The 2026/27 tax changes every company director should know

If you run a limited company and pay yourself through dividends, the 2026/27 tax year has already changed your numbers. Here are the four changes we're discussing most with directors.

1. Dividends cost more. With the dividend allowance at just £500, most directors will pay more on the same profit. It's worth re-checking your salary, dividend and pension mix.

2. Selling your business costs more. Business Asset Disposal Relief now taxes qualifying gains at 18%, up from 14%. Exits need earlier planning.

3. Inheritance tax relief is capped. 100% business and agricultural property relief now applies only to the first £2.5m of qualifying assets. Above that, relief is 50%. Unused allowance can pass to a spouse or civil partner.

4. Pensions join the IHT net from April 2027. Unspent pension pots will count towards your estate. If your pension was your inheritance plan, it needs a fresh look.

Frozen thresholds keep biting. The personal allowance (£12,570) and higher-rate threshold (£50,270) are frozen until April 2031, so any pay rise pulls more income into higher tax.

This article is general guidance based on the position at the date shown and is not advice for your circumstances. Speak to us before acting.