Running your own limited company is a proud milestone — but the tax side can feel like a second job. This guide explains, in plain English, every business tax a women-led limited company pays in 2026/27, with the current rates and a worked example you can follow.
Direct answer: A women-led limited company pays corporation tax on its profits — 19% up to £50,000 and 25% above £250,000, with marginal relief in between. The director then pays income tax and dividend tax on what she takes out, the company pays employer National Insurance on salaries above £5,000, and VAT only applies once turnover passes £90,000.
If you have not formed the company yet, our step-by-step guide explains how to register a limited company in the UK. Once the company exists, the taxes below are the ones to plan for.
The taxes at a glance
A limited company is a separate legal person from you. That is why tax is charged twice in a sense: once on the company’s profits, and again on the money you personally take out. Here is the full picture for 2026/27.
| Tax | Who pays it | 2026/27 rate or threshold |
|---|---|---|
| Corporation tax | The company, on its taxable profits | 19% up to £50,000; 25% above £250,000 |
| Income tax on salary | You, the director, on your salary | £12,570 personal allowance; 20% / 40% / 45% bands |
| Dividend tax | You, on dividends above £500 | 10.75% / 35.75% / 39.35% |
| Employer National Insurance | The company, on salaries above £5,000 | 15% |
| VAT | The company, only if registered | Register at £90,000 turnover; standard rate 20% |
Corporation tax: the company’s own tax
Corporation tax is charged on the company’s taxable profits — broadly, its income minus allowable business expenses, including your salary and employer National Insurance. The rates for company years starting 1 April 2026 are published in the GOV.UK corporation tax rates table and have not changed since April 2023.
| Taxable profit | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| £50,001 to £250,000 | 25% less marginal relief (effective rate rises from 19% to 25%) |
| Above £250,000 | 25% (main rate) |
Marginal relief smooths the jump between the two rates. A company with £100,000 of taxable profit pays 25% (£25,000) minus relief of 3/200 × (£250,000 − £100,000) = £2,250, so the bill is £22,750 — an effective rate of 22.75%. The £50,000 and £250,000 limits are shared between associated companies and cut down for short accounting periods, so check this if your company is part of a group.
Paying yourself: salary vs dividends
Most women directors take a mix of salary and dividends, because the two are taxed differently. A salary is a company expense, so it reduces corporation tax, but it attracts National Insurance. Dividends are paid from profit after corporation tax, carry no National Insurance, but are taxed as personal income.
For 2026/27, the personal allowance is £12,570, so a salary up to that level attracts no income tax. Above it, income tax runs at 20% up to £50,270 of total income, 40% up to £125,140, and 45% above that. Dividends sit on top of your salary when working out your band. The first £500 of dividends is covered by the dividend allowance and taxed at 0%; above that, dividend tax is 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. Note that these dividend rates rose by 2 percentage points in April 2026 — older guides quoting 8.75% and 33.75% are out of date.
On the company side, employer National Insurance is 15% on salary above the £5,000 secondary threshold, with no upper limit. One trap to know: a company with only one director who is its only employee cannot claim the £10,500 Employment Allowance to offset that bill. If you employ other staff, the allowance may apply — ask your accountant before you assume it.
Worked £ example: Amara’s design studio
Amara is the sole director and shareholder of a small design company. Her year looks like this:
- Company profit after salary and employer National Insurance: £40,000
- Corporation tax at 19%: £40,000 × 19% = £7,600, leaving £32,400 in the company
- Her salary: £12,570, covered by the personal allowance, so £0 income tax on the salary
- Employer National Insurance on that salary: (£12,570 − £5,000) × 15% = £1,135.50, paid by the company
- Her dividends: £20,000 taken from the £32,400 balance, leaving £12,400 retained in the company
- Dividend tax: (£20,000 − £500) × 10.75% = £2,096.25, because her total income of £32,570 sits inside the basic-rate band
The lesson is not the exact split — your accountant should tune salary and dividends to your own income — but the order of operations: the company is taxed first, then you are taxed on what you take out, and keeping some profit in the company is a legitimate way to smooth your personal tax from year to year.
VAT: do you need to register?
VAT is not automatic. You must register when your VAT-taxable turnover passes £90,000 in any rolling 12 months, and you must do it within 30 days of passing the threshold. You can deregister when turnover falls to £88,000 or below. The standard VAT rate is 20%, with 5% and 0% rates for specific goods and services. Voluntary registration before £90,000 can make sense if your customers are mostly VAT-registered businesses, because you can reclaim VAT on your own costs — but it adds quarterly returns to your workload, so weigh that carefully.
Deadlines diary for 2026/27
| Task | Deadline |
|---|---|
| File company accounts with Companies House | 9 months after the accounting year-end |
| Pay corporation tax | 9 months and 1 day after the accounting year-end |
| File the company tax return (CT600) | 12 months after the accounting year-end |
| File the confirmation statement (£50 fee) | Within 14 days of the review period ending |
| VAT return and payment (if registered) | 1 month and 7 days after the VAT period ends |
| PAYE payment to HMRC (if you run payroll) | 22nd of the following month (electronic payment) |
5 mistakes first-time directors make
- Treating company money as personal money. Every withdrawal should be salary, dividend or a properly recorded director’s loan — never an informal dip into the business account.
- Paying dividends when there is no profit to cover them. Dividends can only be paid from distributable profits; an unlawful dividend can be clawed back.
- Forgetting the confirmation statement. It is separate from the tax return and the accounts, costs £50, and is due every year.
- Missing the VAT threshold. Turnover is measured on a rolling 12-month basis, not just at the year-end — check it monthly once you are near £90,000.
- Using last year’s dividend rates. Dividend tax rose in April 2026 to 10.75% and 35.75% in the first two bands; budgets built on the old rates will underpay.
Keep records that make tax easy
Good records are what turn a stressful January into a calm one. Keep a separate business bank account, photograph or scan every receipt, and reconcile your books monthly rather than once a year. Limited companies must keep accounting records for six years from the end of the accounting period, and your company tax return, accounts and confirmation statement all draw on the same figures — so a single tidy set of books serves all three. Cloud accounting software that links to your bank feed can do much of this automatically, and it is worth the small monthly cost for most women-led companies.
Frequently asked questions
Do I pay tax twice as a limited company director?
Yes, in effect: the company pays corporation tax on its profits, and you pay personal tax on the salary and dividends you take out. Planning the mix is how directors keep the combined bill fair.
What is the most tax-efficient salary for a director in 2026/27?
Many accountants suggest a salary around the £12,570 personal allowance, topped up with dividends — but employer National Insurance above £5,000 and your other income change the answer, so take advice for your own figures.
Does my limited company have to register for VAT?
Only when VAT-taxable turnover passes £90,000 in a rolling 12 months, or if you choose voluntary registration earlier. Below that, registration is optional.
Can a one-director company claim the Employment Allowance?
No — if the sole director is the only employee liable for employer National Insurance, the company cannot claim the £10,500 Employment Allowance.
Conclusion
Business tax for a women-led limited company comes down to five pieces: corporation tax on profits, income tax on salary, dividend tax on dividends, employer National Insurance, and VAT if you cross the threshold. Get the order right, diarise the deadlines, and use the new 2026/27 dividend rates in your planning — and the tax side stops being scary and becomes just another part of running your company well. This guide is general information, not tax advice; a good accountant pays for themselves many times over.
