9%, compared with 4.3% for full-time roles.

If your business relies heavily on flexible or variable-hours work, that difference may shape what you’ll need to budget for in the year ahead.

It’s also worth considering that the minimum wage was increased in the November 2025 budget and the impact that may have on the figures for the coming year.

Average UK salary by region

Not surprisingly, where you work has a big influence on what you earn in the UK.

Some regions lean heavily on professional and technical jobs, which naturally pushes salaries higher.

Others have more roles in hospitality, care or retail, and that brings the local median down.

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Median annual salary by region

The latest data shows clear differences in pay from one region to another.

Here’s a look at the median salary in each part of the UK, based on employees on adult rates who’ve been in the same job for more than a year.

Region	Number of jobs (thousand)	Annual Median (£)
North East	882	29,584
North West	2,731	31,330
Yorkshire and The Humber	1,996	30,682
East Midlands	1,800	30,690
West Midlands	2,060	31,345
East	2,385	34,104
London	2,971	39,778
South East	3,523	35,215
South West	2,122	31,432
Wales	1,202	30,732
Scotland	2,204	33,061
Northern Ireland	883	31,252

Note: The numbers shown above are based on annual salary. ONS caveats that all numbers are intended to provide a broad idea of the number of employee jobs, but they should not be considered accurate estimates.  

Highest and lowest-paying local authorities

Local authority data gives you an even closer look at how pay levels vary.

Many of the highest-earning areas are in London or in the commuter towns surrounding it, where higher-paid roles are more concentrated.

Top 10 highest-paying local authorities

Local authority	Number of jobs (thousand)	Median (£)
Wandsworth	107	49,310
Islington	77	47,411
Kensington and Chelsea	36	46,690
Richmond upon Thames	61	46,594
St Albans	53	45,543
Tower Hamlets	106	45,183
Westminster	58	45,172
East Hertfordshire	60	44,154
Camden	67	44,088
Bromley	118	43,981
Lambeth	115	43,666

Note: All employees on adult rates in the same job for at least a year.

Most of these areas fall either within London or just outside it.

Places like Tower Hamlets, Westminster and Camden sit right next to the City and Canary Wharf, where finance and professional services push salaries well above the national average.

Nearby orbital towns such as Richmond, St Albans and East Hertfordshire are all popular commuter towns with fast access to London and the City and exceptionally high-earning residents.

Top 10 lowest-paying local authorities

Local authority	Number of jobs (thousand)	Median (£)
Kingston upon Hull UA	91	27,309
Pembrokeshire / Sir Benfro	46	27,243
Moray	31	26,943
Denbighshire / Sir Ddinbych	38	26,812
Pendle	28	26,742
Isle of Wight UA	42	26,740
East Lindsey	40	26,705
Melton	16	26,633
West Devon	16	26,556
Nottingham UA	87	26,512
Gwynedd / Gwynedd	43	25,179

Note: All employees on adult rates in the same job for at least a year.

The regions above are all areas with lower-paying industries.

It’s important to note that the data here is based on annual salaries paid, which is different to a measure of the most deprived areas of the UK that would include unemployed data.

Rural and coastal locations tend to rely more on tourism and hospitality, which are lower-paid salaries.

Some places also have fewer large employers or professional roles, so salaries naturally sit below the national average.

Some areas may also have a higher retired population who do not work.

These factors can also impact regional salary levels.

What stands out in the regional data

London is the highest paying region in the UK, with median pay at £39,778.

This is not a surprise for a capital city which has a concentration of roles in finance, tech, legal services and global headquarters.

London will always be a magnet that attracts the best countrywide and worldwide talent for the career opportunities it offers.

Many people will ‘suffer’ the high cost of living to build their careers before moving to other regional areas such as the South East and East of England.

Commuter towns like St Albans and the East Hertfordshire region consistently show up among the highest-paying local authorities.

On the other end of the spectrum, the North East has the lowest regional median at £29,584.

The North East economy has been supported by car manufacturers such as Nissan in Sunderland and the area also has many call centres which take advantage of the lower wages.

Rural and coastal areas often look similar, especially where a lot of the work is part-time or seasonal, so overall earnings don’t climb as quickly as they do elsewhere.

Methodology: How the ONS calculates regional salary data

The figures in this section follow the ONS methodology for the Annual Survey of Hours and Earnings (ASHE):

• Estimates reflect employees on adult rates who have been in the same job for more than a year.
• Job counts are provided for context only and should not be treated as precise employment totals.
• Data quality varies by location and is measured through the coefficient of variation, which indicates the reliability of each estimate.

These details help place the results in context and explain why some regions or local authorities may show wider margins of uncertainty than others.

Download the Average UK Salary datasheet for all local authorities.

Average UK salary by age

Salaries rise and fall as people move through different stages of their careers, which reflects their experience and their rise in role seniority.

People tend to progress and hold higher roles as they have worked longer.

After a certain age, working people tend to again take roles with fewer demands and hours.

These patterns might be obvious, but they do help you to understand where pay pressure might show up in your own team and what people at different experience levels are likely to expect.

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Median annual salaries by age group in the UK:

Age group	Number of jobs (thousand)	Annual Median £	Hourly median £
All employees	24,897	32,890	17.96
18-21	825	13,069	12.59
22-29	3,454	29,855	15.88
30-39	6,229	36,000	19.70
40-49	5,987	37,734	20.65
50-59	5,403	34,835	19.31
60+	2,927	26,750	16.45

Note: Data is taken from employees on adult rates who held the same job for more than a year. The job counts are not precise and are only provided to offer scale.

Note: Data for hourly pay is different from the annual median and only includes those whose pay in the survey period wasn’t affected by absence.

Understanding age-based salary trends

The earnings by age figures reflect the shape of a typical career.

Pay rises quickly through the twenties and keeps building through the thirties, moving from a median of £29,855 at ages 22–29 to £36,000 for people in their thirties.

The highest career point comes in the 40–49 range at £37,734, which is often when experience, confidence and career progression come into effect.

After age 50, the pattern shifts and median pay drops to £34,835. By age 60+ pay declines to £26,750.

During these older age groups, there is natural attrition as some people take early retirement or reduce hours as they want to improve their work/life when mortgages are paid off and their financial position is more stable.

Workers can move into part-time or flexible work, especially if they’re preparing for retirement or managing health or family commitments.

In physically demanding fields, like construction, earnings can dip earlier as people move into lighter or more manageable roles.

Also, some people decide to switch roles or retrain later in their careers to try and fulfil their purpose in life after they have worked hard for many years.

Average UK salary by gender

The median salary for men is £38,466, compared with £27,850 for women, which is a 28% difference across all employees.

The biggest differences can be seen in full-time roles.

That’s largely because men hold more senior, technical or higher-earning positions.

Part-time pay looks closer, but that’s mostly because more women work in part-time roles where salaries are already grouped within similar bands.

Industry patterns highlight these differences even more.

 Some sectors with routine or entry-level work show wide gaps, such as delivery jobs and butchery.

In these areas, historically, there has been a bias of being considered male-oriented work.

Other occupations land much closer together.

Jobs like housing officers, youth and community workers, visual merchandisers, environmental health professionals and train drivers show only small differences between men and women.

These roles usually have clearer pay structures or standardised progression, which helps keep earnings aligned.

At the opposite end of the spectrum, the gap widens again in senior management, specialist technical fields and professional services.

