What You Need to Know About the UK Business Tax In 2025

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UK business tax rates, otherwise known as non-domestic tax rates, are taxes that are paid on the occupation of non-domestic property.

The business or corporation tax is paid at the rates that applied in your company’s accounting period.

You needn’t worry if you aren’t an expert in taxes – this guide will provide you with ample information on the topic, giving you an idea of how much you can expect to pay.

Different Types of UK Business Taxes

As a business in the UK, you can expect to be met with a few different types of taxes you’ll have to pay, depending on the factors surrounding your situation. One of those factors is how your company is shaped and the amount of money it’s producing.

For example, everyone in the UK’s online gambling ecosystem, which includes online sportsbooks and casinos, needs to pay a 21% duty for remote operators. That’s actually good news for poker sites in the UK and the likes, as the main rate for this type of tax in the UK is 25%.

Another factor you should consider when finding out which business taxes you’ll have to pay is how you are going to remunerate yourself, since you are the business owner. Do you get a regular monthly salary, or do you get paid through business drawings? Based on your answers and the factors surrounding your business, there’s a good chance you won’t have to pay all the taxes we are about to mention.

Still, it’s useful to know that, as a business, you might have to face different types of taxes, such as corporate, dividends, and capital gains tax.

Here’s a closer look at the most important ones – or the ones you are most likely to have to pay.

1. Corporation tax

Corporation tax is a must in two cases: if you structure your business as a limited company, or if you are a foreign company with a UK branch. In these situations, you’ll have to pay your dues annually on any profits your business makes during the fiscal year. Mind you that this will then go beyond just business profit and will include any income your business makes from investments and selling assets.

The number one thing you want to know is how much you’ll have to pay for the corporation tax. There’s a structure based on how much profit you make, so you can expect to pay:

A 19% small profit rate if you are making less than £50,000 per financial year.
The main 25% profit rate for income over £250,000.
The main profit rate of 25% with the possibility of reduction with the help of Marginal Relief for anything between £50,000 and £250,000.

Be careful – you’ll have to be vigilant when it comes to this type of tax, as it’s not automatically reduced from your company’s profits, and it doesn’t come with a separate bill. It’s up to you and your accountant to keep records of your transactions and calculate the precise amount you ought to pay.

2. Income tax

Income tax is paid by everyone, and it’s seen in two different forms for businesses:

For employers with employees who pay income taxes on salaries that are over their personal allowance, a sum under £12,570, which is deducted from their pay.
For freelancers who mostly do online jobs, self-employed business owners, and sole traders, who have to pay taxes for anything that’s over the state-wide personal allowance limit.

Keep in mind that income tax rates for Scotland differ from the rest of the country, and you’ll have to abide by a strict deadline when paying income tax. That’s why it’s best to work with an accountant who will help you do everything by the book and avoid any penalties that are given to those who are late with their payments.

3. VAT

VAT is another major form of business tax in the UK, which is only paid by VAT-registered businesses. The term refers to ‘value added tax’, which is usually set at 20% for any goods or services that a VAT-registered business sells.

If you are wondering whether you are obligated to register as a VAT business, know that you only must do it if you make more than £90,000 in taxable turnover in a 12-month span. It’s still possible to become a VAT-registered business if you are under that limit, but it’s not mandatory.

As for whether you should or not register if you have an opportunity to choose, it’s up to you to gauge the benefits and drawbacks of making a decision in any direction. Know that VAT-registered businesses have a lot of responsibilities, and they must abide by many rules pertaining to ‘zero-rate’ items and paying HMRC their dues.

To know whether you have the option to choose, figure out how big a turnover you’ve made during a 12-month period by adding up all the goods and services, zero-rate items excluded. That will provide you with a number – if it’s lower than £90,000, the decision is in your hands.

Now that you have a clearer picture of the business taxes you have to consider in the UK in 2025, you should be able to plan your business finance plan.

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Manuela WillboldOnline Media & PR Strategist

Blogger and Educator by Passion | Contributor to many Business Blogs in the United Kingdom | Fascinated to Write Blogs in News & Education I have completed a journalism summer course at the London School of Journalism and manage various blogs.