Key takeaways

  • The main rate stays at 25% and the small profits rate at 19% for the financial year starting 1 April 2028, with marginal relief between £50,000 and £250,000.
  • The R&D claim notification form is scrapped for claims made on or after 1 April 2027, and the additional information form is simplified from autumn 2027.
  • Amended company tax returns must be filed online from 1 April 2028, with exceptions. Prescribed computations will come on a slower timetable.
  • A consultation on simplifying corporation tax and a call for evidence on modernising its administration are open, the latter until 20 January 2027.
  • Banks pay a 6% surcharge for 15 months from January 2027, and advance corporation tax is abolished from April 2031.

Budget 2026 keeps the government’s promise of stable corporation tax rates and focuses instead on administration. Rates are confirmed for 2028-29, R&D claims get simpler, amended returns move online, and two reviews of the wider system are under way. The changes to capital allowances and to company distributions, covered in separate posts, will affect more companies than anything here.

Rates confirmed

The government is keeping to its 2024 Corporate Tax Roadmap, which caps the main rate at 25%. Finance Bill 2026-27 sets the charge for the financial year beginning 1 April 2028:

The same figures apply for the financial years starting 1 April 2026, 2027 and 2028:

Corporation taxFY 2026 to FY 2028
Main rate25%
Small profits rate19%
Lower limit£50,000
Upper limit£250,000
Marginal relief fraction3/200

The limits are still divided between associated companies and adjusted for short accounting periods. Our guide to corporation tax rates for 2026-27 and the corporation tax calculator show how marginal relief works.

R&D tax relief claims

HMRC’s tax information and impact note says:

  • companies making R&D claims on or after 1 April 2027 will no longer need to submit a claim notification form
  • the additional information form will be simplified and rationalised from autumn 2027, with details given to stakeholders in advance

The note says the changes reflect the lower error and fraud risk now associated with the R&D schemes. Around 40,000 companies a year claim under the merged R&D expenditure credit scheme or enhanced R&D intensive support. ICAEW welcomed the change, saying the notification form could stop valid claims being made because of procedural oversights. Until 1 April 2027 the current notification rules still apply, so do not let a deadline pass in the meantime. See our guide to R&D tax relief.

Company tax return changes

HMRC has published its response to the consultation on modernising company tax returns:

  • Online amended returns. Amended company tax returns must be filed online from 1 April 2028, for amendments submitted on or after that date whatever the period. There will be exceptions for amendments connected with enquiries or litigation, complex changes across several companies or periods, returns filed with software that is no longer available, and cases where HMRC systems cannot accept an online filing.
  • Prescribed computations. HMRC is still introducing a prescribed format and XBRL tagging for corporation tax computations, but on a longer and more flexible timetable. It paused the co-creation work in June 2026 and will consult on the complete set of requirements in early 2027. Software will only need to support the sections relevant to its users, and enforcement measures aimed at software providers will not be introduced for now.

Reviews of the wider system

  • Corporate tax simplification. A consultation sets out areas where targeted simplification could improve certainty, including innovation reliefs, the controlled foreign company rules and interest restrictions. ICAEW reports that responses are requested by 21 November 2026, as the start of a longer programme of work.
  • Modernising corporation tax administration. A call for evidence looks at how companies could be helped to get their tax right first time, including through better information flows, proportionate requirements, automation and artificial intelligence, and the role of agents. It closes on 20 January 2027.
  • Tax Update in 2027. The government will announce further simplification and modernisation measures at a Tax Update in 2027.

Other corporation tax measures

  • Close company reporting. Following consultation, the government will not introduce new reporting of payments to participators at this time. HMRC said responses showed many small companies are struggling with their existing obligations and that guidance needs to improve.
  • Bank surcharge. The surcharge on banking profits rises from 3% to 6% from 1 January 2027 to 31 March 2028, then returns to 3%.
  • Advance corporation tax. The remaining regime will be repealed on 1 April 2031, and any surplus balances will be extinguished.
  • Foreign permanent establishments. The foreign branch exemption becomes mandatory for accounting periods beginning on or after 1 January 2027.
  • Advance Tax Certainty Service. The entry threshold falls from £1 billion to £300 million of investment from 4 November 2026.
  • Creative credits and interest restriction. From 1 January 2027 the audio-visual and video games expenditure credits are excluded from taxable earnings for the corporate interest restriction.
  • Pillar 2. The OECD’s side-by-side package and other technical changes are made to the multinational and domestic top-up taxes.

What it means for accountants

Check accounts software for 2028. Online-only amendments from 1 April 2028 mean practices need software that can file amended returns, and a record of when the exceptions apply.

Plan R&D claims around the April 2027 change. Claims made before 1 April 2027 still need a notification form where one is required.

Respond to the reviews. The simplification consultation and the call for evidence are a chance to fix the parts of corporation tax that cost small companies most to comply with.

For the other company tax changes, see capital allowances after Budget 2026, company distributions reform and Budget 2026 for limited company directors.

Frequently asked questions

Is corporation tax going up after Budget 2026?

No. The main rate stays at 25% and the small profits rate at 19%, with marginal relief between £50,000 and £250,000, including for the financial year starting 1 April 2028.

When is the R&D claim notification form being removed?

For R&D claims made on or after 1 April 2027. The additional information form will be simplified from autumn 2027.

Do amended company tax returns have to be filed online?

Yes, from 1 April 2028, subject to exceptions such as amendments connected with enquiries or litigation, complex multi-period or multi-company changes, and cases where online filing is not possible.

Is the bank surcharge changing?

Yes. It rises from 3% to 6% from 1 January 2027 to 31 March 2028, and then returns to 3%.

Sources

Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 28 October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.