Frequently Asked Questions

Corporation Tax rates depend on your company's taxable profits. For accounting periods falling within the financial year beginning 1 April 2026, the rates are generally:

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• Small profits rate: 19% for companies with taxable profits of £50,000 or less.

• Marginal Relief: companies with taxable profits between £50,000 and £250,000 may qualify for relief, which gradually increases the effective rate of Corporation Tax from 19% towards 25%.

• Main rate: 25% for companies with taxable profits above £250,000.

These thresholds may be reduced where a company has associated companies or an accounting period shorter than 12 months. Special rules also apply to certain companies, including those with ring-fence profits.

If you have income in addition to your employment income, you may need to report it through a Self Assessment tax return, depending on your circumstances. Any additional tax due is generally payable by 31 January following the end of the tax year. For the 2025/26 tax year, the usual online filing deadline and payment deadline for any tax owed are both 31 January 2027.

You may also need to make payments on account towards your next tax bill. These are usually based on your previous year's Self Assessment liability and are payable in two instalments: 31 January and 31 July. Payments on account generally apply if your previous Self Assessment tax bill was at least £1,000 and less than 80% of the tax you owed was collected at source, for example through PAYE. Exceptions and different rules may apply depending on your circumstances.

A dividend is a payment a company makes to its shareholders from its available profits. You may receive dividends from your own limited company, if you are a shareholder, or from other companies in which you hold shares. Dividend income is subject to specific tax rules, and any amount above the annual dividend allowance may be taxable. QuickPro Accounting ensures your dividend income is correctly reported on your Self Assessment tax return and the tax due is calculated accurately.

The tax you pay on dividends above your available allowances depends on your Income Tax band.

Dividend Tax Rates for 2026/27

The tax you pay on dividends above your available allowances depends on your Income Tax band.

For the 2026/27 tax year, the dividend tax rates are:

• Basic rate: 10.75%

• Higher rate: 35.75%

• Additional rate: 39.35%

The annual dividend allowance is £500. Your applicable rate depends on your total taxable income, including dividends.

Income from employment is generally taxed at source through Pay As You Earn (PAYE). HMRC issues your employer with a tax code, which is used to calculate how much Income Tax should be deducted from your pay. The standard tax code for most people with one job or pension is 1257L, which usually reflects the standard Personal Allowance of £12,570 per tax year.

For the 2026/27 tax year, in England, Wales and Northern Ireland, the standard Income Tax rates are:

• Personal Allowance: 0% on the first £12,570 of eligible income.

• Basic rate: 20% on taxable income up to £37,700 above the Personal Allowance.

• Higher rate: 40% on taxable income from £37,701 to £125,140 above the Personal Allowance.

• Additional rate: 45% on taxable income above £125,140.

Your Personal Allowance is gradually reduced when your adjusted net income exceeds £100,000 and is reduced to zero at £125,140.

If you receive income that has not been fully taxed at source, such as rental income, self-employment profits or certain dividends, you may need to report it through a Self Assessment tax return. QuickPro Accounting can help you report your taxable income correctly and calculate the tax due.

Businesses generally need to register for VAT when their taxable turnover exceeds £90,000 over a rolling 12-month period, or when they expect it to exceed £90,000 in the next 30 days alone. Businesses can also choose to register voluntarily if their taxable turnover is below this threshold. VAT registration requirements depend on the nature of the business and its taxable supplies.

What Are the Benefits of Salary Sacrifice Schemes?

A salary sacrifice arrangement allows an employee to agree to a reduction in their gross contractual salary in exchange for a benefit provided by their employer. Depending on the benefit and the employee’s circumstances, this may reduce Income Tax or National Insurance contributions. Common examples include workplace pension contributions, electric company cars and cycle-to-work schemes. The tax treatment varies by benefit, and salary sacrifice may affect pensionable pay, statutory payments or other earnings-related benefits. It is important to review the scheme’s terms and potential savings before entering into an arrangement.

With an electric car salary sacrifice scheme, you may be able to reduce your Income Tax and National Insurance contributions, depending on your circumstances. For fully electric company cars, the Benefit-in-Kind (BiK) tax rate is 4% for the 2026/27 tax year. This means the taxable benefit is generally calculated as 4% of the car’s P11D value, rather than the full value of the vehicle. The actual tax you pay depends on your tax band and the details of the arrangement.