These roles have long career ladders, and that’s where differences in progression, access to higher-paid positions and career breaks tend to show up most clearly over time.

Median earnings for men and women by region

Region	Male annual median £	Female annual median £	Annual difference*	GPG Median**
East Midlands	36,645	25,674	-30%	12.9
East of England	40,851	27,970	-32%	13.4
London	43,695	36,142	-17%	11.8
North East England	34,447	25,641	-26%	9.3
North West England	36,962	26,869	-27%	13.7
Northern Ireland	35,232	27,571	-22%	7.2
Scotland	38,918	28,917	-26%	9.4
South East England	41,801	29,186	-30%	15.8
South West England	37,291	26,114	-30%	13.3
Wales	35,654	26,372	-26%	9.7
West Midlands	37,052	25,815	-30%	15.3
Yorkshire and The Humber	35,999	25,756	-28%	12.3

* The difference between median annual salaries, not the official Gender Pay Gap.

** The Gender Pay Gap (GPG) is calculated as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of average hourly earnings (excluding overtime) of men. For example, a 4% GPG denotes that women earn 4% less, on average, than men. Conversely, a -4% GPG denotes that women earn 4% more, on average, than men.

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Gender pay gap by region

Regions with the smallest gender pay gaps

In the areas below, women earn more than men.

Region	Gender pay gap
Scottish Borders	-13.2
Ealing	-10.2
Lewisham	-6.3
Gwynedd	-6.0
Eastbourne	-5.5

Regions with the largest gender pay gaps

The areas below show the most significant differences where men earn more than women.

Region	Gender pay gap
Ribble Valley	38.9
Mole Valley	36.6
Bracknell Forest	33.3
Rochford	32
South Staffordshire	31.5

Why the regional differences matter

Regional pay differences often come down to the types of jobs available in each area.

Some regions have a stronger mix of professional or technical roles, so salaries tend to be higher.

Others have more jobs in hospitality, care or retail, which naturally brings the median down.

You also see changes based on how many senior roles are available locally and how much competition there is for skilled workers.

And in places where part-time work is more common, earnings usually grow more slowly because the job mix looks different.

Looking at these patterns gives you a clearer sense of what people expect to earn where they live and work.

It also makes regional comparisons much more useful than relying on a single national number.

Average UK salary by industry/occupation

Highest paying industries

You’ll see the very highest salaries in the UK in fields where the bar to entry is naturally high, areas like aviation, specialist medical work and senior roles in technology.

These jobs pay well above the national median because they rely on investment in qualifications, deep expertise, strict training requirements or a level of responsibility that only a small group of people are qualified to take on.

When you compare these roles with jobs at the lower end of the pay scale, the gap becomes clear.

The lowest earners take home 91% less than the highest.

Industry	Number of jobs (thousand)	Median (£)
Aircraft pilots and air traffic controllers	20	107,712
Transport Associate Professionals	25	93,538
Information technology directors	60	90,081
Marketing, sales and advertising directors	216	90,000
Chief executives and senior officials	133	89,835
Specialist medical practitioners	187	88,997
Directors in Logistics, Warehousing and Transport	11	80,518
Train and tram drivers	26	76,176
Public relations and communications directors	N/A	72,020
Medical Practitioners	274	71,918

Across these roles, a few themes repeat.

Positions where decision-making responsibility is tied to financial or operational risk command the highest pay.

Sectors with complex systems or fast-moving environments also lean toward higher salaries because employers want people who can keep things running smoothly at scale.

Train drivers standing alongside medical practitioners and senior directors is one of the clearer outliers.

Their pay reflects the safety-critical nature of the role and the structured progression frameworks built into rail careers.

Lowest paying industries

At the other end of the pay scale, you see roles that make up much of the UK’s part-time, seasonal or high-turnover workforce and are generally considered to be ‘unskilled’.

You’ll find most of these jobs in hospitality, cleaning, catering and parts of sport and leisure.

These industries often run on tighter margins and offer fewer routes into higher-paying positions.

Even so, these roles play a big part in how many small businesses operate.

If your team includes flexible or variable-hours workers, understanding what these jobs typically pay can help you plan and stay competitive when demand picks up.

Industry	Number of jobs (thousand)	Annual Median £	Hourly Median £
Bar staff	84	9,166	12.21
Waiters and waitresses	146	10,000	12.21
Other Elementary Services Occupations	653	11,382	12.38
Kitchen and catering assistants	322	11,840	12.41
Cleaners and domestics	411	11,852	12.64
Coffee shop workers	16	12,170	12.30
Care escorts	14	12,175	13.26
Sports coaches, instructors and officials	62	12,570	15.60
Elementary Cleaning Occupations	469	12,787	12.70
Sports and Fitness Occupations	98	13,819	15.58

Note: These figures are based on the ONS ASHE dataset (October 2025) and show median pay for employees on adult rates who’ve been in the same job for at least a year. Hourly pay figures only include jobs where pay in the survey period wasn’t affected by absence. From April 2026, the minimum wage increases to £12.71 per hour, so treat the hourly medians here as a historic benchmark and make sure your current pay rates meet the legal minimum.

These occupations sit well below the national median.

Many rely on hourly staffing or operate within industries where wage growth flows more slowly because roles are widely available and entry requirements are minimal.

Even within this group, you can see subtle distinctions.

Sports and fitness roles, for example, sit slightly higher because qualifications or coaching licences shift the pay floor upward.

Most common professions

Professional occupations make up the biggest share of the UK workforce.

These are roles you see across education, healthcare, engineering, science and public services, and they generally sit well above the national median.

If you’re looking for where most mid-to-high-earning jobs fall, this is the group that sets much of that range.

You’ll also notice many directors, managers and administrative roles at the top of the list.

They make up a big part of white-collar employment and show the variety of work happening in office-based or specialist settings.

Then, at the other end, you have elementary and service-based jobs.

These roles are common across the country but tend to sit on the lower side of the pay scale, highlighting just how wide the UK’s earnings spread really is, even within the most familiar occupations.

What’s just as interesting is the work you don’t see as often.

Some professions are much smaller in number: farmers, hospital porters, street cleaners and certain warehouse or storage roles represent only a small slice of national employment.

Many of these jobs depend on niche skills, seasonal patterns or very specific operational needs, which keeps their overall job counts low even though they’re essential in the sectors they support.

Highest number of jobs by industry

Industry	Number of jobs (thousand)	Median £
Corporate managers and directors	2,268	57,745
Administrative occupations	2,134	27,006
Business, media and public service professionals	2,057	46,925
Elementary administration and service occupations	1,962	17,287
Business and public service associate professionals	1,883	38,760
Health professionals	1,816	40,294
Caring personal service occupations	1,811	21,082
Science, research, engineering and technology professionals	1,711	51,148
Teaching and other educational professionals	1,447	43,119
Teaching Professionals	1,266	42,660

Note: Data for is taken from employees on adult rates who held the same job for more than a year. The job counts are not precise and are only provided to offer scale.

Download the Average UK Salary datasheet for occupations and industries.

Average salary over last 25 years in the UK

When you look back over the last 25 years, you can see how steadily salaries have climbed in the UK, even if the journey hasn’t been perfectly smooth.

The early 2000s brought predictable year-on-year growth, but things slowed right down after the 2008 financial crisis, when earnings barely moved for several years before starting to pick up again.

