Essential Business Tax Information 2025/26
Running a business in the UK involves navigating VAT registration, Corporation Tax (for limited companies) or Income Tax (for sole traders), Employer's National Insurance, and various other levies. Our calculators help you estimate costs, plan cash flow and make informed financial decisions.
The 2025/26 tax year brought significant changes including increased Employer's NI to 15% (from 13.8%), a reduced Secondary Threshold of £5,000, and the maintained Corporation Tax structure with 25% main rate. Understanding these rates is essential for accurate financial planning and compliance.
Key Business Tax Rates 2025/26
| Tax/Threshold | Rate/Amount | Notes |
|---|---|---|
| VAT Standard Rate | 20% | Most goods and services |
| VAT Registration Threshold | £90,000 | Rolling 12 months turnover |
| Corporation Tax (Main Rate) | 25% | Profits over £250,000 |
| Corporation Tax (Small Profits) | 19% | Profits up to £50,000 |
| Employer's NI | 15% | On earnings above £5,000/year |
| Employment Allowance | £10,500 | Annual NI reduction for eligible businesses |
| Annual Investment Allowance | £1,000,000 | 100% deduction on qualifying assets |
VAT & Sales Tax Calculators
VAT Calculator
Add or remove VAT at 20%, 5% or 0% rates. Calculate net and gross amounts, essential for invoicing and expense claims.
Calculate VAT →Reverse VAT Calculator
Extract VAT from gross amounts. Calculate the pre-VAT price when you only have the VAT-inclusive total.
Calculate Reverse VAT →VAT Flat Rate Calculator
Estimate VAT liability under the Flat Rate Scheme. Compare standard accounting to flat rate to see which saves more.
Flat Rate VAT →Margin Calculator
Calculate profit margins, markups and selling prices. Essential for pricing strategy and understanding your business profitability.
Calculate Margins →Corporation Tax & Business Tax
Corporation Tax Calculator
Estimate Corporation Tax liability based on company profits. Includes marginal relief calculations for profits between £50k-£250k.
Calculate Corp Tax →Dividend Tax Calculator
Calculate tax on dividend income for company directors. Understand the most tax-efficient salary/dividend mix.
Calculate Dividends →Self-Employment Tax Calculator
Calculate Income Tax and National Insurance for sole traders. See your Self Assessment liability and quarterly payment schedule.
Self-Employed Tax →Capital Gains Tax Calculator
Calculate CGT on business asset disposals including Business Asset Disposal Relief (formerly Entrepreneurs' Relief).
Calculate CGT →Payroll & Employment Costs
Employer NI Calculator
Calculate Employer's National Insurance costs at 15%. Essential for budgeting true employment costs including the NI increase.
Calculate Employer NI →Salary Calculator
Calculate employee take-home pay after tax, NI and student loan deductions. Useful for salary negotiations and offer letters.
Calculate Salary →Pension Contribution Calculator
Calculate auto-enrolment pension contributions. See employer and employee contributions at minimum 8% (3%+5%) or higher rates.
Calculate Pension →Holiday Entitlement Calculator
Calculate statutory holiday entitlement for full-time, part-time and irregular hours workers. Includes bank holiday calculations.
Calculate Holiday →Financial Planning & Analysis
Loan Calculator
Calculate business loan repayments and total interest. Compare different loan terms and interest rates for financing decisions.
Calculate Loans →ROI Calculator
Calculate return on investment for business projects. Compare different investment opportunities to allocate capital effectively.
Calculate ROI →Percentage Calculator
Calculate percentage changes, increases and decreases. Essential for year-on-year comparisons and financial analysis.
Calculate Percentages →Inflation Calculator
Calculate the real value of money over time. Understand how inflation affects purchasing power and contract values.
Calculate Inflation →Frequently Asked Questions
What is the VAT registration threshold for 2025/26?
The VAT registration threshold for 2025/26 is £90,000 (increased from £85,000 in April 2024). You must register for VAT if your taxable turnover exceeds this threshold in any rolling 12-month period, or if you expect to exceed it in the next 30 days alone. Once registered, you charge 20% standard rate VAT on most goods and services, with reduced rates of 5% and 0% applying to specific categories like children's car seats and most food. The deregistration threshold is £88,000 - you can apply to deregister if turnover falls below this.
What are the Corporation Tax rates for 2025/26?
For the 2025/26 financial year (starting April 2025), Corporation Tax rates are: 19% small profits rate for companies with profits up to £50,000; 25% main rate for profits over £250,000. Marginal relief applies between £50,000 and £250,000, creating an effective marginal rate of 26.5% in this band. Associated companies must share these thresholds proportionally - two associated companies would each have a £25,000 small profits threshold and £125,000 upper limit. Close investment holding companies pay the main rate regardless of profit level.
How much is Employer's National Insurance in 2025/26?
Employer's National Insurance for 2025/26 is 15% on employee earnings above the Secondary Threshold of £5,000 per year (approximately £96 per week). This represents a significant increase from the previous 13.8% rate and lowered threshold of £9,100. The Employment Allowance remains at £10,500, allowing eligible businesses to reduce their annual Employer NI bill by this amount - but only businesses with previous year NI bills under £100,000 qualify. Class 1A NI on benefits-in-kind is also charged at 15%.
What expenses can I claim for my business?
Allowable business expenses must be incurred "wholly and exclusively" for business purposes. Common deductible expenses include: office costs (rent, utilities, broadband, stationery), travel expenses (business journeys - not regular commuting), staff costs (salaries, employer NI contributions, pension contributions), stock and raw materials, marketing and advertising, professional fees (accountants, solicitors), business insurance, and equipment through capital allowances. If working from home, you can claim a proportion of household costs based on business use, or use HMRC's simplified rate of £6 per week (£312/year) without detailed records. The Annual Investment Allowance allows 100% deduction on qualifying plant and machinery up to £1,000,000 per year.
Last updated: January 2025 | 2025/26 tax year rates | Employer NI 15% included