Free professional tools for UK businesses. Calculate VAT, corporation tax, profit margins, break-even points, and mileage claims with HMRC-compliant calculators.
Add or remove VAT at 20% standard rate. Calculate net and gross amounts instantly with our HMRC-compliant tool.
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Calculate NowRunning a successful business in the United Kingdom requires accurate financial calculations for tax compliance, strategic pricing decisions, and comprehensive profitability analysis. Our free business calculators are specifically designed for UK companies, limited liability partnerships, sole traders, and self-employed professionals operating under HMRC regulations.
The 2025/26 tax year has introduced significant changes that affect businesses of all sizes. The increase in employer National Insurance contributions to 15% and the reduction of the secondary threshold to £5,000 means that accurate payroll calculations are more important than ever. Our calculators incorporate these latest changes to ensure your business remains compliant whilst optimising your tax position.
Before diving into calculations, it's essential to understand how different business structures are taxed in the UK:
The following table provides a comprehensive overview of the tax rates that affect UK businesses in the current tax year:
| Tax Type | Rate | Threshold/Notes |
|---|---|---|
| VAT Standard Rate | 20% | Most goods and services |
| VAT Reduced Rate | 5% | Home energy, child car seats, mobility aids |
| VAT Zero Rate | 0% | Food, children's clothing, books, public transport |
| VAT Registration Threshold | £90,000 | Compulsory registration above this turnover |
| Corporation Tax (Main Rate) | 25% | Profits over £250,000 |
| Corporation Tax (Small Profits) | 19% | Profits under £50,000 |
| Corporation Tax (Marginal) | 19-25% | Profits £50,000-£250,000 |
| Employer NI Rate | 15% | Above £5,000 threshold (increased from 13.8%) |
| Employment Allowance | £10,500 | Reduces employer NI liability |
| Dividend Allowance | £500 | Tax-free dividend income |
HMRC offers several VAT schemes designed to simplify accounting for small businesses. Understanding which scheme suits your business can save both time and money:
The Flat Rate Scheme allows businesses with VAT-taxable turnover of £150,000 or less to pay a fixed percentage of their gross turnover to HMRC, rather than calculating VAT on every transaction. The percentage varies by business sector, ranging from 4% for food retailers to 14.5% for architects. First-year businesses receive a 1% discount. This scheme simplifies record-keeping significantly but may not be beneficial if you have substantial VAT-able purchases.
Under the Cash Accounting Scheme, you only account for VAT when you receive payment from customers, rather than when you invoice them. This is particularly beneficial for businesses with cash flow concerns or those that regularly deal with late-paying customers. The turnover limit is £1.35 million to join, though you can remain in the scheme until turnover exceeds £1.6 million.
The Annual Accounting Scheme allows you to submit just one VAT return per year instead of quarterly returns. You make interim payments throughout the year based on your previous year's VAT liability, with a balancing payment at year-end. This reduces administrative burden and helps with cash flow planning. Businesses with turnover up to £1.35 million can join.
When employees or self-employed individuals use their personal vehicles for business travel, HMRC provides approved mileage rates that can be claimed tax-free:
| Vehicle Type | First 10,000 Miles | Over 10,000 Miles |
|---|---|---|
| Cars and Vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
| Passenger Payments | 5p per mile | 5p per mile |
It's important to note that these rates cover fuel, insurance, road tax, MOT, servicing, and depreciation. You cannot claim these expenses separately if you're using the mileage allowance. For company car users, only the fuel element can be claimed using HMRC's advisory fuel rates.
Understanding which expenses are tax-deductible is crucial for minimising your tax liability legally. HMRC allows businesses to deduct expenses that are "wholly and exclusively" for business purposes:
For companies with profits between £50,000 and £250,000, marginal relief applies. This creates an effective rate between 19% and 25%. The formula is:
Marginal Relief = (Upper Limit - Profits) × (Profits - Lower Limit) / Profits × 3/200
For example, a company with £150,000 profits would pay approximately £33,750 in Corporation Tax (an effective rate of 22.5%). Our Corporation Tax Calculator handles these complex calculations automatically, including adjustments for associated companies that share the thresholds.
Missing tax deadlines can result in penalties and interest charges. Here are the critical dates for UK businesses:
| Tax Type | Deadline | Penalty for Late Filing |
|---|---|---|
| Self Assessment (Online) | 31 January | £100 initial, escalating to £1,600+ |
| Corporation Tax Payment | 9 months + 1 day after year end | Interest charges from due date |
| Corporation Tax Return | 12 months after year end | £100 (3 months), £200 (6 months) |
| VAT Returns (Quarterly) | 1 month + 7 days after quarter end | Surcharge 2-15% of VAT due |
| PAYE/NI (Monthly) | 22nd of following month | 1-4% of amount due |
| Annual Accounts (Companies House) | 9 months after year end | £150-£1,500 depending on delay |
Understanding the mathematics behind business calculations helps you make informed decisions:
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