From around 2015, pay began rising more consistently, and the biggest jumps show up in the most recent years.

That’s where you see the impact of post-Brexit labour shortages, rising demand for skilled workers and the inflation pressures that pushed wages higher across many sectors.

Altogether, the long-term trend moves upward, but each bend in the curve reflects what was happening in the wider economy at the time.

Looking at it, this way helps you understand why today’s salary expectations feel so different and why pay has accelerated so quickly in the past few years.

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All employees on adult rates whose pay for the survey period was unaffected by absence.

Estimates for 2020 and 2021 include employees who have been furloughed under the Coronavirus Job Retention Scheme (CJRS).

Annual earnings estimates relate to employees who have been in the same job for at least 12 months, regardless of whether their pay was affected by absence.

Comparisons between 2022 and 2023 data should be treated with caution due to methodological changes applied from 2023 onwards that improved how we validate data, particularly for high earners among each occupation.

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How to use UK salary data

For small businesses, salary data affects everything from payroll planning to hiring decisions.

When you understand what people earn across the UK, you can make clearer choices about how much to pay, when to hire and what growth will realistically cost.

Here are a few ways to put the data to work.

Financial planning

You want to bring in great people and pay them fairly, but can your business afford it?

What is the average salary for the roles you need and how does that compare with what you’re offering today?

With salary data in hand, you can set pay levels that feel competitive without stretching your budget.

The more you understand typical earnings in your region and industry, the easier it becomes to plan payroll costs and forecast what your team will cost over the next year.

Benchmarking your salaries

Replacing employees can get expensive quickly. In many cases, it’s far more cost-effective to keep the right people and reward them for staying.

But you can’t do that confidently unless you know what the market is paying.

When you benchmark your salary data against national and regional medians, you can know you’re ahead of the curve, keeping pace or sitting below similar businesses.

With that in mind, you can adjust your employees’ pay where it matters most.

Budget allocation

Salaries tend to make up the biggest part of your budget, no matter how you prefer to plan it.

That’s why having a sense of what people typically earn in the roles you hire for makes such a difference when you’re setting numbers for the year.

Once you know the usual salary range for your core positions, it becomes much easier to budget for new hires, build in expected wage growth and avoid underestimating your payroll costs.

And if you’re using accounting software, you can track these adjustments across teams or projects without having to rebuild your budget every time something changes.

Spotting market trends

How is the economy shaping wages in your sector and are salaries in your area rising quickly or moving at a slower pace?

Keeping an eye on average pay helps you spot changes before they reach your doorstep.

You can see when certain roles are starting to cost more, when wage growth suddenly picks up or when shortages are pushing salaries higher.

 That gives you time to adjust your plans instead of scrambling to catch up later.

It’s also useful for the bigger picture.

Looking at how salaries have shifted over the past decade and the direction they’re moving now helps you plan with more confidence and fewer surprises.

Planning for growth

If you’re planning to grow, salary data helps you understand what that expansion will cost.

Bringing on several new people, building out a new function or moving into a different type of work all come with their own pay expectations.

By checking typical salaries before you hire, you can get a clearer sense of whether your plans are financially realistic.

You’ll also see whether your business can keep up with rising expectations as it scales, or whether you may need to adjust pay to stay competitive over the next few years.

If you’re ready to build these insights into your payroll processes, Sage’s payroll software can help you manage salary changes, stay compliant and keep calculations running smoothly as regulations evolve.

You can explore the full set of features here.

FAQs

What is the average salary in the UK for 2026?

The current median annual salary is £32,890 according to the latest ONS data from October 2025.

Keep in mind that the median is just a starting point.

Some occupations move much faster than the national trend, such as tech-related roles, while others stay flat for years.

When you’re planning salaries for next year, comparing medians for both your industry and your region gives you a much clearer picture.

How much does the average person earn in London?

The median annual full-time salary in London is £39,778, which is 25% higher than the median salary across all regions.

That number reflects the work available in the capital, finance, professional services, law, tech and other roles that traditionally pay more than the national median.

Employers in London also offer higher salaries so they can compete in a tight labour market. Because of this, salaries climb higher and faster in London.

What is a top 10% salary in the UK?

The top 10% of earners make £69,381 per year or more.

You’ll often see these figures in executive roles, specialised technical fields, or specialist occupations with significant qualifications.

What’s striking about the top bracket is how quickly earnings escalate once you reach it.

While the median sits in the low £30,000s, the upper end rises sharply.

This widening gap shows how unevenly high-earning positions are distributed across the workforce.

If you’re assessing whether a salary is “top-tier,” it helps to compare it with both national percentiles and occupation-specific medians.

Many professions have their own internal hierarchy, and a top 10% salary nationally may be closer to average in some specialist industries such as medicine.

What is a good salary in the UK by age?

A “good” salary often depends on where you are in your career.

Workers in their early twenties typically benchmark around £13,000–£29,000, depending on whether they’re in full-time roles or moving into early-career paths.

By the late twenties, the median rises to £29,855, which becomes a common reference point for this age group.

In your thirties and forties, earnings rise more sharply.

Median pay reaches £36,000 for people aged 30–39 and £37,734 for those aged 40–49, which is often considered strong mid-career compensation.

These decades tend to include promotions, leadership responsibilities and industry specialisation.

After age 50, salaries tend to level off or decline slightly, dropping to £34,835, and then to £26,750 for employees aged 60+.

Career changes, part-time work, reduced hours and transitions toward retirement all contribute to this shift.

Looking at medians by occupation and not just age gives a clearer sense of what “good” looks like for your field.

What are the highest-paying jobs in the UK?

The highest-paid roles in the UK sit in a narrow group of professions, almost all tied to leadership, specialist expertise or safety-critical decision-making.

Top earners include aircraft pilots and air traffic controllers, IT directors, marketing and sales directors, CEOs, and specialist medical practitioners.

What stands out is how concentrated the top of the pay scale is.

These roles require either extensive training, deep technical skill, or responsibility that carries significant risk.

Running a company or directing a large technical function isn’t just about experience, it demands judgment, resilience and the ability to make decisions that influence entire organisations.

Pilots occupy one of the most regulated and high-stakes professions in the country. Their work involves years of training, recurrent testing, strict safety requirements and responsibility for hundreds of passengers at a time.

The salary reflects not just the flying itself, but the level of accountability built into the role.

When risk and expertise converge, pay typically rises with them.

While these top earnings may seem far removed from the national median, they help illustrate how wide the UK’s salary distribution is and how different the pathways can be for workers entering professional, technical or executive careers.

Sage accounting software includes solutions for budget management and payroll management, allowing you to simplify accounting workflows and automate processes, freeing up valuable time so you can focus on running your business.

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Methodology

All data is taken from the Office of National Statistics (ONS), Annual Survey for Hours and Earnings (ASHE) from 23rd October 2025 data release.

ASHE covers employee jobs in the United Kingdom. It does not cover the self-employed, nor does it cover employees not paid during the reference period.                                                          

Hourly and weekly estimates are provided for the pay period that included a specified date in April. They relate to employees on adult rates of pay, whose earnings for the survey pay period were not affected by absence.                   

Annual estimates are provided for the tax year that ended on 5th April in the reference year. They relate to employees on adult rates of pay who have been in the same job for more than a year.

