Limited company tax rates are really three tables: the corporation tax the company pays on its profit, the National Insurance the company pays on the salaries it pays, and the income and dividend tax the director pays personally on what they take out. Asking how much tax does a limited company pay is asking all three at once, and the answer depends on the split between salary and dividend as much as on the rates. This page sets out each table for 2026 to 2027 as gov.uk publishes it, shows how they combine on a worked example, and explains the self assessment return the director files to pay the personal part, which is the piece a first-year director most often forgets until January.
The company's rates: corporation tax and employer's NI
Corporation tax is 19 percent on profits of £50,000 or less, 25 percent on profits over £250,000, and the main rate less marginal relief between, per gov.uk, with the limits reduced for short periods and associated companies. Employer's National Insurance is 15 percent on each employee's earnings above the £5,000 secondary threshold, per gov.uk, reduced by the Employment Allowance of £10,500 where the company qualifies, which a company whose only employee is a director does not. The salary and the employer's NI are deductible in working the corporation tax.
The director's rates: income tax, employee's NI, dividend tax
Salary above the £12,570 personal allowance carries income tax at 20 percent in the basic band, 40 percent in the higher band and 45 percent in the additional band, and employee's National Insurance at 8 percent above the primary threshold to the upper earnings limit, per gov.uk. Dividends above the £500 allowance carry 10.75 percent, 35.75 percent and 39.35 percent for the same three bands from 6 April 2026, and no National Insurance. The ltd company tax rates a director actually experiences are the combination: corporation tax first on the profit, then dividend tax on what is taken.
How much tax does a limited company pay: the worked example
On the free ltd company tax calculator's example, turnover £90,000, expenses £12,000, salary £12,570 and the rest as dividend: employer's NI £1,135.50, corporation tax £13,288.03 after marginal relief on £64,294.50 of profit, dividend tax £5,429.45 on a £51,006.47 dividend, income tax on salary nil. Total tax and NI across company and director £19,852.98 on £78,000 of profit before pay, an effective rate of 25.5%, with the director keeping £58,147.02. A different split moves every line, which is what the calculator is for.
Limited company self assessment
The company's corporation tax is reported on the CT600. The director's income tax and dividend tax are reported on their own self assessment return, due by 31 January after the tax year, with payments on account where the bill is large enough. A director with dividends above the allowances has to register for self assessment and report them, per gov.uk, and the dividend vouchers are the evidence. The company deducts no tax from dividends, so the director keeps back the tax through the year; Dividvo Pro records the dividends declared per shareholder so the January figure is not a surprise.
Questions people ask about limited company tax rates
Does a limited company pay less tax than a sole trader?
Sometimes, at some profit levels, once the split is optimised, and less than it used to when corporation tax was 19 percent throughout. It is a sum rather than a rule, and it belongs to the company-formation-uk subject; this page takes the company as given.
Are the rates different in Scotland or Wales?
Corporation tax, National Insurance and dividend tax are UK-wide. Scottish income tax bands and rates apply to a Scottish director's salary, and Welsh rates to a Welsh director's, per gov.uk; the calculator uses the England and Northern Ireland bands for salary.
When do the rates change?
Corporation tax rates change from 1 April and personal rates from 6 April, usually announced in the autumn Budget. The figures on this page were read from gov.uk on the date cited, and the rate fields in the calculators are inputs so a new rate can be entered the day it is published.