11 June 2026
The 2025/2026 tax year has proven to be quite lucrative for HMRC, as it has been revealed that £938.8 billion in tax money was collected.
Businesses, many already facing the challenges of rising operational costs, may have felt unfairly targeted by steeper tax bills.
With the amount of tax collected this year projected to cross the £1 trillion threshold for the first time in history, there has never been a better time to understand your tax position and how to be more tax-efficient.
Which taxes are hitting businesses the hardest?
As a business owner, it might feel frustrating trying to keep running a successful business while changing tax rules place greater pressures on you.
A point that is sometimes used to counter the idea that businesses are bearing the brunt of tax is the idea that taxes from income are the single biggest source of tax generated each year.
This is broadly true as the combination of Income Tax and National Insurance Contributions (NICs) made up £552.8 billion of the tax bill.
However, businesses are not off the hook from this section of the tax haul.
Employer NICs blew past even the Treasury’s predictions by adding £28 billion to tax bills rather than the predicted £24 billion.
This was in spite of repeated protests from businesses that the increase to employer NICs would harm businesses by limiting their potential for recruiting and promoting staff.
VAT was the second-highest source of tax, with £180.7 billion generated.
Corporation Tax and other company taxes reached £101.4 billion, demonstrating the challenges that businesses face in keeping costs down.
For business owners and other individuals, their efforts to dispose of assets led to a 62 per cent increase in Capital Gains Tax (CGT), taking it from £13.68 billion to £22.18 billion.
How can a business be tax efficient?
Every business is different in terms of how it operates and the structure of its finances, so there is no blanket approach that will benefit all businesses.
What should be considered are ways to limit tax exposure where it is possible to do so.
Employer NICs can be offset in a number of ways and understanding this may be more important now that wages have increased once more.
An Employment Allowance exists to allow eligible businesses to reduce their National Insurance requirements by as much as £10,500.
Further options to consider would be reviewing how employees are compensated for their work.
While Benefits in Kind are still subject to NICs, other forms of compensation are exempt.
Salary sacrifice schemes are the most common way of reducing employer NICs, as employees benefit from enhanced pension contributions or a tangible reward like an electric car.
For the full range of taxes that businesses are exposed to, you will need professional support to ensure you are operating in a tax-efficient way.
Our team understand tax, so your business does not end up paying more than is needed.
We help you stay fully compliant while showing you your tax exposure to ensure that you understand where your obligations arise and how to deal with them.
Operational costs are an ongoing challenge for businesses across the UK and professional financial support can help to put you on a stronger financial footing.
Get in touch if you want to get a better understanding of your tax bill.