A Fiscal Event Is Not the Only Thing Landing in October
Ask a UK practice owner what October holds and you will hear about the Budget, quarterly updates and the run in to January. Very few will mention employment law. That is a problem, because two separate waves of Employment Rights Act 2025 obligations take effect on the 1st of October and the 30th of October 2026, the new Fair Work Agency is already up and running, and the biggest change of all, the reduction in the unfair dismissal qualifying period, arrives on January 1st 2027.
None of this sits in a tax return. All of it sits squarely in the payroll bureau, in the payroll data you hold, and in the phone call an owner managed business makes when a member of staff resigns badly. If your firm runs payroll for even a handful of clients, you are already closer to these changes than most HR consultants are.
What Actually Changes This Month
The autumn wave is broad, but four elements matter most to accountants and their clients:
- Employment tribunal time limits double. From October 1st 2026 the limit for bringing most claims rises from three months to six months, with a slightly later date for breach of contract claims in Scotland.
- Tipping rules tighten. Consulting workers on a tipping policy moves from recommended to required, with a revised code of practice, which pulls tronc arrangements, allocation records and the PAYE and National Insurance treatment of tips back onto the agenda for hospitality, salon and leisure clients.
- Trade union duties arrive. Employers gain a duty to inform workers of their right to join a union, and from October 30th unions gain new rights of access to workplaces. Clients who have never dealt with a union may receive a request.
- Harassment duties strengthen. From October 30th employers must take all reasonable steps to prevent sexual harassment, and become liable for harassment of their staff by third parties such as customers, suppliers and contractors.
Separately, the expanded right to work checking regime applies from the 1st of October 2026, widening the population of engagements where checks are expected and formalising the use of digital identity verification providers.
Holiday Pay Records: The Quiet Obligation With Real Teeth
The change most likely to bite your clients is also the least discussed. Employers must now keep adequate records demonstrating compliance with holiday pay and entitlement rules, and retain them for six years. From 2027 the Fair Work Agency takes on holiday pay enforcement, and the current consultation, which closes on September 22nd 2026, proposes penalties of up to 200 per cent of arrears per worker, capped at £20,000 per worker, with the agency able to look back six years but no further than December 2025.
Read that through a payroll lens. Any client with variable hours, term time only staff, rolled up holiday pay habits or casual workers has an exposure that compounds quietly for six years. You are the only adviser who can see it, because you are the one holding the hours and pay data. A single afternoon spent sampling holiday accrual calculations for your ten highest risk payroll clients is probably the most valuable non tax work your firm can do this quarter.
Longer Time Limits Mean Longer Memories
Doubling tribunal time limits sounds like a lawyer's issue. In practice it is a records issue. A dispute about a deduction, a final payslip, an unpaid commission or a holiday balance can now surface six months after the event rather than three. Payroll files, timesheets, starter and leaver paperwork and payslip archives need to be complete and retrievable, not scattered across email threads and a former bookkeeper's spreadsheet.
If your engagement letters are silent on who retains what, and for how long, this is the moment to fix that. Clarity protects the client and it protects your firm.
Your Practice Is an Employer Too
It is easy to read all of this as client work. The harassment provisions apply to your firm from the 30th of October, and the third party liability point is uncomfortably relevant for a profession whose staff attend client premises, deal with difficult directors and work at events. Taking all reasonable steps is a higher bar than taking reasonable steps, and it is evidenced by risk assessments, policies, training records and a reporting route that people actually trust.
Practices with 250 or more employees should also revisit the gender pay gap and menopause action plan expectations, which are set to become mandatory in 2027.
What Is Coming on January 1st 2027
Plan now for the changes that will reshape hiring decisions:
- The unfair dismissal qualifying period falls from two years to six months.
- The cap on the unfair dismissal compensatory award is removed, which materially increases exposure for claims by higher earners.
- Restrictions on fire and rehire make dismissals to force through certain contract variations automatically unfair, subject to a narrow financial distress exception.
Guaranteed hours offers for zero and low hours workers, flexible working changes, bereavement leave and umbrella company regulation follow later in 2027.
A Four Week Plan for Your Firm
- Week one: segment your payroll client list by risk. Flag variable hours, tipping, casual labour and agency use.
- Week two: sample holiday pay calculations for the flagged clients and document what you find. Confirm record retention arrangements in writing.
- Week three: send a short client briefing covering tips, holiday records, right to work checks and the January 2027 dismissal changes. Keep it to one page and one call to action.
- Week four: put your own house in order. Refresh your harassment policy and training, log your risk assessment, and diarise the January 2027 items into your practice planning cycle.
Turning a Deadline Into a Fee Conversation
Firms have spent 2026 absorbing quarterly updates, new supervision arrangements and a revised UK GAAP. Understandably, few have looked for extra work. Yet this is precisely the kind of change clients will pay for, because the risk is quantifiable, the data sits in your systems and the alternative is an unbudgeted penalty or tribunal award. A holiday pay health check, a tips and tronc review or an annual employment compliance review are all deliverable from information you already hold.
The practices that come out of this well will not be the ones that read the legislation most carefully. They will be the ones that called their clients first.
The Bottom Line
Tax reform has dominated the profession's attention for two years, and it will keep doing so. Meanwhile, the rules governing your clients' single largest cost, their people, have changed twice this month and will change again in January. Accountants who treat payroll as a processing task will miss it. Those who treat it as a risk and advisory dataset will find it is one of the most commercial conversations available to them before the Budget lands.