ASHE is based on a 1% sample of jobs taken from HM Revenue and Customs’ Pay As You Earn (PAYE) records. Consequently, individuals with more than one job may appear in the sample more than once.

ASHE data are weighted to UK population totals from the Labour Force Survey (LFS) based on classes defined by region, occupation, age and sex.

When you’re running a business, there’s no shortage of urgent priorities competing for your attention.

But tax deadlines for things like VAT, PAYE, National Insurance and Corporation Tax aren’t optional.

Missing them can quickly become expensive.

Staying on top of your tax dates isn’t just a legal requirement.

It helps you avoid fines, interest and penalties, and gives you better control over your finances.

When you know what’s due and when, it’s far easier to plan ahead, manage cash flow and make informed decisions throughout the year.

That’s where this guide comes in.

We’ve pulled together all the key UK tax dates and deadlines you need to know, whether you’re self-employed or running small or medium business.

Add them to your diary now and take one more thing off your plate as you head into 2026.

Here’s what we cover:

What date does the tax year start and end?

The personal tax year runs from 6 April to 5 April the following year.

Also known as the fiscal year, this is the period during which any calculations, assessments and financial reporting will be based for individuals and sole traders.

By the end of the period, you’ll need to have your income and expenses in order, ready to submit to HMRC.

The deadline for filing your self-assessment tax return is 31st January following the end of the tax year.

The first time you file, your tax will also be due for payment by the 31st of January.

However, later years are paid in advance, known as ‘payment on account’.

Payments are calculated by taking your bill for the previous year, and paying half that amount on the 31st of January, and half again on the 31st of July.

When your next tax return is calculated, these two payments on account are deducted, and the balance paid to HRMC.

For limited companies it is a little different.

In this case, the tax and reporting deadlines depend on the business year-end.

Your financial statements must be filed with Companies House no later than nine months after the period-end.

Your corporation tax is due for payment nine months and 1 day after your period-end.

Your corporation tax return is due for filing with HMRC 12 months after your period-end.

Here are the key UK tax year deadlines at a glance.

All tax dates and deadlines to know for 2026

Tax year dates for Self Assessment

31 January 2026	Online self-assessment to be submitted following the end of the tax year 2024/25
31 January 2026	Deadline for paying tax due for the 2024/25 tax year
31 January 2026	First payment on account for the 2025/26 tax year
5 April 2026	End of the 2025/26 tax year (Last chance to claim any overpaid tax from the 2020/21 tax year, as claims for overpaid tax have a four-year limit from the end of the relevant tax year.)
6 April 2026	Start of the 2026/27 tax year
31 July 2026	Second payment on account for the 2025/26 tax year
5 October 2026	Deadline to register for Self Assessment for the 2025/26 tax year
31 October 2026	Paper self-assessment to be submitted following the end of the tax year 2025/26
30 December 2026	Deadline to submit your tax return online to be able to pay your outstanding tax bill through your PAYE tax code if you qualify
31 January 2027	Online self-assessment to be submitted following the end of the tax year 2025/26

Tax year dates for limited companies

9 months after your company’s financial year ends	Deadline to submit your annual accounts to Companies House
9 months and 1 day after the company’s financial year ends	Deadline to pay your corporation tax
12 months after the company’s year-end	Deadline to file the company’s CT600 Company tax return
12 months after the company was set up, (or 12 months after the last confirmation statement date)	Deadline to submit the confirmation statement to Companies House
9 months after the company’s financial year ends	Deadline to submit dormant accounts (for companies not actively trading)

Tax year dates for LLPs

31 October following the end of the tax year – paper filing   31 January following the end of the tax year – online filing	Deadline to file your tax return when the partners are individuals
9 months after the end of the corresponding tax period – paper filing   12 months after the end of the corresponding period – online filing	Deadline to file tax returns when there are only corporate partners
Every 12 months from the date of the firm’s incorporation or 12 months after the last statement was submitted   (You have 14 days to file the confirmation statement after the conclusion of each 12-month period)	Deadline to submit your confirmation statement
9 months after the conclusion of the firm’s financial year (no later)	Deadline to submit the annual accounts to Companies House

Tax year dates for employers, including PAYE

No sooner than two months and no later than four weeks before first pay day	New employers register for PAYE
On or before each payday   (you also need to inform HMRC when you are making the last one of the tax year)	Submit a Full Payment Submission (FPS)
Every 19th monthly	PAYE, CIS and NIC payment to HMRC due by post
Every 22nd monthly	PAYE, CIS and NIC payment to HMRC due electronically
6 April 2026	Update employee payroll records for the new tax year
19 April 2026	Submit the final Employer Payment Summary for the previous year, and pay any tax or National Insurance Contributions (NICs) due
31 May 2026	Give P60s to employees who were on payroll on the last day of the last tax year
6 July 2026	Report employee expenses and benefits and submit your P11D and P11D(b) forms
19 July 2026	Deadline to pay Class 1A NICs by post
22 July 2026	Deadline to pay Class 1A NICs electronically

Deadlines for submitting VAT

Value Added Tax (VAT) is a consumption tax, typically charged at the standard rate of 20%, although reduced and zero rates may apply depending on the goods or services.

A registered business collects, holds and then pays this tax to HMRC on a (usually) quarterly basis.

Up to a turnover of £90,000 a business can choose to register for VAT and over this threshold, you are legally required to register for VAT.

At this point, you have 30 days to register.

You may voluntarily choose to register your business for VAT at any time, regardless of your turnover.

Most VAT-registered businesses submit their VAT returns and payments to HMRC on a quarterly basis.

For businesses with a turnover less than £1.35 million, they can elect for the VAT Annual Accounting Scheme to be paid once a year in advance.

The deadline for each VAT return and payment is one month and seven days after the end of the last period.

That means for the period ending 31 March, the return will need to be submitted by, and the payment made before 7 May.

For the period ending 31 December, the deadline would be 7 February the following year, and so on.

Quarterly VAT periods and payment deadlines (an example of)

Quarter	Period start	Period end	Payment due
Q1	1 January	31 March	7 May
Q2	1 April	30 June	7 August
Q3	1 July	30 September	7 November
Q4	1 October	31 December	7 February

Does the tax deadline include making payments?

The tax deadlines do not always include making payments.

Usually, there is a deadline to file and then the payment deadline will be on a different date.

For example, self-assessment is paid in advance.

Corporation tax is paid in advance of the filing deadline.

VAT payment is due the same day as the filing deadline and PAYE is paid after the filing deadline.

What should I do if I can’t pay on time?

If you can’t pay on time, for whatever reason, the first step is to contact HMRC to arrange a payment plan.

If you are self-employed and don’t already have an existing payment plan or debts with HMRC, you can do this online, but only if you owe less than £30,000.

You also need to have filed your latest tax return, and be within 60 days of the payment deadline, which is another reason to keep on top of these dates.

If you can’t pay your employer’s PAYE contributions, owe £100,000 or less, do not already have existing debts to HMRC, and have not sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due, then there is also an option to set up a payment plan online.

In this case, the criteria are that you plan to pay the debt off within 12 months and do not have any other payment plans or debts with HMRC.

A similar option is available if you owe VAT to HMRC.

This is also possible to do online if you owe £100,000 or less, plan to pay off the debt within the next 12 months and do not have any other payment plans or debts with HMRC.

You also need to have kept on top of your tax returns to date.

