7 Tax Changes Hitting UK Ltd Company Directors on 6 April 2026

The new tax year starting 6 April 2026 brings more changes for UK limited company directors than any April since the Corporation Tax rate rose to 25% in 2023. Several of these affect how much you take home, how you file, and what penalties you face if you get it wrong.

Here is everything you need to know, with practical steps for each change.

1. Dividend tax rates are rising

The basic rate of dividend tax increases from 8.75% to 10.75%. The higher rate rises from 33.75% to 35.75%. The additional rate stays at 39.35%.

The £500 dividend allowance remains unchanged.

What this means for directors: If you take £40,000 in dividends above the allowance as a basic rate taxpayer, your annual tax bill rises by £800. Higher rate taxpayers see an even larger increase.

What to do: Review your salary and dividend strategy before 5 April. If you have retained profits available, taking dividends before 6 April locks in the lower rate. Use the AccountsOS Salary and Dividend Optimizer to model the numbers for your situation.

Read the full analysis: Dividend Tax Rising to 10.75% in April 2026

2. Corporation Tax late filing penalties are doubling

For the first time since 1998, HMRC is increasing Corporation Tax late filing penalties. The initial penalty for filing your CT600 up to 3 months late rises from £100 to £200. If you are still late after 3 months, the second penalty rises from £200 to £400.

This applies to accounting periods ending on or after 6 April 2026.

What to do: Check your filing deadline now. If your year-end is approaching, make sure your accountant or software has everything needed. AccountsOS tracks your Corporation Tax deadlines and sends reminders at 30, 14, and 7 days before.

Read more: Corporation Tax Late Filing Penalties Doubling from April 2026

3. Capital allowances: writing-down allowance drops to 14%

The main pool writing-down allowance (WDA) drops from 18% to 14% for plant and machinery. However, a new 40% permanent first-year allowance is being introduced for main-rate assets, partially offsetting the reduction.

The Annual Investment Allowance remains at £1 million, so most small companies can still write off equipment purchases in full in the year of purchase.

What to do: If you are planning a significant equipment purchase that exceeds your AIA, timing matters. The new first-year allowance may actually be more generous for larger purchases. Run the numbers for your specific situation.

Read more: Capital Allowances Changing April 2026

4. Working from home tax relief is being scrapped

The flat-rate working from home tax relief of £6 per week (£312 per year) — introduced during Covid and extended since — is being withdrawn from 6 April 2026. Employees will no longer be able to claim this through their tax code.

What this means for directors: If you are employed by your own company and work from home, you lose this personal relief. However, your company can still claim home office expenses as a business cost using either the simplified flat-rate method or the actual cost method.

What to do: Switch from claiming personal WFH relief to putting legitimate home office costs through your company. The AccountsOS expense tracker supports both HMRC home office calculation methods.

Read more: Working from Home Tax Relief Scrapped from April 2026

5. Benefits in Kind must be payrolled

From April 2026, most Benefits in Kind must be reported and taxed through payroll rather than on a P11D form at year-end. Full mandatory payrolling takes effect from April 2027, but employers are strongly encouraged to start now.

This affects company cars, private medical insurance, gym memberships, and most other benefits provided to employees and directors.

What to do: If you provide benefits to yourself or employees, register for payrolling of benefits with HMRC before 6 April. Your payroll software needs to handle the BiK values in monthly calculations.

Read more: Benefits in Kind — Mandatory Payrolling from April 2026

6. MTD for Income Tax launches for high earners

Making Tax Digital for Income Tax Self Assessment goes live on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. This replaces the annual Self Assessment return with quarterly digital reporting.

What this means for directors: Company directors are not directly caught by MTD for ITSA — Corporation Tax is separate. However, many directors also have rental income, freelance earnings, or other self-employment income. If your non-company income exceeds £50,000, you are affected.

The first quarterly submission is due 7 August 2026 for the period 6 April to 5 July 2026.

What to do: Check whether any of your income outside your company falls within scope. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, so even if you are not caught now, you may be soon.

Read more: MTD for Income Tax Starts April 2026

7. Companies House identity verification

Every company director and person with significant control must verify their identity with Companies House by November 2026 at the latest. This applies to all 6-7 million individuals linked to UK companies.

Verification is free through GOV.UK One Login, or can be done through an Authorised Corporate Service Provider. Companies House fees are also rising: digital incorporation goes from £50 to £100, and confirmation statements from £13 to £50.

What to do: Verify your identity now through GOV.UK rather than waiting for the deadline. Over 1 million people have already done so.

Read more: Companies House ID Verification — Every Director Must Act by November 2026

Key dates for your diary

What directors should do now

1. Review your salary and dividend strategy for 2026/27 using the Salary and Dividend Optimizer
2. Check all your filing deadlines are tracked — AccountsOS syncs these automatically
3. Verify your identity with Companies House through GOV.UK One Login
4. Switch home office claims from personal relief to company expenses via the expense tracker
5. Register for payrolling of benefits if you provide BiKs to yourself or employees
6. Check your non-company income to see if MTD for ITSA affects you
7. Consider timing of large equipment purchases relative to the new capital allowances regime

AccountsOS tracks all your deadlines, calculates your optimal salary and dividend split, and alerts you to tax changes that affect your company. Get started free during Early Access.

Frequently Asked Questions

Do these changes apply to all UK limited companies?

Yes. The dividend tax increase, Corporation Tax penalty changes, and capital allowances changes apply to all UK limited companies regardless of size. Companies House identity verification applies to all directors. Some changes like MTD for ITSA and BiK payrolling depend on your specific circumstances.

Should I take extra dividends before 6 April 2026?

If your company has retained profits and you have capacity within your basic rate band, taking dividends before 6 April locks in the lower 8.75% rate. However, this needs to be balanced against your overall tax position — bringing dividends forward could push you into the higher rate band. Use the Salary and Dividend Optimizer to check.

What is the biggest change for a typical solo director?

For most solo directors, the dividend tax increase has the largest financial impact. A director taking £50,000 in dividends above the allowance at the basic rate will pay approximately £1,000 more per year in tax. The optimal salary level also needs recalculating given the employer NI changes — see The Optimal Director's Salary for 2026/27.

Where can I find the official HMRC guidance?

HMRC publishes rates and allowances at gov.uk/government/collections/tax-rates-and-allowances. For Making Tax Digital, see gov.uk/government/publications/making-tax-digital. For Companies House changes, visit changestoukcompanylaw.campaign.gov.uk.