Tax Planning for UK Businesses 2026/27 | LOYALS Accountants London
Tax Year 2026–2027

Stop Overpaying Tax.
Start Planning Ahead.

With dividend rates rising, BADR at 18%, and Making Tax Digital expanding — 2026/27 is the year proactive tax planning pays for itself many times over. LOYALS gives London businesses the strategies that actually work.

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Who We Help

Your situation is unique. Your tax plan should be too.

Whether you run a construction business under CIS, a limited company paying dividends, or you're planning a business exit — the strategies differ significantly. Generic advice costs you money.

CIS Contractors & Subcontractors

Thousands of CIS workers overpay tax every year through incorrect structure, missed expenses, and unclaimed rebates. The 20% or 30% deduction is rarely your actual tax liability — we help you reclaim every pound you're owed.

↑ Average rebate: £2,400/year

Limited Company Directors

With dividend tax now at 10.75% for basic rate payers and 35.75% at higher rate, getting your salary/dividend split right for 2026/27 is critical. Add pension planning and you can significantly reduce your personal tax burden.

↑ Typical saving: £3,500–£12,000/year

Business Owners Planning an Exit

BADR rose from 14% to 18% on 6 April 2026 — and it's going higher. If you're considering selling your business, restructuring, or passing it on, the timing and structure of that transaction could save or cost you hundreds of thousands.

↑ Potential saving: £10k–£80k+
Tax Planning Areas

Strategies that move the needle

Effective tax planning isn't about one trick. It's about looking across your whole financial picture — income, structure, timing, and reliefs — and aligning everything intelligently.

Corporation Tax Planning for UK Businesses

With the main rate at 25% for profits over £250,000 and the marginal relief band creating an effective 26.5% rate, most limited companies have genuine planning opportunities that remain untapped.

  • Maximising Annual Investment Allowance (£1m)
  • Timing capital expenditure to shift profits between years
  • R&D relief claims — 86% SME enhanced deduction
  • Pension contributions to extract profits tax-efficiently
  • Group structure and associated company considerations
  • Structures & Buildings Allowance at 3% p.a.

Example: £180k profit — with & without planning

Standard tax (marginal band)£43,200
AIA claim on new equipment−£7,500
Pension contributions−£6,000
R&D relief identified−£4,200
Tax with planning£25,500

Income Tax & Dividend Optimisation

Dividend rates increased by 2% from April 2026. For a director taking £60,000 in dividends, that's an extra £500+ per year in tax — without any change to your income. Now is the time to review your remuneration strategy.

  • Optimal salary/dividend split for 2026/27
  • Using personal and partner allowances fully
  • Pension contributions to recover personal allowance (£100k trap)
  • Timing dividend payments around the tax year
  • ISA allowances — £20,000 before April 2027 changes
  • Marriage Allowance transfer where applicable

Dividend tax 2026/27 vs 2025/26

Basic rate (was 8.75%)10.75%
Higher rate (was 33.75%)35.75%
Additional rate (unchanged)39.35%
Dividend Allowance£500
Extra tax on £50k dividends (HR)+£1,000

Capital Gains Tax Planning

BADR increased to 18% from April 2026 and is set to rise further. For anyone with unrealised gains in a business or investment, the window for efficient disposal is narrowing. Strategic timing can save tens of thousands.

  • BADR structuring before further rate increases
  • Spousal transfers to use both annual exemptions (£3,000 each)
  • EIS/SEIS deferral and reinvestment relief
  • Hold-over relief on gifts of business assets
  • Investors' Relief on qualifying shares (18% rate)
  • Timing disposals to optimise rate band usage

CGT rates 2026/27

Annual exemption£3,000
Basic rate (non-residential)18%
Higher rate (non-residential)24%
BADR (was 14%)18% ↑
Residential property18% / 24%

Inheritance Tax & Business Succession

Business Property Relief at 100% is now capped at £1m per person from April 2026. For business owners and farmers with significant assets, IHT planning is no longer optional — it's urgent.