If you’re in the Cash Accounting Scheme, Annual Accounting Scheme, or you make payments on account, then an online payment plan is not an option.

If you are unable to set up a payment plan online, speak to HMRC to discuss a realistic proposal for paying your debts. Note that if you are late filing or paying VAT, you accrue penalty points and there is a late payment penalty.

What if I miss the deadline?

If you miss the deadline for submitting or paying your Self Assessment bill, you’ll face a fine of £100 and be charged interest on any late payments.

If you take longer than three months, the fine will start increasing, and the interest will keep accruing.

Limited companies that file accounts to Companies House late are also fined.

In this case, it starts at £150 if the accounts are filed within one month after the deadline.

If you file late but within three months of the deadline, then the fine is £375, and within six months the fine is £750. After that the penalty is £1500.

How do I apply for an extension?

If you’re running a Limited Company and have been affected by events outside of your control, then you can apply to extend your account filing deadline through Companies House.

 You have to make an application before the filing deadline passes, so if you are expecting this to be an issue, it’s worth acting sooner rather than later.

Bear in mind that you can’t apply for an extension just because of everyday challenges – the example HMRC gives is a situation such as a fire destroying your company records.

If you’ve got a good reason, you can apply for an extension by post or online via Companies House.

You’ll need to provide an explanation for why you need the extension and ideally provide some evidence and documentation to support it.

What is the first day you can submit tax returns for the previous year?

A tax return for the previous year can be submitted the moment the new tax year starts.

That means you can submit your Self Assessment tax return on the 6th of April.

Should I submit my tax return early?

Submitting your tax return early takes the pressure off when deadlines are approaching.

Instead of rushing to pull everything together at the last minute, you have time to get your accounts in order and make more considered decisions about your finances.

With more breathing room, you can review your allowable expenses properly, which could help reduce your overall tax bill.

Filing early also means you’re more likely to receive any tax refund you’re owed sooner.

It reduces the risk of missing deadlines and facing penalties and frees up your headspace so you can focus on running your business rather than worrying about paperwork.

Early submission also makes financial planning for the year ahead much easier.

The sooner you file, the sooner you’ll know exactly how much tax you need to pay and you’ll have longer to prepare for it.

This can be particularly helpful if you have a larger bill or need to plan for payments on account.

Remember: just because you submit your tax return early, doesn’t mean you have to pay early.

What is Making Tax Digital?

Making Tax Digital (MTD) is a government initiative designed to modernise the UK tax system and make it easier for businesses and individuals to get their tax right.

The aim is to improve accuracy, reduce errors and help taxpayers stay compliant.

Under MTD, businesses and self-employed people must keep their financial records digitally rather than on paper or spreadsheets alone.

They also need to use MTD-compatible software to record their income and expenses and submit information to HMRC.

You’ll be able to see your tax records, liabilities and payments through your HMRC online account, giving you a clearer, up-to-date view of what you owe.

Instead of submitting annual tax returns, taxpayers may be required to send updates to HMRC every quarter, depending on their circumstances.

From April 2019, VAT-registered businesses with a turnover above the VAT threshold (was £85,000 but is now £90,000) were the first to be required to use MTD for VAT returns.

All VAT-registered businesses must now use MTD for VAT.

From April 2026, self-employed individuals and landlords with income over £50,000 must follow MTD for Income Tax Self Assessment (ITSA) and maintain digital records and update HMRC each quarter using compatible software.

From April 2027, this will extend to those with income over £30,000. Corporation tax is still in the planning stages and is not expected to be implemented before 2026.

Final thoughts

Being on top of accounting and payroll means that you have more time to focus on running your business.

Working smarter with payroll software can significantly help in tax and PAYE preparation to make sure you are always ready for deadlines.

FAQs

What are ‘tax weeks’ and ‘tax months’ in the UK?

In the UK, tax weeks and tax months are used by HMRC for payroll and PAYE reporting. They don’t follow the standard calendar months.

The tax year always runs from 6 April to 5 April the following year. From this,

• A tax month runs from 6th of one month to 5th of the next

Each tax year is divided into:

• 52 tax weeks (sometimes 53 in certain years)
• 12 tax months

These periods are used to work out and report income tax and National Insurance for employees, especially where payroll is run weekly or monthly.

For example, tax month 1 runs from 6 April to 5 May, while tax week 1 runs from 6 April to 12 April.

Even if you pay staff on the same calendar date each month, HMRC still bases PAYE calculations on these tax periods.

Understanding tax weeks and months helps you submit accurate payroll information, avoid reporting errors and stay compliant with HMRC deadlines.

Can you file a tax return before the tax year ends?

In most cases, no, you can’t submit a Self Assessment tax return before the tax year has officially ended on 5 April.

That’s because HMRC needs a complete picture of your income, expenses and tax paid for the full tax year before a return can be filed.

Until the tax year closes, some figures, such as final income totals or allowable expenses, may not be accurate.

However, you can prepare in advance.

Many people use the months leading up to the end of the tax year to:

• Gather records and receipts
• Review income and expenses
• Check allowances and reliefs
• Estimate how much tax they’re likely to owe

Once the tax year ends on 5 April, you can submit your Self Assessment tax return straight away.

Filing early gives you more time to plan for any tax due and helps avoid last-minute pressure ahead of the January deadline.

Do VAT deadlines align with tax year dates?

Not usually. VAT deadlines don’t normally follow the UK tax year, which runs from 6 April to 5 April.

Most VAT-registered businesses submit returns quarterly, and their VAT periods are based on the date they registered for VAT, not the tax year.

 This means your VAT quarters may start and end at different points in the year.

For example, a typical VAT quarter might run from 1 January to 31 March or 1 February to 30 April, rather than lining up with the tax year.

VAT returns are usually due one month and seven days after the end of each VAT period.

If you use the VAT Annual Accounting Scheme, you’ll submit one return per year instead, but your VAT year still won’t usually match the tax year dates.

Because VAT and tax year deadlines often overlap, it’s important to track them separately.

Knowing when each deadline falls can help you manage cash flow, avoid late submission penalties and stay compliant with HMRC.

Being on top of accounting and payroll means that you have more time to focus on running your business.

Working smarter with accounting and payroll software can significantly help in tax and PAYE preparation to make sure you are always ready for deadlines.

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This article was verified by a UK-based Accountant in January 2026. Accounting rules are complex and change frequently and we recommend you seek any accounting advice from a qualified accountant or tax professional.

Get your free small business toolkit

Need help with accounting, payroll and HR admin for your business? This toolkit comprises free templates and checklists to help you manage your key business admin tasks with ease.

Download the toolkit

No theory. No overhaul. Just one workflow, done properly.

Start with the repetitive task that’s draining your time every week.

If you want editable tools to follow along, download the full AI Action Workbook at any point below.

Here’s what we’ll cover:

What “using AI” looks like

You don’t have to become an AI expert or learn complex prompts.

 Simply remove one repetitive task that drains your time every week:

• invoices chased automatically
• receipts captured without manual entry
• cash-flow issues flagged early
• admin time reduced week by week

Example:

A small food business using AI-powered invoice chasing started getting paid up to 7 days faster, saving around 14 hours a week on admin.

One workflow, fixed properly.

The takeaway:

You don’t need to “do AI”.

Simply remove one repetitive task.

