Corporation Tax Calculator for a Landlord Limited Company (2026/27)
Profit, Corporation Tax with marginal relief, associated companies and a short accounting period, the effective rate, and salary vs dividends net-in-hand for one director.
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Two taxes, one company. A landlord limited company pays Corporation Tax on its rental profit — with mortgage interest deducted in full, unlike the Section 24 restriction on personally owned property — and then, separately, whoever draws money out of the company pays personal tax on the way it comes out. This calculator works out the Corporation Tax bill on the profit you enter, including marginal relief, associated companies and a short accounting period, and then compares taking a given amount out as salary against taking the same amount as a dividend, for one director.
How the Corporation Tax figure is worked out
Profit (rent plus any other company income, less running expenses and finance costs) is taxed at 19% up to £50,000 (the small profits rate) and 25% at or above £250,000 (the main rate). Between those two figures, marginal relief tapers the rate smoothly: Corporation Tax = profit × 25% − (upper limit − profit) × 0.015 (the standard 3/200 fraction) — HMRC publishes an online calculator rather than this formula directly, but the two agree.
Both limits move for two reasons this calculator handles. Associated companies — broadly, other companies under common control with yours — divide both limits by one plus the number of OTHER associated companies (HMRC’s own example: three other associated companies divides the limits by four). Most single-property landlord companies have none, but a portfolio split across several companies, or a company with a linked trading business, can push profit into marginal relief or even the main rate far sooner than the headline £50,000/£250,000 figures suggest. Second, a shorter accounting period — your company’s first year, or one shortened for any other reason — reduces both limits in the same proportion: six months halves them.
Salary vs dividends for one director
A salary is deductible against Corporation Tax, but it costs employer’s National Insurance on top — 15% above £5,000 a year — and the director pays employee NI and income tax on it. A dividend is not deductible — the company pays Corporation Tax on the full profit regardless — but it carries no National Insurance at all, only dividend tax, at £500 tax-free then 10.75%/35.75%/39.35% depending on where it lands above your other income (the dividend rates and bands are UK-wide even if you live in Scotland, which only changes the salary side of this comparison).
The gotcha most one-person landlord companies hit: the Employment Allowance (£10,500 for 2026/27, taken off the employer NI bill) is not available if you are the company’s only director and its only employee liable for Class 1 NI — HMRC’s eligibility rule excludes exactly that case. If it is just you, tick “No” above and the full employer NI cost applies to your own salary.
A dividend can also only be paid out of profit the company actually has after Corporation Tax — Companies Act 2006 s.830(1) allows a distribution only “out of profits available for the purpose”. If the amount you want to draw exceeds what is left after this period’s Corporation Tax, the calculator flags it: you cannot legally pay it as a dividend from this period’s profit alone.
What this leaves out, on purpose
Company accountancy fees, VAT, the mortgage-rate premium some lenders charge on company buy-to-let borrowing, ATED on properties held through certain corporate structures over £500,000, ongoing payroll for any employees beyond the one director modelled here, and any Capital Gains Tax on eventually selling the company or the property inside it. For the personal-vs-company decision as a whole — including the one-off cost of moving an existing property in — use the limited company vs personal calculator; for the transfer cost itself, the transfer guide; for dividend tax on its own, the dividend tax calculator; and for how Section 24 restricts interest relief for personally owned property, Section 24 explained. General information, not advice — a real payroll, dividend voucher and set of company accounts should go through an accountant.
Corporation Tax rates, thresholds and the marginal relief fraction: taxdata.py (verified 29-Aug-2026), re-checked against gov.uk “Corporation Tax: Marginal Relief” guidance, read 13-Sep-2026 (associated companies and short-accounting-period rules quoted there). Employer NI rate/threshold and the Employment Allowance amount: gov.uk “Rates and thresholds for employers 2026 to 2027”. Employment Allowance eligibility (single-director exclusion; £100,000 prior-year cap removed from April 2025): gov.uk/employment-allowance and gov.uk/claim-employment-allowance/eligibility, all read 13 Sep 2026. Distributable-profits rule: Companies Act 2006 s.830(1), legislation.gov.uk, read 13 Sep 2026. Dividend tax and employee NI: taxdata.py and pages_wave12_salary.py (both verified against gov.uk, 29-Aug/12-Sep-2026).
Asked constantly
Profit above £50,000 and below £250,000 is taxed at the main rate of 25%, then reduced by (the upper limit minus your profit) multiplied by 0.015 — the standard 3/200 fraction. The result tapers smoothly from 19% up to 25% as profit rises through the band.
Yes, and it catches people out. The £50,000 and £250,000 limits are divided by one plus the number of OTHER companies under common control with yours. A landlord running two or three property companies, or a company alongside a separate trading business under the same ownership, can be pushed into marginal relief, or the full main rate, at a much lower profit than the headline figures suggest.
Yes — a limited company deducts loan interest and other finance costs as a normal business expense before Corporation Tax, with no equivalent of the personal Section 24 rule that replaces the deduction with a basic-rate credit. That full deduction is the main reason incorporation gets discussed at all; the Section 24 guide covers the personal-ownership side.
Only if someone else on the payroll besides you is also liable for employer's Class 1 National Insurance. HMRC's rule specifically excludes a company where the sole director is the only employee liable for it — the single most common landlord-company setup. If that is your situation, the full 15% employer NI applies to your salary with no allowance to offset it.
It depends on your other income, how much you draw, and whether you are the only person on the payroll. Salary costs employer and employee National Insurance but is deductible against Corporation Tax and builds a qualifying year for the State Pension; dividends carry no National Insurance at all but are taxed after the company has already paid full Corporation Tax on the profit. This calculator runs both for the same amount so you can compare the net figure directly rather than guess.
No. Section 830(1) of the Companies Act 2006 only allows a distribution “out of profits available for the purpose” — broadly, accumulated realised profits after Corporation Tax. If the amount entered exceeds what is left after this period's Corporation Tax, the calculator flags the shortfall; the legal fix is a smaller dividend, a loan from the company (with its own tax rules), or waiting for retained profit from an earlier year.
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Disclosure: we make and sell the Tax Pack — this is our own product, not a paid recommendation. It does not file anything with HMRC and it is not tax advice; filing goes through you, your accountant or software on HMRC’s compatible-software list.
Sources
The primary documents this page is built from. Links checked 5 September 2026.
- Marginal Relief for Corporation Tax — GOV.UK
- HMRC — Rates and thresholds for employers 2026 to 2027 — GOV.UK / HMRC
- Companies Act 2006 s.830 — legislation.gov.uk