2026/27 Limited Company Tax Rates and Allowances

This page shows limited company tax rates and allowances for the 2026/27 tax year.

Corporation Tax

Tax on Profits

Band: Up to £50,000 Rate: 19%
Band: £50,001 to £250,000 Rate: 19% to 25%*
Band: Over £250,000 Rate: 25%

*Marginal Relief is applied when profits are £50,001 to £250,000. This is calculated as (£250,000 - profit) x 3/200 and is subtracted from the tax you would have been paying at 25%.

Director's Loan Tax (S.455)

If a director borrows money from their company and does not pay it back within 9 months and 1 day from the end of their corporation tax period, the company must pay a temporary 33.75% Section 455 tax on the outstanding amount.

Dividend Tax

The annual dividend allowance means your first £500 of dividend income is tax free. These income thresholds assume you have used your £12,570 personal allowance.

Band: Basic Rate Income Threshold: £12,571 to £50,270 Rate: 10.75%
Band: Higher Rate Income Threshold: £50,271 to £125,140 Rate: 35.75%
Band: Additional Rate Income Threshold: Over £125,140 Rate: 39.35%

National Insurance

Class 1 (Employer)

This is paid directly by employers on top of an employee's wages and is an extra cost to the business rather than a deduction from their pay. Eligible businesses can claim an annual relief worth £10,500 per year to wipe out their initial Class 1 (Employer) National Insurance bills (not available to single-director payrolls).

Band: Up to £5,000 Rates: 0%
Band: Over £5,000 Rates: 15%

Class 1 (Employee)

This is deducted directly from employee salary payments and is calculated and administered by the business via PAYE.

Band: Up to £12,570 Rates: 0%
Band: £12,571 to £50,270 Rates: 8%
Band: Over £50,270 Rates: 2%

Class 1A

This is paid by the business on employee benefits at a flat rate of 15%.

VAT

See the VAT Rates for 2026/27 for the latest rates.

Annual Tax on Enveloped Dwellings (ATED)

ATED is a yearly UK tax on corporate entities such as companies, corporate partnerships and collective investment schemes that own residential property valued over £500,000.

Property Value Band: Up to £500,000 Annual Charge: £0
Property Value Band: £501,000 to £1,000,000 Annual Charge: £4,600
Property Value Band: £1,000,001 to £2,000,000 Annual Charge: £9,450
Property Value Band: £2,000,001 to £5,000,000 Annual Charge: £32,200
Property Value Band: £5,000,001 to £10,000,000 Annual Charge: £75,450
Property Value Band: £10,000,001 to £20,000,000 Annual Charge: £151,450
Property Value Band: Over £20,000,000 Annual Charge: £303,450

Economic Crime (Anti-Money Laundering) Levy

The Economic Crime Levy is a yearly fee for businesses that are regulated for anti-money laundering and have a UK revenue of more than £10.2 million per year.

Revenue: Small Entity (Less than £10.2m) Annual Charge: Exempt
Revenue: Medium Entity (£10.2m to £36m) Annual Charge: £10,000
Revenue: Large Entity (£36m to £1bn) Annual Charge: £36,000
Revenue: Very Large Entity (Over £1bn) Annual Charge: £500,000

Research and Development Tax Relief

Type: R&D Merged Scheme Rate: 20% Business Requirements:
  • Business is trading
  • Liable for UK Corporation Tax
  • Initiated and controlled an eligible R&D project
Type: Enhanced R&D Intensive Support (ERIS) Rate: 26.97% Business Requirements:
  • Less than 500 staff
  • Under €100m turnover or €86m gross assets on the balance sheet
  • Must be loss-making
  • Valid R&D spend must equal at least 30% of total business expenses
  • Claiming for an accounting period on or after 1 April 2024

Creative Industry Tax Relief

Type: Audio-Visual and Video Games Expenditure Credits (AVEC / VGEC) Rates:
  • Video Games, Films and TV Programmes: 34%
  • Animated Films, Animated TV Programmes and Children's TV Programmes: 39%
  • Independent Films: 53%
 		Business Requirements:
  • Be a UK Limited Company liable for Corporation Tax and directly responsible for the project's development and spending
  • Pass the points-based British Film Institute test certifying the project as culturally British
  • At least 10% of core production costs must be spent on goods or services used or consumed in the UK
  • The project must be publicly released via cinema (films), broadcast/streaming (TV), or supply (video games)
  • The following categories must meet the above and additional criteria shown below:
  • Animated Films: At least 51% of the costs must be spent on animation
  • Independent Films: Have costs less than £23.5m, have a UK writer, director or be an official co-production and must have begun principal photography on or after 1 April 2024
  • High-End TV Programmes: Minimum slot length greater than 20 minutes, average cost of at least £1 million per hour, and must be drama, comedy, or documentary
  • Children's TV Programmes: Primary target audience must be under 15 years old
  • Animated TV Programmes: At least 51% of the costs must be spent on animation