Step 1: Identify one task that’s eating your time

You might already know where your pain is. Common starting points:

• Chasing invoices
• Reconciling receipts
• Approving expenses
• Pulling reports together

Quick check:

If this task disappeared tomorrow, would you notice the difference by Friday?

That’s your first AI opportunity.

Step 2: Check your AI readiness

AI readiness isn’t about being technical. It’s about where you’re most prepared to start.

You’re ready to start if you’ve tried any AI tool, have any repeatable admin task, or keep financial data reasonably up to date.

Don’t wait until everything is perfect. Just get started.

AI works best when it’s tied to a single outcome, such as:

• saving time
• improving accuracy
• improving cash flow

Then you choose 1–2 tools that support that goal.

Example combinations you can use:

• Save time → AI assistant + automated data capture
• Improve accuracy → accounting software + workflow automation
• Improve cash flow → automated invoicing + payment reminders

Step 4: Map one simple workflow

This is where AI becomes real.

Take one task and define:

• the tool
• who owns it
• what “better” looks like

Example:

Invoice follow-up → Sage Copilot→ owned by you → faster payments

That’s enough to start.

Businesses that standardise one workflow properly often remove days of admin over a month—not minutes.

The workbook includes an editable workflow template you can use to do it yourself.

Step 5: Measure what matters

You don’t need perfect ROI models.

Rough tracking works:

• hours saved per week
• fewer errors
• faster payments

Simple calculation used in the workbook:

Hours saved per week × 52 × hourly rate = annual value

Even modest savings add up fast—some small firms see five-figure value simply by tracking time they used to ignore.

Step 6: Build momentum over 30 days

The goal isn’t scale. It’s consistency.

A simple 4-week pattern:

• Week 1: test one workflow
• Week 2: review what worked
• Week 3: add one small improvement
• Week 4: lock it in as standard

By the end of 30 days, you’re no longer “trying AI”.

You’re using it.

This page gives you the full approach.

The AI Action Workbook gives you:

• fillable tables
• workflow templates
• a readiness quiz
• a 30-day planner

Use it alongside this page to turn insight into action.

Want the editable tools to follow along?

The AI Action Workbook includes fillable tables, workflow templates, a readiness quiz, and a simple 30-day planner.

At the time of publication of this article, Making Tax Digital for Income Tax is a little under a month away from starting.

By the time you’re reading, it may be already underway.

At either point, as an accountant or bookkeeper, you’ll be feeling the strain of not just increased workload (e.g. five data gathering needs per client compared to one previously), but also transferred emotions from clients as they adapt to the changes.

In this article we look at the latter phenomenon, and ways to cope, as follows:

What is emotional labour and why is it so dangerous?

This article is part three of our series looking at MTD for Income Tax’s introduction, in the context of well-being for accounting professionals.

Part one looked at the basics of creating head space during the MTD roll-out, while part two looked at balancing MTD capacity with the best possible mental health outcomes.

Understanding emotional labour is a core part of this, and is a mental health issue that might not feature highly in many organisational strategies or workload planning. But if you ignore it, you risk serious consequences—especially in the context of MTD.

Essentially, emotional labour means managing or even suppressing your emotions so that you can get on with clients or colleagues, and do what you need to do in the organisation.

Now, to some extent we all do this. We ignore little irritations and know when to let the annoying habits of clients and colleagues wash over us.

However, if you find yourself doing this too often and doing so becomes a struggle, then the effort can take a toll on your psychology.

The term emotional labour dates to 1983 when, in her book The Managed Heart, American sociologist Arlie Hochschild described emotional labour as having to “induce or suppress feeling in order to sustain the outward countenance that produces the proper state of mind in others.”

We won’t dig into too many specifics in this article. Hochschild makes a distinction between emotional labour and emotion work, for example. It’s worth researching if you find it’s piqued your interest.

But in the office, examples might include:

• Remembering people’s birthdays
• Agreeing to pick up a colleague’s work if they suddenly have a domestic emergency
• Providing additional, informal and unpaid support to a colleague
• Dealing with a client who is not good with deadlines or who can’t manage stress

At times of change and with the increased workload burden of Making Tax Digital (MTD), it’s the last in that list which could be most impactful. Emotional labour and the associated psychological pressure can ratchet up rapidly but insidiously.

Emotional labour and MTD for Income Tax

Being aware of emotional labour in a client context is crucial during these times of change.

Very often a client who is confused and unnerved with the new processes associated with MTD for Income Tax being introduced will simply want that confusion and anxiety to be acknowledged by their accountant before they start to take action in a practical sense.

Reassurance and sympathy are essential, and have the benefit of being relatively easy to dispense.

But you need to be aware of the dividing line between good client care on the one hand, and emotional over-involvement on the other.

Clients such as sole traders and small landlords, in particular, probably won’t have colleagues to share their fears and anxieties with. So, you could be the sole conduit.

You need to set your own boundaries in terms of emotional involvement and hours devoted to a particular client.

MTD: Why it’s important to use insight and empathy

Consider a client who appears to be angry about MTD.

In fact, it might be the new technology and processes that are causing them to lash out. It’s very likely they’re experiencing a feeling of being out of control, of being judged, and perhaps a fear of being seen as incompetent or inefficient.

One way of handling a client in this difficult position is to, after listening to their concerns, explain to them that they’re not the only one.

“So many of my clients are telling me exactly the same thing and I completely understand why they’re saying it.”

This acknowledges a client’s concerns, and normalises them.

Whereas telling them, “Don’t worry!” or “You’ll get used to it!” can sound dismissive and patronising.

Allowing a client to let off steam and express their fears and frustration can clear the air before you begin to look at the specific actions that you’re going to take to solve their problems. Don’t interrupt, no matter how tempting. Wait until there’s a clear, natural pause in their flow.

Managing clients who are stressed and anxious about MTD

So, the goal can be to acknowledge client feelings, clarify what’s actually required of them (and this can often be less than they fear) and then give them one or two specific tasks (not five or six).

On your side of the professional divide, it’s worth sitting down with your team to discuss some of the conversations they’re having with clients.

Identify how clients felt, what they complained about, and what their fears were. You can then share ideas about what responses worked in your experience and that of the other members of your team.

What was said that delivered empathy and lowered the emotional temperature? What resonated with a client and allowed them to focus on practical steps?

When talking to clients nobody wants to sound as if they’re reading from a script. But being ready for the questions, and knowing there are effective, tried and tested responses to those questions, can help to deliver a better service to clients while managing your own emotional labour. In the long run, this will safeguard your mental well-being.

As part of this you can borrow from an established therapeutic technique known as compassionate redirection.

It involves acknowledging the other person’s emotion and then steering back to action. You might want to say something along the lines of, “This is obviously really stressful for you, and I can completely understand that. What I can do is make sure the compliance side is handled so that’s one less thing on your plate. Now, let’s focus on what we need from you this quarter.”

Again, being warm, empathetic, and friendly but also clear on what exactly you need from your client will help to reduce their stress and anxiety by removing that feeling of, “I don’t even know where to start.”

You can also think about how you and your team decompress after one of these difficult conversations with a client. Giving a name to the procedure for handling difficult calls from clients—branding it, in effect—can help to embed it within your team.

The benefits of mindfulness

Self awareness is also important as a way of protecting your mental health. This is sometimes known as mindfulness, in that we aim for present-moment, non-judgmental awareness of what’s occurring.

