Business tax relief: what your limited company can claim in 2026/27

Most of what a limited company can claim falls into two groups, and they are not claimed by the same person. The company's own reliefs come off its corporation tax, its National Insurance, and its business rates: capital allowances on what it buys, R&D relief, the Patent Box, Marginal Relief, the Employment Allowance, and small business rate relief. The other two, on selling your shares or passing the business on, are yours rather than the company's. Several of the figures below changed in April 2026, which is why each one here carries the date it applies from.

If you suspect your company is paying more corporation tax than it needs to, you are probably right about one or two of these. Plenty of owners miss a relief because they assume it is meant for a bigger or more technical business than theirs.

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Which reliefs your company can claim, and which are yours

The list is shorter than it feels. Ten reliefs cover nearly everything a limited company and its owner can claim, and a company of any size can qualify for several of them in the same year.

Each row below gives what the relief is worth in 2026/27 and the gov.uk page that governs it, so you can check any of them for yourself:

The more you know about these, the easier it gets to spot the ones that apply to you. It is still worth talking to your accountant, so they can point out the most relevant reliefs and work with you to put a claim together. The Budget is on 28 October 2026 and it can move any of these figures, so check the date on anything you act on.

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Capital allowances: taking the cost of what you buy off your profits

Most reliefs on that list apply to a particular kind of company. Capital allowances apply to nearly all of them, because nearly every company buys something it keeps: a van, a machine, a till system, the fit-out of a unit. They let you take the cost of that purchase off the profit you pay corporation tax on, which is what makes a big piece of equipment easier to justify.

There are three routes, and your company can use more than one in the same year:

• The annual investment allowance takes the full cost of most plant and machinery off your profits, up to £1 million a year. That limit has been £1 million since 1 January 2019, and companies under common control share one allowance between them.
• Full expensing takes 100% of the cost of new and unused main-rate plant and machinery, with no cap at all, for spending from 1 April 2023. Only companies paying corporation tax can claim it, and cars never qualify.
• A 40% first-year allowance takes 40% of the cost in year one and moves the other 60% into the main pool. It covers main-rate spending from 1 January 2026, and unlike full expensing it also covers assets bought to lease out.

If you came here looking for the super deduction, it ended on 31 March 2023 and full expensing replaced it, so there is nothing left to claim under the old scheme.

Anything not covered by one of those three goes into a pool and is written down a little each year, on a reducing balance. The main pool holds most plant, machinery, equipment, vans, and lorries, and its rate fell from 18% to 14% on 1 April 2026 for corporation tax. The special rate pool holds integral features such as wiring and lifts, along with long-life assets, solar panels, thermal insulation, and cars above 50g/km, and it stays at 6% a year. If your accounting period straddles 1 April 2026, you work out a hybrid rate between the old rate and the new one rather than using either.

A reducing balance takes a long time to hand back the whole deduction, which is why it matters so much to get a purchase inside one of the three allowances rather than into a pool.

At 14% a year, £17,396 of a £50,000 asset — more than a third — is still waiting to be claimed after seven years; under the old 18% rate it would be £12,464.

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Full expensing or the annual investment allowance?

Claim the annual investment allowance first in most cases, even though full expensing is uncapped. The allowance covers second-hand assets and special rate assets, which full expensing does not, and it behaves more simply when you come to sell.

The difference shows up on disposal. Sell an asset you claimed full expensing on and your company brings the full sale proceeds back into its profits as a balancing charge, rather than taking them off a pool. Against £1 million a year, which covers most small companies' spending comfortably, there is usually no reason to reach past the allowance. Where your company does spend more than that on new plant, full expensing covers the excess, and special rate assets above the allowance get a 50% first-year allowance instead.

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Cars, buildings and integral features

A few things have rates of their own, so it is worth checking before you assume a purchase is covered:

• Cars. A car at 50g/km or less is written down at 14% a year, and above that at 6%. A new and unused zero-emission car gets a 100% first-year allowance if your company buys it before April 2027.
• Vans. A van is not a car for this purpose, so capital allowances on a van usually run through the annual investment allowance or full expensing.
• Buildings. The structures and buildings allowance gives 3% a year on a straight line over 33⅓ years, on non-residential structures.
• Mileage. Your company claims its own vehicles through capital allowances and running costs. Where you or an employee uses a private car for business, the company reimburses you at HMRC's approved mileage rates instead.

