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Corporation tax, dividend tax and director's loans all changed for 2026/27 — and if your company's profits sit between £50,000 and £250,000, you're paying an effective rate of 26.5% whether you realise it or not. This complete guide covers corporation tax rates and marginal relief, the best way to pay yourself as a director, allowable expenses, benefits in kind, company cars, pensions, capital allowances, R&D relief, VAT, IR35, closing a company and every key 2026/27 deadline. Whether you're weighing up salary versus dividends or simply want to know what's changed since last year, this is your one-stop reference. Read the full guide, then get in touch with Cannon Accountants if you'd like your own figures checked against it.
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The routine services you would expect us to provide are listed below but it’s the important ongoing professional advice that really helps our clients.
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The government announced that two existing R&D schemes will be combined, with the purpose of simplifying the incentive and preventing it from abuse. The new merged scheme will cover both, - the existing incentive for small and medium-sized enterprises (SMEs) and the research and development expenditure credit (RDEC) for larger businesses. Accountants will keep playing a crucial role in making sure their clients are informed of the changes and helping them to prepare.
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HMRC is focusing on undeclared dividends via reaching out to company owners, asking to declare dividend income. Company owners now have to either disclose any previously undeclared dividends or inform HMRC if nothing to be declared.
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The revamp of R&D relief will commence from April 2024, combining the two systems and lowering the intensity threshold from 40% to 30% for SMEs with a soft landing. The Chancellor has decided to eliminate Class 2 National Insurance contributions for self-employed individuals and reduce the rate of Class 4 NICs. The Chancellor has announced that full expensing, a tax break for investments in IT equipment, plant, and machinery, will now be a permanent fixture, eliminating the previous uncertainty caused by its three-year limit. Another announcement was in relation to a 2% reduction in the employee National Insurance rate, bringing it down to 10% starting in January. This change will decrease the total tax for basic rate taxpayers to 30%. In addition a £4.3bn support package for small businesses over the next five years has been announced. This includes freezing the small business multiplier at 49.9p for the fourth consecutive year, while the standard multiplier will be increased to 54.6p by September. The small rate multiplier will also be adjusted to match the Consumer Price Index (CPI) inflation.
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So what is the main difference between tax avoidance and tax evasion? Let’s put it simple – Tax avoidance is legal and tax evasion is not.A lot of people already do tax avoidance by having an Individual Savings Account (ISA), or paying some earnings into their Pension pots (like SIPP), which is a legal way to reduce you income tax. Businesses and sole traders can decrease their tax bill by claiming business related expenses, which is perfectly legal and the right way to do business.
We are experienced certified accountants in Kent that are committed to helping small businesses achieve growth.
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