For instance, you might need to be aware that a client who is venting is not your favourite client at the best of times. It might also be that you’re already feeling stressed about something else that is happening in your work or private life when that particular call comes in.

Taking a few seconds to check on your own mood and emotions can better prepare you to deal with those of a client: “OK, I’m having a busy day and the babysitter’s cancelled tonight so I’m feeling on edge. I’m going to have to take a deep breath and be extra patient for the next 20 minutes.”

This is the kind of simple act of self awareness that can help.

Clients expressing frustration and concern is understandable and acceptable, but being abusive and offensive is neither.

It’s worth talking to colleagues to develop a sense of where this important distinction lies. What are the words and phrases that a client should not use with you or a colleague? What is it reasonable for them to ask you to do for them and what is excessive?

Deadlines might be tight especially around key reporting dates, but, for instance, should a client be allowed to demand a piece of work at 5pm be delivered to them before 9am the next day?

Check that you have clearly defined client expectations.

It’s worth taking the time to create a written policy—and if you already have one, then reviewing it on a regular basis. It’s particularly important that more junior team members who might lack confidence and who are likelier to be charged with chasing up files and information are aware of what is and what is not acceptable behaviour by clients.

If that behaviour is unacceptable, they need to know how to respond and who to report it to.

Final thoughts

More generally, creating a culture in which people are aware of the toll that emotional labour can take and feel able to discuss mental health issues is more important than ever.

Remember that the people in your firm who are less likely to talk about their emotions or let off steam in public may well be the ones who are struggling the most.

Have they become particularly quiet and uncommunicative? Are they spending longer hours in the office or online, and missing meetings and lunch breaks?

It’s important that everyone is aware of the tell-tale signs of excessive emotional labour and its psychological impact so that they can identify those symptoms in themselves and others.

An investment of time and resources now to enable you to anticipate and preempt these problems and develop the best strategies will allow you to avoid them causing problems in the future.

The Chancellor’s Spring Statement on 3 March 2026 was deliberately low-key. Unlike a full Budget, it served as a progress check on the UK economy rather than a platform for sweeping new tax measures.

The government had already said it’s committed to one major fiscal event per year, reserving significant policy changes for the Autumn Budget in November.

However, “no new announcements” does not mean “nothing to prepare for.”

A raft of previously confirmed changes take effect soon, from April 2026. Together they add up to a notable shift in costs and compliance requirements for small businesses.

Here’s what we discuss in this article:

Making Tax Digital for Income Tax

From 6 April 2026, sole traders and landlords with qualifying income above £50,000—and who are currently using the Self Assessment system—must keep digital records and submit quarterly updates to HMRC using MTD-compatible software.

We’ve talked about MTD a lot here at Sage Advice so, rather than repeat ourselves, here are some in-depth resources where you can learn more (although you can also view our MTD topic tag):

Research suggests that only around 30% of those affected are currently aware of MTD requirements.

With quarterly submissions and digital record-keeping becoming mandatory, the administrative burden is real, particularly for sole traders and landlords who manage their own books.

What this means for businesses

If your qualifying income exceeds £50,000, you probably already have HMRC-compatible software in place and should be keeping digital records.

If you’re not using software, you should find some as a matter of urgency (did you know Sage offers free MTD software?). Furthermore, make sure you use it to track income and expenses. With technology such as data entry automation, AI like the Sage Copilot digital assistant, and bank feeds, this has never been easier.

Speak to your accountant and bookkeeper now about the quarterly submission process. If they currently handle all of your accounting and tax for you, then they might be able to continue doing so—but you’ll need to hand them your paperwork every three months, rather than every twelve months.

If you fall into the £30,000–£50,000 bracket, use this year to get your systems ready ahead of the April 2027 deadline. Do not wait until the last minute. And if your qualifying income is £20,000 or more, then don’t forget you’ll have to use MTD for Income Tax as of April 2028.

Employer National Insurance contributions, and wage increases

The Spring Statement 2026 does not introduce any new National Insurance contribution (NIC) changes. The key employer NIC changes you need to be aware of were announced previously and apply from April 2026, so make sure you check the latest HMRC rates and thresholds for the 2026/27 tax year before running your first payroll of the year.

We’ve covered this already here on Sage Advice, and you might find the following two articles useful:

In summary, the employer secondary Class 1 NIC rate sits at 15%, and the secondary threshold stays at £5,000 per year until 5 April 2028.

Note that income tax and NIC thresholds for employees are frozen until April 2031.

From 1 April 2026, the National Living Wage for those aged 21 and over rises from £12.21 to £12.71 per hour, a ~4.1% increase. The rate for 18–20-year-olds rises to £10.85 per hour, and the rate for 16–17-year-olds and eligible apprentices increases to £8.00 per hour.

What this means for businesses

Update your payroll systems before April to reflect the new rates.

If you employ staff at or near the minimum wage, model the impact on your total wage bill. For businesses operating on tight margins, this is a good time to review pricing, scheduling, and productivity to absorb the increase.

Furthermore, check whether your business is claiming the Employment Allowance, which can reduce your annual employer NIC bill by up to £10,500.

Review your payroll costs in light of the lower threshold and consider how this affects hiring decisions. Budgeting for the full cost of employment, not just gross salary, is essential.

Business rates

New rateable values take effect from 1 April 2026, meaning business rates bills may change for many premises.

Pubs and music venues in England benefit from a 15% business rates discount for 2026–27, with rates capped at inflation for a further two years.

For most other small businesses, however, rates are expected to increase. Remember that rates are collected by local authorities, and they administer reliefs and exemptions. The government offers a service to calculate rates.

We covered all of this in depth in our Autumn Budget 2025 article here at Sage Advice.

What this means for businesses

Check your new rateable value on the Valuation Office Agency website and challenge it if you believe it is incorrect.

If you run a pub or music venue, confirm that the 15% discount has been applied to your bill. All businesses should factor the updated rates into their cash flow forecasts for the year ahead.

SME lending

Although not linked to the Spring Statement, the government has just announced an £11 billion SME lending package backed by five major banks: Barclays, Lloyds Banking Group, NatWest, HSBC UK, and Santander UK.

This is intended to support business growth and help small businesses access the finance they need to invest.

What this means for businesses

If you are planning capital investment, expansion, or need working capital to manage rising costs, explore the lending options available through these banks.

Prepare a clear business case and up-to-date financial records to strengthen any application. Some software, such as Futrli by Sage, makes it easier to prepare “board packs” for this kind of situation.

Business Asset Disposal Relief

The Capital Gains Tax rate on gains qualifying for Business Asset Disposal Relief (BADR) increases from 14% to 18% from 6 April 2026.

The lifetime limit remains capped at £1 million.

This is relevant to any business owner planning to sell or wind down their business, as it increases the tax payable on qualifying disposals.

What this means for businesses

If you are considering selling your business or transferring assets, review the timing with your tax adviser.

Transactions completed before 6 April 2026 will benefit from the lower 14% rate. For longer-term plans, factor the higher rate into your exit strategy.

Employment Rights Act changes

Major reforms under the Employment Rights Act are scheduled to start taking effect from April 2026, including changes to statutory sick pay and paternity leave. Some areas, such as the regulation of zero‑hours contracts, still depend on secondary legislation, so the detailed rules and exact start dates may shift.