An asset bought a week either side of your year end lands in a different tax year, and which year you want it in depends on where your profits sit. Your accountant can help you plan which year to buy in before you commit to anything large.

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R&D tax relief after the two schemes merged

Qualifying R&D earns your company a 20% expenditure credit on what it spends, for accounting periods starting on or after 1 April 2024. The credit counts as trading income, so your company pays corporation tax on it and keeps the rest.

That one merged scheme replaced the separate small-company and large-company schemes, so any guidance still describing two routes is out of date. There is a second route, but it is narrower: a loss-making small or medium-sized company that spends at least 30% of its total costs on R&D can use enhanced R&D intensive support, which gov.uk puts at £27 for every £100 of R&D investment.

What catches first-time claimants is not the rate, it is the paperwork in front of it. If your company has never claimed, or last claimed more than three years ago, it has to send HMRC a claim notification form, and that window closes six months after the end of the period of account. Miss it and the claim is invalid, however good the project was. What counts as qualifying work is the other place claims come unstuck, so it is worth reading what qualifies and how to claim R&D tax relief before you start.

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Marginal Relief, and why a second company can cost you

Marginal Relief is the one relief here you do not have to ask for. If your company's profits fall between £50,000 and £250,000, it pays somewhere between 19% and 25%, and HMRC's calculation applies the taper automatically.

Below £50,000 your company pays the small profits rate of 19% and above £250,000 it pays the main rate of 25%, so in between, the effective rate climbs gradually from one to the other.

Two things shrink those thresholds, and this is where it can cost you. A short accounting period reduces them in proportion. So does having associated companies: both the £50,000 and the £250,000 are divided by the number of companies under common control. Set up a second company and the first one can quietly end up paying a higher effective rate than it did before.

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The Patent Box

Profits your company earns from patented inventions can be taxed at an effective 10% instead of 19% or 25%. Your company has to elect into the Patent Box, and the election is not retrospective, so the sooner it is in the better.

It works alongside R&D relief rather than instead of it. R&D relief cuts the cost of developing something; the Patent Box cuts the tax on what that something then earns. A company claiming one is often eligible for the other, and plenty claim neither.

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Losses, and the reliefs that are easy to forget

A loss is not wasted. Your company can set a trading loss against profits from the same period, carry it back against the previous year, or carry it forward indefinitely against future profits.

Two more are worth a look if your own figures have moved around:

• Overpaid corporation tax. If your company paid more than it owed, it can claim overpayment relief, and the time limit is four years from the end of the accounting period it relates to.
• Creative industries. Film, television, and video games production companies have expenditure credits of their own, with their own rules about what counts as core spend.

One distinction trips people up, and it is worth getting straight before you go to your accountant. A statutory relief is not the same thing as an everyday running cost. Rent, salaries, software, and the rest come off your profit as allowable expenses, and so does loan interest, while the VAT on most business purchases is reclaimed if your company is VAT registered. Not everything is fully deductible, though: client entertaining is not deductible at all, a car goes through capital allowances rather than straight off your profits, and anything with a private element only counts in its business proportion.

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The Employment Allowance on your National Insurance bill

If you last looked at the Employment Allowance a year or two ago, two things have changed and both are in your favour. It is now £10,500 rather than the £5,000 it was until April 2025, and the old bar on employers whose Class 1 bill was above £100,000 in the previous tax year has gone, so last year's bill no longer affects eligibility.

It is not a payment. It reduces your employer National Insurance bill each month until the £10,500 is used up, and you have to claim it every tax year, because it is not applied automatically.

One restriction still bites. A company with a single director cannot claim if that director is the only person on the payroll earning above the secondary threshold. And if your company has been eligible and never claimed, you can go back the previous four tax years, as far as 2021/22, though a claim for 2024/25 or earlier still has to get past that old £100,000 limit.

