UK Business Calculators

Free tools for small businesses, sole traders and limited companies. Calculate VAT, estimate Corporation Tax, plan payroll costs and analyse profit margins - all updated with 2025/26 HMRC rates.

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 Rate20%Most goods and services
VAT Registration Threshold£90,000Rolling 12 months turnover
Corporation Tax (Main Rate)25%Profits over £250,000
Corporation Tax (Small Profits)19%Profits up to £50,000
Employer's NI15%On earnings above £5,000/year
Employment Allowance£10,500Annual NI reduction for eligible businesses
Annual Investment Allowance£1,000,000100% 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.

About Our Business Calculators

Our business tools are developed with input from ACCA and CIMA qualified accountants and reflect current HMRC legislation. Tax rates are updated each April following Budget announcements. While we strive for accuracy, these calculators provide estimates only - always consult a qualified accountant for specific tax advice and refer to GOV.UK Business and HMRC for official guidance.

Last updated: February 2026 | 2025/26 tax year rates | Employer NI 15% included

Running a Business in the UK: Essential Financial Guide

The United Kingdom is home to over 5.5 million private sector businesses, with the vast majority being small and medium-sized enterprises (SMEs). Whether you operate as a sole trader, partnership, or limited company, understanding the UK business tax and regulatory landscape is essential for compliance, profitability, and growth. The 2025/26 tax year introduced significant changes that directly impact business finances, including increased Employer's National Insurance and revised Corporation Tax thresholds.

Business structures determine your tax obligations. Sole traders pay income tax and Class 2/4 National Insurance on their profits through Self Assessment. This is the simplest structure, suitable for freelancers and small businesses, though it means unlimited personal liability. Limited companies are separate legal entities that pay Corporation Tax on profits -- 19% for profits up to £50,000 (small profits rate) and 25% for profits over £250,000 (main rate), with marginal relief applying between these thresholds. Company directors typically take a combination of salary and dividends to optimise their tax position, a strategy our dividend and salary calculators can help you model.

VAT registration is mandatory once your taxable turnover exceeds £90,000 in any rolling 12-month period (or if you expect to exceed it within 30 days). Once registered, you charge VAT on sales and reclaim VAT on business purchases, submitting quarterly returns to HMRC through Making Tax Digital (MTD) compatible software. The Flat Rate Scheme simplifies VAT for smaller businesses by applying a fixed percentage (based on your industry sector) to your gross turnover, eliminating the need to track VAT on every purchase. Voluntary registration below the threshold can benefit businesses with VAT-registered customers, as it allows reclaiming input VAT and presents a more professional image.

Employment costs are a major consideration for businesses hiring staff. The April 2025 increase in Employer's NI to 15% (from 13.8%) and the reduction of the Secondary Threshold to £5,000 (from £9,100) significantly raised the cost of employing people. For each employee earning £30,000, employer NI costs approximately £3,750 per year. The Employment Allowance of £10,500 provides partial relief for eligible businesses. Auto-enrolment pension obligations add a minimum 3% employer contribution on qualifying earnings between £6,240 and £50,270. When budgeting for new hires, the true cost of an employee is typically 15-20% above their gross salary once you factor in employer NI, pension contributions, holiday pay, and other statutory costs.

Capital allowances enable businesses to deduct the cost of qualifying assets from their profits before tax. The Annual Investment Allowance (AIA) of £1,000,000 provides 100% first-year relief on qualifying plant and machinery. Full expensing (introduced in April 2023 and made permanent) allows companies to claim 100% relief on qualifying main rate plant and machinery without any cap. These generous allowances mean that most UK business investment in equipment, vehicles, and technology can be fully deducted in the year of purchase, significantly reducing your taxable profits and Corporation Tax or income tax liability.

How to Use Our Business Calculators

Our business calculators help you make informed financial decisions, from pricing and payroll to tax planning and investment analysis. Here is how to get the best results from each tool:

VAT Calculator: Use this tool for everyday invoicing and expense checking. Enter an amount and choose to add or remove VAT at the standard 20%, reduced 5%, or zero rate. For reverse VAT calculations (working out the pre-VAT price from a gross amount), select "Remove VAT" -- particularly useful when checking supplier invoices or claiming back input VAT. If you are on the Flat Rate Scheme, note that you should use your sector percentage rather than 20% when estimating your liability.

Corporation Tax Calculator: Enter your company's estimated annual profits to see the Corporation Tax liability including marginal relief. Profits up to £50,000 attract the 19% small profits rate, while profits over £250,000 pay the full 25% rate. The marginal relief zone between these thresholds effectively charges 26.5%, which our calculator breaks down clearly. If your company has associated companies (other companies controlled by the same people), divide the thresholds by the number of associated companies -- two associated companies each have a £25,000 small profits limit and £125,000 main rate trigger.