We have discussed this in our payroll year end articles here at Sage Advice, so start there if this is new to you:

What this means for businesses

Review your employment contracts and staff handbooks to ensure they are up to date. If you use zero-hours contracts, keep an eye on developments as secondary legislation for zero-hours is finalised.

Final thoughts: Looking ahead

The Spring Statement 2026 confirmed the government’s focus on economic stability, growth, AI adoption, and tackling youth unemployment.

While no new tax measures were announced, the cumulative weight of previously confirmed changes means April 2026 is a busy month for small businesses. Rising employment costs, new compliance obligations, and shifting tax reliefs all demand attention.

The most important step any small business owner can take right now is to review how these changes affect their specific circumstances. Speak to your accountant, update your systems, and plan ahead. A proactive approach will put you in the strongest possible position for the year ahead.

The phrase ‘unlimited annual leave’ might scare you a little as a business owner and have you picturing either an empty office with tumbleweeds rolling through, or a complete operational meltdown. But the reality is that the standard 28 days plus bank holidays model we are used to, isn’t exactly a guarantee of productivity either.

Unlimited time off isn’t just a trendy perk for Silicon Valley tech giants. For UK SME’s it could be a huge opportunity to rethink flexibility, boost trust and build a culture where performance matters more than hours clocked.

So, is it right for your business? Let’s take a look at the facts.

What is unlimited holiday?

At its core, unlimited time off is exactly what it sounds like. There is no capped allowance on the number of days an employee can take off in a year.

Instead of offering an allotted amount of time to take, employees are trusted to manage their own time. Taking leave when they need it provided their work is done and their team is covered. 

In 2025, 1 in 4 (25%) missed out on some of their annual leave and 1 in 10 workers missed out on 5+ days of annual leave. Yes. Really. And full time employees take or will take around 69% of the leave they are entitled to. So for those afraid employees might take advantage of unlimited holiday, you might want to think again.

Offering unlimited annual leave shifts the employment contract from ‘time-for-money’ to ‘value-for-money’. You stop buying their presence and start buying their output. And in a traditional model, annual leave can be viewed as a debt the company owes the employee but in an unlimited model, leave is flexible and a tool to be used to maintain high performance.

The pros and cons of unlimited annual leave

Like with any disruptive policy, there are both pros and cons to consider.

So, should SMEs adopt unlimited holiday?

Is this model right for a business of 50 people scaling fast?

The case for yes:
SMEs are agile. You don’t have the bureaucratic layers of a FTSE 100 company. You know your people. In a small, high-growth environment, output is visible. If someone isn’t pulling their weight, there’s nowhere to hide. This makes the transition to output-based working easier. Unlimited annual leave aligns perfectly with the “all hands on deck” mentality of a scaling business, work hard when it’s needed, rest fully when it’s not.

The pitfalls to watch:
SMEs often lack the robust performance management systems needed to make this work. If you don’t have clear KPIs (Key Performance Indicators), how do you know if someone has “earned” their time off? If you measure success by “bums on seats,” this policy will fail.

You also need to protect your “hero” employees. In every SME, there are a few people who carry the weight of the world. They are the least likely to take leave. An unlimited policy can accidentally encourage them to work themselves into the ground.

Best practice for implementing unlimited time off

You’ve decided your SME is ready to take the leap and offer unlimited annual leave. Great. But it’s key to remember that a little preparation is needed beforehand to support its success. Don’t just delete the holiday cap and hope for the best.

Here’s how to implement a framework.

1. Set clear guidelines (not rules)

Unlimited doesn’t mean unmanaged. You still need a policy that outlines:

• Notice periods: “For 1-2 days off, give 2 days’ notice. For a week or more, give a month.”
• Coverage: “You must ensure your responsibilities are covered before you leave.”
• Blackout periods: “No leave during the end-of-year audit” (if applicable to your industry).

2. Implement a minimum leave requirement

This is the secret sauce. Instead of a maximum cap, set a minimum requirement (e.g., 25 days). Make it mandatory to take at least this amount. This removes the guilt factor and ensures people actually rest.

3. Lead by example

If the CEO never takes a holiday, the team won’t either. Leadership must model the behaviour. Book a two-week holiday, turn off your Slack notifications and show your team that the business won’t collapse if people disconnect.

4. Monitor usage with tech

You stop counting days for payroll, but you must keep tracking them for wellbeing. Use HR software to monitor who is taking leave and, more importantly, who isn’t. If someone hasn’t taken a day off in three months, that’s a red flag for a manager check-in.

5. Focus on outcomes

Shift your management style entirely. Stop asking “how many hours did you work?” and start asking “did you hit your targets?”. If the targets are met, it shouldn’t matter if they took Friday off.

Real-life examples of unlimited holiday in action

Big names like Netflix and LinkedIn popularised this, but it works for SMEs too.

Consider the example of a UK-based tech agency with 40 staff. They switched to unlimited annual leave but noticed a drop in days taken. Staff were anxious. They pivoted, introduced a “minimum 28 days” rule and incentivised taking two consecutive weeks off with a small cash bonus. The result? Burnout dropped and recruitment costs plummeted because everyone wanted to work there.

Conversely, another SME tried it without clear KPIs. One employee took 50 days off while their team struggled. The resentment caused two resignations. The lesson? The policy wasn’t the problem; the lack of performance management was.

Is it legal to offer unlimited annual leave in the UK?

Even with an uncapped policy, employees are still entitled to a legal minimum of 5.6 weeks’ paid holiday per year (which is 28 days for full-time employees, including bank holidays). Employers must ensure that staff can actually take this time off and aren’t discouraged from using it.

Unlimited leave can’t replace statutory leave or result in employees taking less than their legal entitlement because expectations are unclear or workloads make it difficult.

One key complication is what happens when an employee leaves.

Under a standard holiday policy, unused statutory leave is usually paid out. With unlimited leave, employers need to be careful that the policy doesn’t accidentally create confusion about:

• Whether employees are “using” statutory leave first.
• Whether they could claim they didn’t get the chance to take statutory leave.
• How to calculate outstanding holiday pay fairly.

This is why many UK employers combine “unlimited leave” with a minimum holiday expectation (e.g. “employees must take at least 28 days”), so statutory entitlement is clearly met and documented.

Support flexibility with the right tools

Unlimited annual leave isn’t about handing your team free rein, it’s about building a culture of trust, performance and wellbeing. For UK SMEs, it can be a powerful way to modernise how you work, attract top talent and help your people feel supported to take time off when they genuinely need it.

The most successful unlimited holiday policies aren’t “rules-free”, they’re structured, fair and measurable. That’s where Employment Hero comes in. With Employment Hero’s all-in-one HR platform, you can:

• Automate leave tracking so you always know who’s off, who’s due to take time and who might be at risk of burnout.
• Set minimum leave expectations and alerts to ensure everyone is taking the rest they’re entitled to, without manual admin.
• Tie performance goals to outcomes (not hours) with integrated performance management tools.
• Keep approvals consistent with custom workflows that match how your business actually works.

Unlimited annual leave works best when it’s supported by clarity, visibility and consistency and that’s exactly what Employment Hero’s software helps you deliver. Instead of worrying about spreadsheets, back-and-forth emails or “who’s in, who’s out,” your team gets the freedom to take time off and you get the confidence that holiday compliance and performance standards are upheld.

Get the culture you want and the tools to support it. With Employment Hero, you’re not just offering unlimited leave, you’re empowering your people to thrive while keeping your business running smoothly.