Business Tax Rates and Bands 2025/26
| Corporation tax | 2025/26 | 2024/25 |
| All profits and gains (excluding determination agreements and diverted profits)
Small profits rate (companies with profits under £50,000) Main rate of corporation tax (companies with profits over £250,000) |
19% 25% |
19% 25% |
| Limits for marginal relief | £50,000 - £250,000 | £50,000 - £250,000 |
| Standard fraction for marginal relief | 3/200 | 3/200 |
| S.455 tax on loans made by close companies to participators | 33.75% | 33.75% |
| Capital allowances | 2025/26 | 2024/25 |
| Main writing-down allowance (reducing balance) | 18% | 18% |
| Special rate writing-down allowance (reducing balance) | 6% | 6% |
| Structures and buildings allowance (SBA) | 3% | 3% |
| Full expensing (main rate plant and machinery)* | 100% | 100% |
| Full expensing (special rate plant and machinery)* | 50% | 50% |
| * Full expensing allows the deduction of 100%/50% of the cost of certain plant and machinery from the profits before tax. This measure is effective from 1 April 2023 to 31 March 2026. | ||
| Motor cars if CO2 > 1/km but does not exceed 50g/km | 6% | 18% |
| Motor cars if CO2 > 50g/km | 18% | 6% |
| First-year allowances (FYA) – New and unused motor cars if CO2 emissions are 0 g/km or car is electric | 100% | 100% |
| Capital allowances | 2025/26 | 2024/25 |
| Small pool write-off where written-down value (WDV) is £1,000 or less | 100% | 100% |
| FYA for electric charge points | 100% | 100% |
| Annual investment allowance (AIA) | £1,000,000 | £1,000,000 |
| AIA rate | 100% | 100% |
| VAT | 2025/26 | 2024/25 |
| Standard rate | 20% | 20% |
| Reduced rate | 5% | 5% |
| Zero rate | 0% | 0% |
| VAT | 2025/26 | 2024/25 |
| Normal scheme registration threshold | £90,000 | £90,000 |
| Deregistration threshold | £88,000 | £88,000 |
| Cash and annual accounting scheme – maximum to join | £1,350,000 | £1,350,000 |
| Cash and annual accounting scheme – exit threshold | £1,600,000 | £1,600,000 |
| Flat-rate scheme – maximum allowed to join | £150,000 | £150,000 |
| Flat-rate scheme exit threshold | £230,000 | £230,000 |
| Annual tax on enveloped dwellings (ATED) | 2025/26 | 2024/25 |
| UK residential property valued at more than £0.5m but not more than £1m | £4,450 | £4,400 |
| UK residential property valued at more than £1m but not more than £2m | £9,150 | £9,000 |
| UK residential property valued at more than £2m but not more than £5m | £31,050 | £30,550 |
| UK residential property valued at more than £5m but not more than £10m | £72,700 | £71,500 |
| UK residential property valued at more than £10m but not more than £20m | £145,950 | £143,550 |
| UK residential property valued at more than £20m | £292,350 | £287,500 |
| Economic crime (anti-money laundering) levy* | 2025/26 | 2024/25 |
| Small entity (less than £10.2m UK revenue) | n/a | n/a |
| Medium entity (UK revenue £10.2m - £36m) | £10,000 | £10,000 |
| Large entity (UK revenue £36m - £1bn) | £36,000 | £36,000 |
| Very large entity (UK revenue more than £1bn) | £500,000 | £250,000 |
| Research and development tax credit rates | 2025/26 | 2024/25 |
| R&D merged scheme | 20% | 20% |
| R&D Intensive SME deduction rate | 186% | 186% |
| R&D Intensive SME payable credit | 14.5% | 14.5% |
| R&D Intensive SME intensity ratio | 30% | 30% |
| Film/high-end TV/videogames tax credit | 25% or 34% | 25% (34%) |
| Animation and Children’s tax relief | 25% or 39% | 25% (39%) |
| Open-ended investment companies and authorised unit trusts | 20% | 20% |
| Patent box | 2025/26 | 2024/25 |
| Patent box | 10% | 10% |
ACCA LEGAL NOTICE - This is a basic guide prepared by ACCA UK's Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.
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