Is company profit taxed twice in the UK?

Yes. A limited company pays corporation tax on its profit. If the owner then draws what is left as dividends, dividend tax is charged on the same money on its way out. Salary drawn from the company is subject to income tax and National Insurance instead.

How much of a £200,000 profit reaches the owner after tax?

On 2026/27 rates, with a £12,570 salary and the rest drawn as dividends, about £105,313 reaches the owner and about 47% goes in tax across corporation tax, National Insurance, income tax and dividend tax. This is an illustration on published rates, not advice.

When can a business owner still change their tax bill?

During the financial year. An accountant prepares the return after the year has ended, by which point the figures are fixed. Decisions that change the bill are made before the year end.

Save tax | IQ Money

Save tax Grow profit

Every pound of profit is taxed twice before it reaches you.

The company pays corporation tax on the profit. If you draw dividends, you pay tax on that again.

Calculator What reaches you

Profit after all expenses are paid, before tax and before your own salary

Type an exact figure, or use the slider

£0 £1m £10m

What you pay yourself as salary

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£0 £500,000

The rest of what you draw comes to you as dividends.

Profit

£200,000

→

Tax

£94,687

47% of the profit

→

What reaches you

£ 105,313

salary and dividends, after every tax

Yours Tax the company paid Tax you paid

See the full breakdown

Profit before tax £200,000

Salary £12,570

Income tax −£2,514

Employee National Insurance −£0

Employer National Insurance −£1,136

Corporation tax −£45,618

Dividends £140,676

Dividend tax −£45,420

Net to you £105,313

£45,420 is the tax on dividends, over and above what the company had already paid. Illustration only, on 2026/27 rates. Not advice. Whether money should stay in or come out depends on your circumstances and is a question for a qualified adviser.

A good deal of it is unavoidable. The rest comes down to a few decisions.

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What will you do about it?

We're not accountants, so we don't wait until the year end. We can show you how to optimise your profit now.

Your tax year ends in

The year The decisions that change the bill happen here. Year end Your accountant

This calculator is an illustration only and is not advice. It is arithmetic on published rates. It assumes you own the business outright, draw everything available as dividends, and have no other income, pension contributions or reliefs. Real positions differ, often materially. Nothing here is tax, financial or legal advice, and you should speak to a qualified adviser before acting on anything it shows. Rates from corporation tax, dividend tax, National Insurance and income tax guidance on gov.uk, 2026/27, England, Wales and Northern Ireland.

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Every pound of profit is taxed twice before it reaches you.

A good deal of it is unavoidable. The rest comes down to a few decisions.

What will you do about it?

Do you know how your competitors are doing ?

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