UK tax rates and thresholds for founders, 2026/27
Every corporation tax, dividend, income tax, National Insurance, VAT and pension figure a UK limited company director needs for the 2026/27 tax year, each one linked to the GOV.UK page it came from.
Every figure checked against GOV.UK on 2026-08-08
This is the reference the Absolv tools are built on. Each of our calculators reads its rates from the same file that generates this page, so a figure here and a figure in a calculator cannot disagree.
Corporation tax
| Item | 2026/27 | Source |
|---|---|---|
| Small profits rate | 19% | GOV.UK |
| Small profits rate applies up to | £50,000 | GOV.UK |
| Main rate | 25% | GOV.UK |
| Main rate applies from | £250,000 | GOV.UK |
| Marginal relief standard fraction | 3/200 | GOV.UK |
| Effective rate between the limits | 26.5% | GOV.UK |
| Tax payable | 9 months and 1 day after the period end | GOV.UK |
| CT600 due | 12 months after the period end | GOV.UK |
Dividends
| Item | 2026/27 | Source |
|---|---|---|
| Dividend allowance | £500 | GOV.UK |
| Ordinary (basic) rate | 10.75% | GOV.UK |
| Upper (higher) rate | 35.75% | GOV.UK |
| Additional rate | 39.35% | GOV.UK |
| Ordinary rate, 2025/26 | 8.75% | GOV.UK |
| Upper rate, 2025/26 | 33.75% | GOV.UK |
Income tax (rest of UK)
| Item | 2026/27 | Source |
|---|---|---|
| Personal allowance | £12,570 | GOV.UK |
| Basic rate | 20% up to £50,270 | GOV.UK |
| Higher rate | 40% to £125,140 | GOV.UK |
| Additional rate | 45% above £125,140 | GOV.UK |
| Personal allowance taper starts | £100,000 | GOV.UK |
| Taper rate | £1 withdrawn for every £2 of income | GOV.UK |
| Effective rate in the taper band | 60% | GOV.UK |
National Insurance
| Item | 2026/27 | Source |
|---|---|---|
| Employer (secondary) rate | 15% | GOV.UK |
| Secondary threshold | £5,000 | GOV.UK |
| Employee (primary) rate | 8% | GOV.UK |
| Primary threshold | £12,570 | GOV.UK |
| Upper earnings limit | £50,270 | GOV.UK |
| Employee rate above the upper earnings limit | 2% | GOV.UK |
| Lower earnings limit | £6,708 | GOV.UK |
| Employment Allowance | £10,500 | GOV.UK |
VAT
| Item | 2026/27 | Source |
|---|---|---|
| Standard rate | 20% | GOV.UK |
| Registration threshold | £90,000 | GOV.UK |
| Forward look period | 30 days | GOV.UK |
| Deregistration threshold | £88,000 | GOV.UK |
Pensions
| Item | 2026/27 | Source |
|---|---|---|
| Annual allowance | £60,000 | GOV.UK |
| Taper: threshold income over | £200,000 | GOV.UK |
| Taper: adjusted income over | £260,000 | GOV.UK |
| Minimum tapered annual allowance | £10,000 | GOV.UK |
Director loans (section 455)
| Item | 2026/27 | Source |
|---|---|---|
| Charge on loans made on or after 6 April 2026 | 35.75% | GOV.UK |
| Charge on loans made before 6 April 2026 | 33.75% | GOV.UK |
| Benefit in kind arises above | £10,000 | GOV.UK |
| Charge payable | 9 months and 1 day after the period end | GOV.UK |
Common questions
What are the UK dividend tax rates for 2026/27?
The dividend allowance is £500. Above that, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. The ordinary and upper rates each rose by two percentage points on 6 April 2026, from 8.75% and 33.75%. The additional rate was unchanged.
What is the corporation tax rate for 2026/27?
19% on profits up to £50,000 and 25% on profits above £250,000. Between the two limits you calculate tax at the main rate and deduct marginal relief using the standard fraction of 3/200, which produces an effective rate of 26.5% on each additional pound of profit inside the band. Both limits are divided by the number of associated companies.
What is the most tax efficient director salary in 2026/27?
For most sole directors it is either £12,570, the personal allowance, or £5,000, the secondary threshold at which employer National Insurance starts. Which one wins depends on your profit level, because that determines whether the corporation tax deduction the salary buys is worth 19%, 25% or 26.5%. A company whose only employee is a single director cannot claim the Employment Allowance, so there is nothing to offset the employer National Insurance cost.
When do I have to register for VAT?
When your taxable turnover over any rolling 12 month period exceeds £90,000, or when you expect to exceed it in the next 30 days alone. The rolling test is not your financial year: it is tested at the end of every month against the preceding twelve. You can apply to deregister if turnover falls below £88,000.
What is the section 455 charge on a director loan for 2026/27?
35.75% of any balance still outstanding 9 months and 1 day after the company year end. The rate is defined as the dividend upper rate for the tax year in which the loan was made, so a loan taken before 6 April 2026 is still charged at 33.75% even on a later return. The charge is refunded once the loan is repaid.
What is the 60% tax band?
Between £100,000 and £125,140 of adjusted net income the personal allowance is withdrawn by £1 for every £2 earned. You pay 40% on the pound you earned and 40% on the 50 pence of allowance it removed, giving an effective marginal rate of 60%. It appears on no HMRC rate table, which is why it catches people.
Run your own numbers
- Corporation tax calculator
- Dividend tax calculator
- Salary, dividend or pension
- The founder money leak
- The VAT threshold ambush
- Can you afford to hire?
- Your filing deadlines
- SEIS and EIS relief
Scope and limits
Income tax rates and bands above are the rest-of-UK figures. Scotland sets its own rates and bands on salary and other non-savings, non-dividend income; dividend rates are the same across the whole UK. Corporation tax, National Insurance and VAT are UK-wide.
Rates here are the headline published figures. They do not account for associated companies, short accounting periods, capital allowances, losses, R&D relief, student loan repayments, benefits in kind, or any of the reliefs that move a real tax bill. They are the starting point, not the answer.