Tax changes affecting UK limited companies and directors across the 2025/26 and 2026/27 tax years. Sourced from HMRC, HM Treasury, Companies House and the Spring/Autumn Budgets. Confirmed changes shown alongside what to do about each.
Confirmed — upcoming6 April 2026
income tax
Dividend tax rates rising 2 percentage points
Basic rate rises from 8.75% to 10.75%, higher rate from 33.75% to 35.75%. Additional rate unchanged at 39.35%.
What changed and what to do
What changed
The basic and higher rates of dividend tax both increase by 2 percentage points from 6 April 2026. The £500 dividend allowance is unchanged. A director taking £40,000 of dividends above the allowance as a basic rate taxpayer will pay £800 more tax per year.
Who it affects
All limited company directors who take dividends
Anyone holding shares outside an ISA
Family members on lower-band salary + dividend splits
What to do
Review your salary/dividend split before 5 April 2026. If you have retained profits available, taking dividends before 6 April locks in the lower rate. Then re-model the new optimal mix for 2026/27.
First-time late filing penalty rises from £100 to £200. Second penalty (3+ months late) rises from £200 to £400.
What changed and what to do
What changed
For the first time since 1998, HMRC is increasing Corporation Tax late filing penalties. Applies to accounting periods ending on or after 6 April 2026. Penalties stack: a CT600 filed 6+ months late attracts £400 plus 10% of the unpaid tax, then an additional 10% after 12 months.
Who it affects
All limited companies
Especially small companies who file in-house and risk missing the deadline
What to do
Check your CT600 filing deadline now — it's 12 months after your accounting period end. Set reminders at 30, 14 and 7 days. AccountsOS tracks Corporation Tax deadlines automatically.
The main pool WDA rate drops from 18% to 14% for spending above the Annual Investment Allowance.
What changed and what to do
What changed
The writing-down allowance on the main pool falls from 18% to 14% from 1 April 2026. AIA remains at £1m, so most SMEs are unaffected for routine plant and machinery, but companies with larger capital programmes will see slower tax relief.
Who it affects
Companies spending above £1m/year on capital assets
Property businesses with large fit-out programmes
Anyone planning a major equipment purchase
What to do
Bring forward planned capex into the 2025/26 year if you'll exceed the £1m AIA. Full expensing on qualifying plant and machinery is still available.
The flat £6/week (£312/year) WFH deduction is withdrawn for employees and directors not contractually required to work from home.
What changed and what to do
What changed
HMRC is removing the working-from-home tax relief introduced during COVID. Directors who claimed it on self-assessment will no longer be able to. The relief remains only for those who are contractually required to work from home (rare for company directors).
Who it affects
Directors and employees who claimed the £6/week deduction
Hybrid workers
What to do
Switch to claiming home office costs the proper way — calculate actual costs (proportion of rent/mortgage interest, utilities, broadband, council tax) or use a director's licence agreement. The actual-cost method usually gives a higher deduction.
Most benefits in kind must now be processed through payroll in real-time, not reported via P11D after year-end.
What changed and what to do
What changed
From 6 April 2026, most taxable benefits (company cars, private medical, gym memberships, etc.) must be payrolled — the tax is collected through PAYE each month rather than reported on a P11D after year-end. Beneficial loans and accommodation can still be reported via P11D for now.
Who it affects
Any company providing taxable benefits to directors or employees
Specifically: company cars, private health insurance, professional subscriptions, gym memberships
What to do
Register with HMRC to payroll benefits before the start of the 2026/27 tax year. Update your payroll software. Tell affected employees that more tax will come out of their net pay each month.
MTD for Income Tax launches for £50k+ sole traders/landlords
Sole traders and landlords with gross income above £50,000 must use MTD-compatible software and file quarterly updates from April 2026.
What changed and what to do
What changed
Making Tax Digital for Income Tax Self Assessment goes live for sole traders and landlords with combined gross self-employment + property income above £50,000. Four quarterly updates per year plus a final declaration replace the annual self-assessment for affected taxpayers. The threshold drops to £30k in April 2027 and £20k in April 2028.
Who it affects
Sole traders earning £50k+ gross
Landlords with rental income £50k+ gross
Directors with significant side-income from self-employment/property
What to do
If you're personally above the threshold (separate from your company), pick MTD-compatible software now and start tracking transactions digitally. Limited company accounts are not affected by MTD ITSA — only the personal side.
Companies House identity verification becomes mandatory
All new directors, PSCs and members of LLPs must verify their identity. Existing directors phasing in through 2026.
What changed and what to do
What changed
Under the Economic Crime and Corporate Transparency Act, identity verification at Companies House is now compulsory. New incorporations require verified IDs from 18 November 2025. Existing directors and PSCs must verify during a 12-month transition window, typically alongside their next confirmation statement.
Who it affects
Anyone becoming a director, PSC, or LLP member from November 2025
All existing directors and PSCs during the 12-month transition
Anyone filing on behalf of a company (must be ACSP-verified)
What to do
Verify your identity via GOV.UK One Login or an authorised corporate service provider (ACSP). Allow 10 minutes for the digital ID check. Once verified, you get a personal code that follows you across all directorships.
Employer Class 1 NI is 15% (up from 13.8%). Secondary threshold dropped from £9,100 to £5,000.
What changed and what to do
What changed
The 2024 Autumn Budget increased employer NI from 13.8% to 15% and slashed the secondary threshold from £9,100 to £5,000. Employment Allowance increased from £5,000 to £10,500 and the £100k cap was removed. Net effect: most small companies with multiple employees benefit from the higher Employment Allowance; single-director companies (which can't claim it) pay more.
Who it affects
All limited companies running payroll
Especially solo-director companies (no Employment Allowance)
Companies with payroll between £5k–£9k per head (now paying NI on previously exempt salary)
What to do
Re-run your optimal director's salary calculation. For solo directors, the sweet spot is now £5,000 — below the secondary threshold but still earning NI credits. Multi-employee companies should still pay £12,570 (Employment Allowance covers the employer NI).