Corporate and Business Tax
Understanding Tax for Your Business
The taxes your business pays depend on how it is structured, what it earns and the activities it carries out. Limited companies, sole traders and partnerships have different responsibilities.
This guide explains the main areas to consider, from taxable profits and business expenses to record keeping and planning ahead.
Information checked: 16 October 2026.
Corporation Tax for Limited Companies
Limited companies generally pay Corporation Tax on taxable profits, including trading profits, investment income and chargeable gains. Taxable profit can differ from the profit shown in your accounts because tax adjustments may be required.
The main Corporation Tax rate is 25%. Eligible companies with profits of £50,000 or less may qualify for the 19% small profits rate. Marginal Relief may apply between £50,000 and £250,000.
These limits are reduced for short accounting periods and where there are associated companies. The lower rate and Marginal Relief are not available to every company.
Sole Traders and Partnerships
Sole traders generally pay Income Tax and applicable National Insurance on their business profits through Self Assessment. The amount due depends on profits and personal circumstances.
In an ordinary partnership, each partner is taxed on their share of the profits. The nominated partner manages the partnership return and business records. Corporate partners and LLPs can involve additional rules.
Expenses, Equipment and Reliefs
Qualifying business costs may reduce taxable profits, but personal spending is not automatically deductible. Mixed business and private costs need the appropriate treatment. Equipment and other capital spending can fall under different rules from everyday running costs.
The treatment depends on your business structure and accounting method. Keep invoices and records, and check which expenses, allowances and reliefs apply before claiming.
Taking Money From a Company
Company money is separate from your personal money. Salary, dividends, expense repayments and directors’ loans each have different rules. Dividends require sufficient available profits and are not deductible when calculating Corporation Tax.
VAT, Payroll and Other Obligations
Depending on your turnover, activities and workforce, you may also have VAT, PAYE and other reporting responsibilities. These sit alongside the tax on business profits. Review the requirements when your business changes.
Records, Returns and Payment Planning
Keep financial records up to date and identify the returns and payments due for your business. Filing and payment deadlines are not always the same. Current figures help you estimate liabilities and plan the cash needed.
Review Before the Year End
Discuss significant purchases, changes in ownership or business structure before committing. A useful review considers commercial needs, cash flow and tax together.
This page provides general information. The correct treatment depends on your circumstances and the rules applying to the relevant period.
Business Tax Questions?
Talk to Merranti about your business, current arrangements and upcoming decisions.
- Company and business tax reporting
- Expenses and relevant reliefs
- Owner and director tax considerations
- Planning for future liabilities
We can discuss the support needed and agree the scope and fee.
Discuss business taxKnow Your Structure
A company and its owners have separate tax positions. Review the overall picture when considering how the business should operate.
Keep Clear Records
Organised records support accurate accounts and returns. Retain evidence of income, expenses and business transactions.
Plan Ahead
Use current financial information to prepare for tax payments and raise questions while there is time to consider your options.
Official Guidance
Corporation Tax
Company tax rates
Sole trader responsibilities
Business partnerships
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Corporate and business tax information
Understand your business tax. Plan your next step.
Whether you run a company, work for yourself or operate a partnership, start with a conversation about your business. We can explain what information is needed and agree the accounting and tax support appropriate to your circumstances.
Let’s talk and see how we can help you.
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