HMRC Updates
Income Tax: Personal allowance frozen at £12,570 CGT: Annual exempt amount is £3,000 NICs: Main Class 1 Employee NI rate reduced VAT: MTD system requirements fully enforced SDLT: First-time buyer relief threshold £425,000 Corporation Tax: Main rate 25% for profits over £250k IHT: Nil-rate band frozen at £325,000 Pension: Annual allowance set at £60,000
Business Tax 2026/27: Limited Companies & Sole Traders
Business Tax · 2026/27

Business tax,
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Free, plain-English guidance on every business tax for the 2026/27 year — Corporation Tax, VAT, business rates, CIS, R&D relief and your duties as an employer. When you need a human, we match you with a verified UK specialist at no cost to you.

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Your 2026/27 snapshot

Live rates
Corporation Tax (main)25%
Small profits rate19%
VAT registration£90,000
Employer NIC15%
Verified figuresUpdated May 2026
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Limited companies
Sole traders
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Directors

Your guide to UK business tax in 2026/27

Whether you run a limited company, work as a sole trader, or employ a team, the tax system reaches your business from several directions at once: tax on profits, tax on sales, tax on premises, tax on the people you pay, and the reliefs that can pull some of it back. The 2026/27 tax year (6 April 2026 to 5 April 2027 for income tax and PAYE; financial year from 1 April 2026 for Corporation Tax) keeps most headline rates steady but brings real change underneath.

Corporation Tax stays at a 25% main rate and a 19% small profits rate, with marginal relief between £50,000 and £250,000 of profit. The VAT registration threshold remains £90,000. The biggest shifts are elsewhere: business rates were reformed from April 2026 into a five-multiplier system with permanently lower rates for retail, hospitality and leisure and a new higher multiplier for the largest properties; the employer National Insurance rate is 15% on earnings above a £5,000 secondary threshold, softened by a £10,500 Employment Allowance; capital allowances change, with the main writing-down allowance falling to 14% and a new 40% first-year allowance; and stricter Construction Industry Scheme anti-fraud rules took effect in April 2026.

This hub gives you a clear, accurate guide to each business tax, with worked examples, filing deadlines, the HMRC forms and services you will use, and links to our free calculators. Everything is free, and when your situation needs a professional, we will match you with a verified UK specialist at no cost. Choose a topic below to begin.

Key 2026/27 figures

The numbers that matter.

25%
Corporation Tax main rate
19%
Small profits rate (under £50k)
£90,000
VAT registration threshold
15%
Employer National Insurance rate
£10,500
Employment Allowance
20%
Merged R&D expenditure credit
50.8p
Top business-rates multiplier
£3m
Apprenticeship Levy threshold
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Common questions

Business Tax FAQs

The rates, thresholds, deadlines and reliefs business owners ask about most — answered for 2026/27.

What taxes does a limited company pay?
Mainly Corporation Tax on profits, plus VAT if registered, business rates on premises, and PAYE, National Insurance and possibly the Apprenticeship Levy as an employer. Directors also pay personal tax on salary and dividends.
What is the Corporation Tax rate for 2026/27?
25% on profits over £250,000, 19% on profits up to £50,000, with marginal relief tapering the rate between those thresholds.
Do sole traders pay Corporation Tax?
No. Sole traders pay Income Tax and Class 2 and Class 4 National Insurance on their profits through Self Assessment. Corporation Tax applies only to companies.
When must I register for VAT?
When your taxable turnover exceeds £90,000 in any rolling 12-month period, or if you expect to exceed it in the next 30 days alone. You can also register voluntarily.
How much is employer National Insurance?
15% on each employee's earnings above the £5,000-a-year secondary threshold for 2026/27. The Employment Allowance can offset up to £10,500 of this for eligible employers.
What is the Employment Allowance?
A reduction of up to £10,500 in your employer Class 1 NIC bill for 2026/27, claimed through payroll. Most smaller employers qualify; connected companies share one allowance.
When is Corporation Tax due?
Nine months and one day after the end of your accounting period for most companies. The CT600 return is filed within 12 months of the period end.
How do business rates work in 2026/27?
Your bill is your property's rateable value multiplied by the relevant multiplier. From April 2026 there are five multipliers reflecting property type and value.
Can small businesses get rate relief?
Yes. Small Business Rate Relief gives 100% relief where the rateable value is under £12,000, tapering to nil at £15,000, if you occupy one main property.
What is the Construction Industry Scheme?
A scheme where contractors deduct tax from payments to subcontractors and pass it to HMRC — usually 20% for registered subcontractors, 30% if unregistered, or 0% with gross payment status.
Can I claim R&D tax relief?
If your company is liable to Corporation Tax and carries out qualifying research seeking an advance in science or technology, you can claim the merged 20% R&D expenditure credit, or ERIS if you are a loss-making R&D-intensive SME.
What is the Apprenticeship Levy?
A 0.5% charge on employers with an annual pay bill over £3 million, reduced by a £15,000 allowance. Funds are used to pay for apprenticeship training.
Should I take salary or dividends as a director?
Most owner-directors take a small salary plus dividends. The most efficient mix depends on profits, other income and the dividend rates. Our director salary calculator helps you model it; for a tailored answer, speak to a specialist.
Do I need an accountant?
It is not legally required, but a company must file accurate accounts and a CT600, run compliant payroll and meet VAT and MTD rules. Many owners use an accountant to stay compliant and efficient.
What happens if I file or pay late?
HMRC charges automatic penalties and interest for late returns and payments across Corporation Tax, VAT, PAYE and CIS. Filing on time, even if you cannot pay in full, limits the penalties.
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UK Tax Hero provides general tax guidance and a free expert-matching service for the 2026/27 tax year. It is not personal tax, legal or financial advice. Figures are based on published HMRC rates and may change. Always confirm details on GOV.UK or with a qualified professional before acting.