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Business rates relief comes from your council, not HMRC

Business rates are the one tax on this page HMRC has nothing to do with. Your local council bills you and your local council relieves you, and what you get depends on your property's rateable value. These bands apply in England only, because Scotland, Wales, and Northern Ireland run their own schemes.

In England, the bands for 2026/27 are:

Retail, hospitality, and leisure properties get lower multipliers of their own from 1 April 2026: 38.2p for small businesses and 43p standard, below a £500,000 rateable value. They replaced the 40% relief that ran in 2025/26 only, and unlike that relief they are permanent and have no cash cap. The same multipliers cover business rates on a shop, and a pub, café, or gym.

One more to check. If the revaluation on 1 April 2026 pushed your bill up and you lost small business or rural relief because of it, supporting small business relief limits how fast the increase lands.

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Selling up or passing it on: the reliefs that are yours, not the company's

Two of the biggest reliefs are not your company's at all. They are yours, and they only matter when you sell your shares or hand the business on. Both ask for two years of ownership before they apply, so they reward a decision taken years ahead of the event rather than at the point of sale.

Business Asset Disposal Relief cuts the capital gains tax on qualifying gains to 18% for disposals from 6 April 2026, up to a lifetime limit of £1 million. If you have seen a lower figure, it was right at the time: the rate was 14% for disposals between 6 April 2025 and 5 April 2026, and 10% before that. To qualify you need two years as an employee or office holder of a trading company, holding at least 5% of both the shares and the voting rights.

Business Property Relief cuts the inheritance tax on business property in your estate. For deaths on or after 6 April 2026, 100% relief is capped at £2.5 million of combined business and agricultural property, with 50% relief above that. Any unused allowance can pass to a surviving spouse or civil partner, which takes the combined figure to as much as £5 million. The business has to be trading rather than mainly investing, and you generally need to have owned it, or the asset, for at least two years.

The sums here are large and they run into your own tax position as well as the company's, so this is a conversation for an accountant and, for Business Property Relief, for whoever handles your will.

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When the relief actually reaches your company

A relief cuts a bill you pay later. It does not cut the cost you pay now, and the gap between the two is longer than most people expect, because corporation tax falls due nine months and one day after your accounting period ends.

Take a £40,000 machine bought in April 2026 by a company with a 31 March year end. Full expensing takes the whole £40,000 off the profits of the year to 31 March 2027, and the corporation tax for that year is due on 1 January 2028. The money left the account about 21 months earlier.

That gap is the one thing a relief cannot help with, because it does not pay for the machine. If the purchase is right but the timing is not, an iwoca Flexi-Loan is a business loan with flexible repayment options, and because repaying early carries no fee, you can clear it when the cash arrives rather than run it to a term. It costs interest, so it earns its place where the asset starts earning before the relief lands, and not where a purchase is being pulled forward for the deduction alone.

Flexi-Loan in action: The Building Co.

When The Building Co. landed a new project during a quieter period, founder Ray Iqbal needed to buy specialist equipment quickly. iwoca approved and funded Ray within 48 hours, helping him take on the opportunity without putting pressure on cash flow. Read Ray's story.

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If you have been missing one, how far back can you go?

Further than most people assume, though not on everything. Your company can usually amend a Company Tax Return within 12 months of its filing deadline, and that deadline is itself 12 months after the accounting period ends, so a relief you missed last year is often still claimable.

Once that window closes, the route depends on what went wrong. Overpaid corporation tax can be reclaimed for four years from the end of the accounting period, and the Employment Allowance goes back four tax years on a timetable of its own. R&D is the exception, and it is better to know now than later: the claim notification form has to reach HMRC within six months of the end of the period of account, and if it did not, the claim is invalid even inside the amendment window.

So if something on this page looks like a relief you have been missing, what to take to your accountant is short: which reliefs you think apply, the accounting periods you want them to look at, and what the company bought or spent in each one. They can tell you quickly whether a claim is still open.

Check your figures with an accountant. This is general information about the reliefs a limited company can claim, not tax advice. Rates and thresholds change at Budgets, and the Budget on 28 October 2026 could change several of the figures on this page.