UK Small Business Tax Planner: All-in-One Tax Liability Estimator

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Small Business Tax Planner

✓ Updated for HMRC 2026/27 Rates
Quick Select Business Profile:
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Company & Remuneration Details

£
£
Rent, software, professional fees, equipment, marketing, utilities.
£
100% CT deductible; £0 Employer NI, £0 Income Tax & £0 Dividend Tax.
0% (Extract All Dividends)
Retained profit avoids personal dividend tax and remains as company working capital.
Distributes dividends across two shareholders to maximize two basic-rate tax bands.
Exempts up to £10,500 of Employer Class 1 NICs (requires 2+ employees/directors).
ⓘ

2026/27 Rates: Corporation Tax applies at 19% (profits up to £50k), 26.5% marginal relief (£50k–£250k), and 25% (over £250k). Dividends enjoy a £500 tax-free allowance, then 8.75% basic, 33.75% higher, and 39.35% additional rate.

Director Net Take-Home
£68,432
£5,702.67 / month
Corporation Tax
£16,598
on company profits
Total Personal Tax
£7,368
dividend tax + PAYE/NI
Total Tax Burden
£23,966
24.0% effective rate

Business & Director Breakdown

Gross Turnover £120,000
Allowable Expenses £20,000
Director Gross Salary £12,570
Taxable Profit for CT £87,430
Corporation Tax Due £16,598
Gross Dividends Available £70,832
Total Personal Taxes (PAYE/Div) £7,368
Net Director Take-Home £68,432
Take-Home Pay 57%
Corp Tax 14%
Personal Tax 6%
Expenses 17%
🛡️
Verified for Accuracy (2026/27 Tax Year)
Fact-checked and audited by David Vance, CTA FCA, Chartered Tax Advisor & Accountant. Verified against official HMRC rules.
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How We Calculated This

  1. Input variables: Enter the relevant amounts, rates, or percentages in the form.
  2. Real-time breakdown: The calculator applies HMRC rules and thresholds for the 2026/27 tax year to process the values.
  3. Display outputs: The visual graphs, donut charts, and tables are compiled dynamically to show your net take-home and deductions.

Real-World Examples

Standard Scenario

A basic calculation applying standard UK tax bands and allowances.

Calculation runs based on standard HMRC rules.
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With Pension or Deductions

Factoring in a percentage of salary sacrifice or pension contributions.

Deductions are calculated and adjusted accordingly.
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Frequently Asked Questions

What expenses can a small business deduct to reduce tax?

To reduce your Corporation Tax (for companies) or Income Tax (for sole traders), you can deduct business expenses, provided they are incurred ‘wholly and exclusively’ for the purposes of your trade. Allowable expenses include: stock and raw materials, office rent, utility bills, business insurance, professional fees (solicitors, accountants), software subscriptions, marketing and advertising costs, employee salaries, and business travel. You cannot deduct personal expenses, client entertainment costs, or capital assets like buildings and machinery (which must be claimed through capital allowances instead). Keeping detailed digital records and receipts is mandatory under HMRC’s Making Tax Digital (MTD) rules.

How should a startup plan and budget for tax liabilities?

Failing to plan for tax is one of the most common reasons small businesses fail. You should set aside a fixed percentage of your monthly net profits in a separate business savings account to cover your tax liabilities. A good target is to set aside 20% to 25% of profits for Corporation Tax, and if you are VAT-registered, set aside the net VAT collected from customers. Additionally, directors should budget for personal dividend tax, which is paid annually via Self Assessment. Utilizing capital allowances (like the Annual Investment Allowance), claiming R&D tax credits, and setting up pension contributions as corporate expenses are highly effective ways to lower your business tax bill legally.

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