Limited Company Guide

Budget 2026 for Limited Companies: What Changes for Directors

The Budget on 28 October 2026 did not change corporation tax, dividend tax or employer National Insurance. This page lists what did change for company owners, when each change starts, and which ones still need legislation.

Written by James Whitfield · Last reviewed 29 October 2026 · Checked against 2026/27 HMRC rates · Editorial standards · Methodology

Key takeaways
  • Corporation tax is unchanged: 19% up to £50,000, 25% above £250,000, marginal relief in between, for the years starting April 2026, 2027 and 2028.1
  • Dividend tax is unchanged for 2027/28: 10.75%, 35.75% and 39.35%, with the £500 allowance.1
  • Employer NI stays 15% above £5,000, with the £10,500 Employment Allowance, in 2027/28.1
  • The main writing-down allowance falls from 14% to 12% from 1 April 2027.2 The first-year allowance from 1 January 2027 is not settled: the Budget text says 50%, one Budget table says 40%.
  • Business Asset Disposal Relief's lifetime limit halves from £1 million to £500,000 for disposals on or after 6 April 2027.12
Quick answer

Budget 2026 (28 October 2026) left the core limited company taxes alone: corporation tax at 19% to 25%, dividend tax at 10.75%, 35.75% and 39.35% with a £500 allowance, and employer NI at 15% above £5,000. So the usual £12,570 salary plus dividends still works the same way in 2027/28.

The changes are around the edges: a lower 12% main writing-down allowance from April 2027, a 35p mileage rate above 10,000 miles, and the BADR lifetime limit falling to £500,000 from 6 April 2027.

  • ·Corporation tax: 19% / 25%, thresholds £50,000 / £250,000 (unchanged)
  • ·Dividend tax 2027/28: 10.75% / 35.75% / 39.35%, £500 allowance (unchanged)
  • ·Writing-down allowance: 14% to 12% from 1 April 2027
  • ·BADR limit: £500,000 for disposals from 6 April 2027
Contents ▾
  1. 1. What stays the same
  2. 2. Capital allowances
  3. 3. Selling the company: BADR
  4. 4. Mileage and expenses

What stays the same

Corporation tax: the 19% small profits rate up to £50,000 and the 25% main rate above £250,000, with marginal relief (fraction 3/200) between them, are unchanged for the financial years starting 1 April 2026, 2027 and 2028.1

Dividends: the £500 dividend allowance and the 10.75%, 35.75% and 39.35% rates are the same in 2027/28 as now.1 The Personal Allowance stays £12,570 and the higher-rate band ends at £125,140.1

Employer National Insurance: 15% above the £5,000 secondary threshold, with the £10,500 Employment Allowance.1

VAT: registration stays at £90,000 and deregistration at £88,000.1

Capital allowances

The main rate writing-down allowance on plant and machinery falls from 14% to 12% from 1 April 2027 for corporation tax.2 Full expensing (100%) and the £1 million Annual Investment Allowance are unchanged.1

The 40% main rate first-year allowance applies to spending from 1 January 2026. For spending from 1 January 2027 the Budget text says it will rise to 50%, which needs legislation, but one Budget table still shows 40%, so treat the 2027 rate as not settled until HMRC confirms it.2

Selling the company: BADR

Business Asset Disposal Relief still taxes qualifying gains at 18%, but the lifetime limit falls from £1,000,000 to £500,000 for disposals made on or after 6 April 2027.12 A director planning a sale with gains above £500,000 may find the timing matters; take advice before acting.

Mileage and expenses

The approved mileage rate stays 55p a mile for the first 10,000 business miles, and the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.2

FAQ

Frequently asked questions

Did Budget 2026 change dividend tax?+

No. The dividend allowance stays £500 and the rates stay 10.75%, 35.75% and 39.35% in 2027/28.

Did corporation tax go up in Budget 2026?+

No. It stays 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between, for the years starting April 2026, 2027 and 2028.

What happens to Business Asset Disposal Relief in 2027?+

The rate stays 18%, but the lifetime limit falls from £1 million to £500,000 for disposals on or after 6 April 2027.

Is the optimal director salary still £12,570 in 2027/28?+

On the figures announced, yes: the Personal Allowance, NI thresholds and dividend rates are unchanged, so the usual salary and dividend split works the same way.

Sources & references

Where these figures come from

The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.

  1. Budget 2026: Annex A, rates and allowances www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances
  2. Budget 2026: Overview of tax legislation and rates (OOTLAR), 28 October 2026 www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar
Verified against published UK government guidance.
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