  • Structuring assets to maximise NRB & RNRB
  • BPR/APR planning before and above the £1m cap
  • Gifting strategies with seven-year rule planning
  • Trust structures for multi-generational planning
  • Pension assets — IHT changes from April 2027
  • Life insurance in trust to cover anticipated liability

IHT key figures 2026/27

Nil rate band£325,000
Residence NRB£175,000
Couple total NRB£1,000,000
IHT rate on death40%
BPR 100% cap (new)£1m ↓

Property Tax Planning

From Section 24 mortgage interest restrictions to incorporation strategies, property taxation has become one of the most complex areas of UK tax. Getting it right — or wrong — can mean thousands of pounds difference each year.

  • Section 24 workarounds and incorporation analysis
  • CGT timing on property disposals
  • SDLT mitigation on property acquisitions
  • Main Residence Relief and letting relief
  • Furnished holiday let transition strategies
  • Stamp duty land tax — first-time buyer and reliefs

SDLT 2026/27 (residential)

Up to £125,0000%
£125k – £250k2%
£250k – £925k5%
£925k – £1.5m10%
Additional property+3%

Tax Saving Estimator

Answer three questions — see your potential saving in seconds

£4,200
Estimated annual tax saving with proactive planning

Based on your profile, LOYALS typically identifies significant savings through dividend optimisation, pension planning, and expense review. This is an illustrative estimate — your actual saving depends on full review.

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Free Resource

UK Tax Rates Card 2026/27 — Download Free

Every rate, threshold, and deadline for the 2026/27 tax year in one beautifully designed, pocket-sized reference card. Built by LOYALS for UK business owners, contractors, and directors.

  • Income Tax, NIC, Corporation Tax & CGT rates
  • CIS deduction rates and key deadlines
  • SDLT, vehicle benefits, ISA & pension limits
  • Verified 2026/27 figures — not last year's card
  • Clickable tax planning button direct to LOYALS
Download Free PDF (315KB)
FREE DOWNLOAD
Tax
Rates
2026 – 2027
Personal Allowance£12,570
Corp Tax (main rate)25%
CGT — BADR18%
Dividend (basic)10.75%
CIS (registered)20%
ISA annual limit£20,000
L
LOYALS
Accountants & Business Consultants
What Changed in 2026/27

The rate changes that demand your attention

Six significant changes took effect from 6 April 2026. Here's what they mean for you and what you can do about each one.

Basic rate dividends now taxed at 10.75% (was 8.75%), higher rate at 35.75% (was 33.75%). For a director drawing £50,000 in dividends at the higher rate, that's an extra £1,000 per year. Action: review your salary/dividend split, maximise pension contributions, and consider accelerating any planned dividends before further rises.
Business Asset Disposal Relief applies to qualifying business sales up to a £1m lifetime limit. The rate rose from 14% to 18% from 6 April 2026. On a £500,000 qualifying gain, that's an extra £20,000 in tax compared to the 2024 Autumn Budget rate. Action: if a business exit is within your medium-term plans, structure it correctly now to lock in available reliefs.
Previously, Business Property Relief could shelter 100% of qualifying business assets with no limit. From April 2026, the 100% rate is capped at £1m per person. Assets above this receive only 50% relief. For business owners or farmers with significant assets, this could create an IHT liability of hundreds of thousands where none existed before. Action: review your estate, consider lifetime gifts, and plan succession structures.
From April 2026, self-employed individuals and landlords with income above £50,000 must use MTD-compatible software and submit quarterly updates to HMRC. This is not optional. In April 2027, the threshold drops to £30,000. Action: ensure your bookkeeping software is MTD-compatible, quarterly submissions are set up, and you understand the new penalty regime for late submissions.
The full new State Pension increased by 4.8% to £241.30 per week (£12,548 annually) from April 2026. This now sits just £22 below the frozen personal allowance of £12,570. Those with any other income — private pension, rental, savings interest — will likely be paying income tax. Action: consider the timing of private pension drawdown, ensure any savings income is within an ISA, and review your overall retirement income strategy.
The overall ISA limit remains at £20,000 for 2026/27 — this is potentially the last full year at this level before the cash ISA limit drops to £12,000 for under-65s in April 2027. Action: maximise your ISA contribution this tax year, particularly if you have savings outside an ISA earning taxable interest. The window to shelter £20,000 in a cash ISA closes in April 2027.
Discuss These Changes With LOYALS →
Common Questions

