Limited Company Tax Calculator 2026/27
A limited company on £100,000 revenue typically pays 19 to 25% corporation tax, then 10.75 to 35.75% dividend tax on drawings. A £5,000 director salary avoids NI. For 2026/27, dividend rates rise 2 points, leaving less than in 2025/26 on the same dividend. Enter revenue below.
Figures verified against HMRC Corporation Tax rates on .
Written by James HartleyCIMA
Calculator
Total invoiced/billable revenue for the year before any deductions.
£5,000 is optimal for most sole directors (no NI, maintains State Pension, within personal allowance).
Equipment, travel, home office, subscriptions, professional fees, etc.
Tax-deductible from corporation tax and fully tax-free to you personally.
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How Limited Company Tax Calculator 2026/27 Works
We model the complete flow from company revenue to personal take-home: deduct salary, employer NI, expenses and pension from revenue to arrive at taxable profit → apply corporation tax → distribute remaining profit as dividends → apply personal income tax and dividend tax.
Why limited company taxation is efficient
The combination of low corporation tax (19% on first £50k), no NI on dividends, and the £500 dividend allowance means the effective combined rate is typically lower than equivalent employment income at most income levels. At £100,000 revenue the overall effective tax rate is typically 25 to 35%, versus 35 to 45% as an employee.
Corporation tax and marginal relief
From April 2023, profits below £50,000 pay 19% (small profits rate). Profits above £250,000 pay 25% (main rate). Between £50,000 and £250,000, marginal relief applies - the effective rate tapers smoothly from 19% to 25%. The calculator applies the exact HMRC marginal relief formula.
Optimal salary strategy
Most single-director companies set salary at the Secondary Threshold (£5,000 in 2026/27) to avoid employer and employee NI while still qualifying for State Pension. Directors with employees who can claim the Employment Allowance may benefit from setting salary at £12,570 (full personal allowance), as the £10,500 Employment Allowance absorbs the employer NI cost.
Frequently Asked Questions
The effective all-in tax rate for a limited company director depends heavily on income level. A director earning £80,000 in revenue (after expenses) typically pays a combined 25-30% across corporation tax, dividend tax, and any personal tax on salary. By contrast, the same income as an employee would attract 32-42% in income tax and NI.
If your company qualifies for Employment Allowance (i.e., you have employees other than yourself), it's usually more efficient to pay yourself a salary up to £12,570, taking advantage of the full personal allowance tax-free. Without Employment Allowance, any salary above £5,000 triggers 15% employer NI, which the company must pay.
Allowable expenses include: home office costs (either actual costs or HMRC flat rate), equipment and technology, professional subscriptions and training, business travel and mileage (45p/mile for cars), professional services (accountancy, legal), marketing, and phone/internet if used for business. Personal expenses and client entertainment are generally not deductible.
Retained profit defers tax. It is taxed at 19-25% corporation tax now, but only taxed personally when extracted as dividends. This is useful if you expect to be in a lower tax bracket in future (e.g., after retirement), or if you want to reinvest in the business. However, retained profits held as cash rather than invested may attract future challenges from HMRC.
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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.