Employer NI Calculator: Enter each employee's annual salary to see the employer NI cost at 15% above the £5,000 threshold. This tool is essential for budgeting recruitment costs, modelling salary increases, and understanding the true cost of your workforce. Factor in the £10,500 Employment Allowance if your business qualifies (previous year's NI bill under £100,000 and not a single-director company without other employees).

Self-Employment Tax Calculator: If you are a sole trader, enter your annual net profit (income minus allowable expenses) to see your combined income tax and Class 2/4 NI liability. The calculator applies the correct thresholds and rates, showing your total Self Assessment bill and suggested payments on account. Use this tool to set aside the right amount for your January and July tax payments, avoiding unexpected bills.

Business Calculator FAQs

Should I operate as a sole trader or limited company?
The answer depends on your profits, risk profile, and growth plans. Sole trading is simpler with lower admin costs, but you pay income tax and NI on all profits and have unlimited personal liability. A limited company pays Corporation Tax at 19-25% and allows you to extract profits as dividends (taxed at lower rates than income), potentially saving significant tax once profits exceed approximately £30,000-£40,000 per year. However, limited companies have higher compliance costs (annual accounts, corporation tax returns, Companies House filings) and the 2025/26 employer NI increase makes the salary component more expensive. As a general rule, the tax advantage of incorporating becomes meaningful when annual profits consistently exceed £40,000. Our self-employment and dividend tax calculators let you model both scenarios to find the optimal structure for your specific situation.
What is Making Tax Digital and does it affect my business?
Making Tax Digital (MTD) is HMRC's programme to digitise the UK tax system. MTD for VAT has been mandatory since April 2022 for all VAT-registered businesses, requiring digital record-keeping and submissions through compatible software. MTD for Income Tax Self Assessment (MTD for ITSA) is being phased in: from April 2026 for self-employed individuals and landlords with income over £50,000, and from April 2027 for those with income over £30,000. Under MTD for ITSA, quarterly digital submissions will replace the annual Self Assessment return. Businesses should ensure their accounting software is MTD-compatible, maintain digital records of income and expenses, and prepare for the transition well in advance. Our calculators help you estimate the figures you will need to report each quarter.
How do I claim the Employment Allowance for 2025/26?
The Employment Allowance reduces your employer NI bill by up to £10,500 per year. To qualify, your employer NI bill in the previous tax year must have been under £100,000, and you cannot be a company with only one employee who is also a director. Claim the allowance through your payroll software or HMRC's Basic PAYE Tools at the start of the tax year. The allowance is applied against your employer NI liability each pay period until the full £10,500 is used up. For a small business with five employees earning £25,000 each, the total employer NI would be approximately £15,000, so the Employment Allowance would reduce this to about £4,500 -- a substantial saving. You must claim each tax year; it does not carry forward automatically.
What is the most tax-efficient salary and dividend mix for company directors?
The optimal salary and dividend strategy for company directors depends on individual circumstances, but a common approach for 2025/26 is to take a salary at the NI Primary Threshold of £12,570 (preserving state pension qualifying years while paying no employee NI) and extract remaining profits as dividends. The first £500 of dividends is tax-free (Dividend Allowance), with the remainder taxed at 8.75% for basic rate taxpayers, 33.75% for higher rate, or 39.35% for additional rate. However, the increased employer NI at 15% means that even this modest salary costs the company £1,135 in employer NI (from £5,000 to £12,570). Some directors now consider a salary of just £5,000 (the Secondary Threshold) to avoid employer NI entirely, though this may affect state pension entitlement. Use our salary and dividend calculators to model different scenarios for your specific profit level.
What business rates reliefs are available for small businesses?
Small Business Rate Relief (SBRR) provides significant savings for businesses occupying a single commercial property. Properties with a rateable value of £12,000 or less receive 100% relief (paying no business rates at all). For rateable values between £12,001 and £15,000, relief tapers on a sliding scale. To qualify, the property must be your only or main business premises. If you occupy additional properties, they must have a combined rateable value under £2,900. Rural Rate Relief provides 100% mandatory relief for sole post offices, general stores, and food shops in designated rural settlements with a rateable value under £8,500. Charitable organisations receive 80% mandatory relief. Some local authorities offer additional discretionary reliefs. Contact your local council to apply -- SBRR is not applied automatically and many eligible businesses miss out on significant savings.

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