Everything you need to know

Tax planning is the entirely legal process of organising your financial affairs to minimise your tax liability within HMRC's rules. It's fundamentally different from tax evasion (illegal) and even tax avoidance (aggressive schemes HMRC actively challenges). Proper tax planning uses legitimate allowances, reliefs, timing strategies, and efficient structures — all within the letter and spirit of the law.
Savings vary significantly by structure and income, but many LOYALS clients save between £2,000 and £30,000+ annually through proactive planning. A limited company director with £150,000 in combined salary and dividends who reviews their structure, maximises pension contributions, and times business decisions correctly might realistically save £6,000–£15,000 per year. The best way to find out is a no-obligation review.
The best time is at the start of the tax year (6 April), because many strategies require a full year to implement. The worst time is after the tax year ends, when most doors are already closed. That said, even a mid-year review often uncovers opportunities — and planning for the following year is always valuable. If you haven't reviewed your position for 2026/27, now is the time.
Absolutely — and many CIS workers are significantly overpaying. The 20% or 30% deduction taken by contractors is not your final tax liability; it's a payment on account. After allowable expenses, your actual tax due is often much less. We also review whether your current structure (sole trader vs limited company) is optimal, which can make a substantial difference at higher turnover levels.
We start with a thorough review of your current structure, income sources, and outgoings. We then identify every applicable allowance, relief, and strategy for your situation — not a generic list, but specifically modelled for your numbers. You'll leave with a clear action plan and a timeline of what to do and when. Most clients see the value immediately, often from the first session.
Yes — property tax is one of our most active planning areas. We cover Section 24 interest restriction strategies, incorporation analysis for portfolio landlords, CGT timing on disposals, SDLT planning for acquisitions, and furnished holiday let transition planning following recent rule changes. Whether you have one rental property or a large portfolio, we can add meaningful value.
We typically respond the same day, often within a few hours. We operate extended hours, which means urgent tax queries — like a time-sensitive disposal decision or an unexpected HMRC communication — get a fast, informed response rather than waiting days. Direct access to your advisor is a core part of how LOYALS works.
A standard accountancy service records what happened and files your returns. Tax planning is a forward-looking service that actively shapes what happens — advising on decisions before they're made, not reporting on them afterwards. Many businesses with a standard accountant are paying more tax than necessary simply because no-one is looking ahead. LOYALS combines both: accurate compliance and proactive planning as standard.
Client Feedback

What our clients say

"LOYALS reviewed my CIS situation and found I'd been overpaying for three years. They handled the rebate claims and restructured everything going forward. The savings far outweigh any fees — genuinely transformative."

James K.
CIS Subcontractor, London

"As a limited company director, I had no idea how much I was leaving on the table with my salary/dividend split. Kris identified over £8,000 in unnecessary tax within our first meeting. The response times are exceptional too."

Sarah M.
Ltd Company Director, Essex

"We were planning to sell our restaurant group and had no idea about BADR structuring. LOYALS walked us through the whole process well ahead of our exit and saved us a significant amount. Proper advisors, not just number filers."

Raj & Priya T.
Restaurant Group Owners
Start Today

Your 2026/27 tax bill
is still negotiable.

Book a free consultation with LOYALS. We'll review your current position, identify what you're overpaying, and give you a clear plan to fix it. No jargon. No obligation. Just straight answers from experienced advisors.

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