For many owner‑directors, the biggest financial changes aren’t in corporation tax — they’re in how money is extracted from the company.

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Dividend allowances are now minimal

The tax‑free dividend allowance has been cut to £500 per person per year and remains at this level for 2026 and 2027.

This means:

• More dividends are taxed
• Dividend planning is more important
• Spouses’ allowances may be underused

✅ Director reminder:
Dividends are no longer “tax‑light by default”.

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Salary vs dividend balance needs reviewing

While employee NIC rates have reduced since earlier years, employer NIC thresholds remain frozen, and corporation tax relief must be considered alongside personal tax.

What worked in 2022 may no longer be optimal in 2026-27.

✅ Good practice:
Annual remuneration reviews — not “set and forget”.

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Director loan accounts under scrutiny

Overdrawn loan accounts continue to be a major compliance risk:

• Section 455 tax exposure
• Personal benefit implications
• Increased HMRC challenge

With better data matching, unresolved loan balances are easier for HMRC to detect.

✅ Rule of thumb:
If you need company cash personally, plan it — don’t borrow it informally.