UK Business Calculators — Corporation Tax, IR35 & More

Running a UK business brings its own layer of tax on top of everything a PAYE employee deals with, and the right structure changes the answer substantially. Corporation Tax works on three bands: the 19% small profits rate applies to profits up to £50,000, the 25% main rate applies above £250,000, and marginal relief tapers the effective rate between those two thresholds. A company with exactly £50,000 profit pays £9,500 (19%); one with £300,000 profit pays the full 25%, or £75,000. Sole traders sit outside the Corporation Tax system entirely — profits are taxed as personal income, with Class 4 National Insurance (6% between £12,570 and £50,270, 2% above) alongside standard Income Tax bands. This is why the Sole Trader vs Limited Company decision matters so much: incorporating shifts you onto Corporation Tax plus Dividend Tax (10.75% basic rate, 35.75% higher rate, 39.35% additional rate, after a £500 tax-free dividend allowance) instead, which is often — but not always — more tax-efficient at higher profit levels. Contractors face a third set of rules entirely: IR35. Working outside IR35 through a limited company lets you draw a low director salary plus dividends from post-tax profits, the most tax-efficient route. Inside IR35 (the default for most public-sector and many large private-sector engagements since the 2021 off-payroll reforms), the full day rate is treated as deemed salary with PAYE and employer National Insurance deducted before it reaches you. An umbrella company sits in between, with umbrella margins and the apprenticeship levy (0.5% on payrolls above £3 million) eating into the day rate too. The gap between outside and inside IR35 on the same day rate routinely exceeds £15,000 a year. Growth-stage companies investing in product development can claim R&D Tax Relief. Since 1 April 2024 most claimants use a single merged scheme based on RDEC — a 20% above-the-line credit, taxable at Corporation Tax, giving a net benefit of roughly 15-16.2% of qualifying spend. Loss-making SMEs whose R&D spend is at least 30% of total expenditure qualify for a more generous 14.5% payable credit under the R&D-intensive scheme instead. Private equity, venture capital and hedge-fund professionals have watched the tax treatment of carried interest change year on year: taxed as a capital gain at up to 28% in 2024/25, a flat 32% from 6 April 2025, and — from 6 April 2026 — treated as trading income subject to Income Tax and Class 4 National Insurance, with a 72.5% qualifying multiplier reducing the amount actually taxed. Pair these calculators with the VAT tools if your turnover is near the £90,000 registration threshold, and with the Salary & Pay category if you're comparing employment against running your own business.