Autumn Budget 2026: FCSA’s 5 contractor asks of John Healey

Ahead of Autumn Budget 2026 on October 28th, here are the five entirely realistic announcements for contractors that the FCSA is asking of chancellor John Healey:

1. Take employer National Insurance (NI) back down
2. Put employment status in statute
3. Freeze the Making Tax Digital for Income Tax threshold at £50,000
4. Outlaw hybrid engagement models
5. Reform HMRC’s Managed Service Company (MSC) rules.

I was a contractor long before I ran the Freelancer & Contractor Services Association (FCSA), so I read Autumn Budget wish-lists with a certain scepticism, writes Chris Bryce, CEO of the FCSA. Most ask for the impossible, then look wounded when they don’t get it. So here are five asks that are deliverable, affordable, and would change something real for UK contractors.

1. Take employer NI back down

Since April 6th 2025, employers have paid 15% on earnings above £5,000. Before that, employers paid 13.8% above a £9,100 threshold. That is not a tweak. The threshold cut, made at Autumn Budget 2024, did more damage than the rate rise did, and it did it at the bottom of the pay scale.

For our corner of the market, the effect of these employer NI changes has been direct. Umbrella company employees are employees. Every employment cost has to come out of the ‘assignment rate,’ and an assignment rate is a finite thing. Contractor recruitment agencies absorbed what they could. Then rates moved. Then workers noticed.

So Mr Healey, please take employer NI back to 13.8% and £9,100. Better still, go under.

Bottom line: If the chancellor wants growth out of the UK flexible workforce, he could start by not taxing the act of employing someone.

2. Put employment status in statute

Twenty years of case law and we still cannot tell a business — with certainty — whether the person in front of them is employed or self-employed. Government has consulted on this more than once. Nothing has landed.

We need a statutory test for employment status. It must be bright-line, testable in advance, not something that only becomes clear three years later with HMRC interest and penalties on top.

Businesses will live with a rule they don’t much like. What they cannot plan around is a rule nobody can state out loud.

Put employment status in statute, Mr Healey, and half of the UK contracting sector’s problems get smaller overnight.

Bottom line: Leave employment status unaddressed at Autumn Budget 2026, and every other reform — for contractors and others — is built on sand.

3. Freeze the MTD threshold at £50,000

Making Tax Digital for income tax went live on April 6th 2026 for qualifying income above £50,000.

But a threshold of £30,000 follows in 2027, and then a threshold of £20,000 follows in 2028.

Here is the part that hasn’t been properly reckoned with. ‘Qualifying income’ means turnover, not profit.

A CIS subcontractor billing £55,000, with £18,000 of materials, plant and travel expenses having to come off the gross, is not a wealthy person. But they are someone who now must file quarterly with HMRC. And in my experience, this someone won’t even know of that quarterly HMRC obligation yet.

Mr Healey, please freeze the MTD ITSA (Making Tax Digital for Income Tax Self-Assessment) threshold at £50,000 and hold it there until HMRC can show the first cohort has bedded in. Then look again at whether gross turnover is the right measure for construction at all.

Bottom line: Freezing the MTD ITSA threshold at £50,000 is necessary, and realistic for October 28th. Exempting CIS subcontractors outright would be cleaner still — but I doubt we’ll get that.

4. Outlaw hybrid engagement models

This is the one that matters most.

Employed for tax. Self-employed for rights. Nobody should be able to build a business out of the gap between those two sentences, and yet businesses are built out of it every week.

Joint and Several Liability (JSL) for umbrella PAYE arrived on April 6th 2026 and it was the right call. We argued for accountability landing across the supply chain, and now it does. But the operators who were never going to comply didn’t reform. They moved.

The most common hybrid engagement model is still the Elective Deduction Model, and it ought to be banned. Close behind it: CIS deduction applied to workers who are plainly under Supervision, Direction or Control (SDC) and should be on PAYE.

What new contractor engagement models has JSL spawned?

Three more have appeared in 2026/27 — direct responses to HMRC’s new JSL rules, not survivals of the old ones:

• The PSC/IR35 exemption ruse: Pushing workers into Personal Service Companies (PSCs) that aren’t real PSCs, leaning on the ‘small company exemption’ from the off-payroll working rules to move liability out of reach.
• The Brolly Bypass: Restructuring the paying entity so it can argue it falls outside the statutory definition of an umbrella company, and therefore outside JSL.
• Non-UK EORs: Offshore payroll intermediaries where the Employer of Record (EOR) sits beyond HMRC’s practical reach.

Chancellor Healey, legislation that names one model and stops there simply tells the bad actors where to stand.

Bottom line: These five hybrid engagement models, three of which are JSL-induced, should be outlawed at Autumn Budget but, ultimately, the government must define the mischief, not the vehicle.

5. Reform the MSC rules

Chapter 9 ITEPA has sat on the statute book since 2007, and it still catches accountants doing ordinary accountancy work for ordinary limited companies. An accounting firm can be dragged into a Managed Service Company Provider (MSCP) argument for the ‘crime’ of offering a fixed fee, a portal and some sensible advice.

It’s a business killer; it deters good advisers from serving contractors at all, and I’ve yet to meet anyone who can explain what problem it now solves that IR35, the off-payroll working rules and JSL do not.

Bottom line: Reform the Managed Service Company legislation, Mr Healey, to stop its unintended consequences killing enterprise, or if not, take it off the statute book altogether.

The takeaway

None of this is a plea for special treatment. The flexible and contractor workforce doesn’t want carve-outs. It wants rules it can read, costs it can price, and enforcement aimed at the people gaming the system rather than the people trying to comply.

Five announcements on October 28th. That’s all.

I said at the start that most wish-lists ask for the impossible. I meant it. None of these five are.