Running a limited company gives you more ways to plan your tax, but more rules to follow. This guide covers the main taxes and deadlines for a small UK company in 2026/27, and how directors usually pay themselves.
Your company is a separate legal person
The company owns its income, pays its own tax and files its own accounts. Money in the company bank account isn’t yours until you take it out as salary, dividends or expenses repaid.
Corporation Tax
For financial years starting 1 April 2026:
| Taxable profits | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| £50,001 to £250,000 | 25%, reduced by marginal relief |
| Over £250,000 | 25% (main rate) |
These limits are shared between associated companies and reduced for short accounting periods.
Key deadlines
| What | When |
|---|---|
| Pay Corporation Tax | 9 months and 1 day after the end of your accounting period |
| File the Corporation Tax return (CT600) | 12 months after the end of your accounting period |
| File accounts at Companies House | 9 months after your year end (private companies) |
| Confirmation statement | At least once every 12 months |
You must file a return even if the company made a loss or owes no tax. HMRC and Companies House both charge penalties for late filing.
Paying yourself: salary and dividends
Most owner-directors take a mix of a modest salary and dividends.
Salary is a business expense, so it reduces Corporation Tax. For 2026/27:
- Employee NI: 8% on earnings above £12,570
- Employer NI: 15% on earnings above £5,000
- The £10,500 Employment Allowance isn’t available if a director is the company’s only employee
A salary at the right level keeps your State Pension record building while keeping NI low. The best figure depends on your circumstances, so we’ll set it with you each year.
Dividends are paid from profits after Corporation Tax. There’s no NI on dividends. For 2026/27, the first £500 is tax-free, then:
| Dividend tax band | Rate |
|---|---|
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
You can only pay dividends if the company has enough retained profits (distributable reserves), and each one needs the right paperwork. See our guide to Declaring Dividends for Owner Managed Companies.
IR35: if you contract through your company and the work would be employment if you did it directly, the off-payroll rules can apply. Your income is then taxed much like a salary. Get in touch if you’re unsure.
VAT
You must register if taxable turnover goes over £90,000 in a rolling 12 months, or you expect it to in the next 30 days. You can register voluntarily below that.
- Standard rate: 20%, usually filed quarterly through Making Tax Digital-compatible software
- Flat Rate Scheme: you pay HMRC a fixed percentage of your VAT-inclusive turnover. If you’re a “limited cost business” the rate is 16.5%, and there’s a 1% discount in your first year of VAT registration
Allowable expenses
Costs are deductible if they’re incurred wholly and exclusively for the business. Common examples:
- Business travel, mileage and subsistence (not ordinary commuting)
- Salaries and employer pension contributions
- Phone, broadband and software in the company’s name
- Stationery, printing and postage
- Advertising, marketing and your website
- Business insurance
- Accountancy and professional fees, and relevant professional subscriptions
Records and Companies House ID checks
Keep company records (invoices, receipts, contracts and bank statements) for at least 6 years from the end of the accounting period they relate to.
Since 18 November 2025, every director and person with significant control must verify their identity with Companies House. Existing directors confirm this with their next confirmation statement. As an Authorised Corporate Service Provider, we can verify you.
Is a limited company right for you?
It can save tax once profits are healthy, but costs more to run and the rules are stricter. Our guide Employed, self-employed or limited company? compares the options.
Want help? Everyday Accountants prepares company accounts, Corporation Tax returns, payroll and dividend paperwork on a fixed monthly fee. Get in touch for a free, no-obligation quote.
Information correct for the 2026/27 tax year at the time of writing.
Related guides: Incorporation relief: formal claim changes | Registering a UK company in 2026 | Companies House ID verification for directors | Benefit in Kind rates 2026/27 | Where to start on closing a company
Need help? See our limited company accounts service, or get in touch for a free, no-obligation chat.