A quick note: this article is general information, not personal advice. Tax and accounting rules change and everyone's situation is different, so please don't act on anything here without checking how it applies to you. We'd be happy to help — get in touch before making any decisions.
A new tax year rarely arrives with fireworks, and 2026/27 is no exception. None of the changes is dramatic by itself. Taken together, though, they shape how much profit you actually keep, and how you ought to think about pay, investment and any eventual sale. Here are the ones worth your attention.
Business Asset Disposal Relief climbs to 18%
Sell qualifying business assets, say the shares in your trading company when you finally step away, and Business Asset Disposal Relief (BADR) cuts the rate of Capital Gains Tax on the first £1 million of lifetime gains. That preferential rate has been creeping up for a while. It went to 14% in April 2025, and from 6 April 2026 it rises again to 18%.
The lifetime limit is still £1 million. So if a sale or a restructure is anywhere on your horizon, timing and structure matter more than they used to. Get them wrong and the gap between qualifying and not qualifying can run to six figures.
Employer National Insurance sits at 15%
The hike that landed in April 2025 is still doing damage. Employer (secondary) National Insurance is charged at 15%, and the point at which it kicks in was cut hard, down to £5,000 per employee. There is some relief in the Employment Allowance at £10,500, which covers the employer NIC bill on plenty of smaller payrolls. Be aware, though, that single-director companies with no other staff generally can't claim it.
Corporation tax bands stay put
Corporation tax carries on as before:
- 19% on profits up to £50,000 (the small profits rate);
- 25% on profits over £250,000 (the main rate);
- an effective 26.5% marginal rate on the slice of profit between £50,000 and £250,000.
Those thresholds are split between associated companies, which is why group and multi-company setups need handling with care.
Frozen allowances, and the quiet squeeze that follows
The personal allowance (£12,570) and the higher-rate threshold (£50,270) are both frozen, and the additional-rate threshold stays at £125,140. As salaries and profits rise, more of your income gets dragged into the higher bands. It's a tax increase in all but name, and it's usually called fiscal drag. The dividend allowance stays at just £500, so dividends are taxed almost from the first pound.
What to do about it
The basics haven't changed: take pay in a sensible mix of salary and dividends, make the most of pension contributions and capital allowances, and plan any sale well in advance rather than at the last minute. We go through all of this with our business clients at year-end as part of their tax planning. If you'd like a second pair of eyes on your own setup, book a free consultation.