Your year-end accounts and tax return, with CIS suffered reconciled to your payment and deduction statements and carried as a tax asset. Doing that can change what you thought you earned.
The year-end job for a trade business is mostly ordinary: the accounts, the tax return, the numbers agreed before they are filed. What is not ordinary is CIS, and it is where we spend the time.
CIS suffered is a tax asset. It gets reconciled to your payment and deduction statements, because the statements are the evidence of what was deducted and on what basis. If your accounts have been showing CIS as a deduction from income, we fix that first and carry it as an asset on the balance sheet. That can change what you thought your business earned.
| Item | 2026/27 |
|---|---|
| Personal allowance | £12,570, tapered £1 for every £2 of income over £100,000 |
| Basic rate | 20% on the first £37,700 of taxable income |
| Higher rate | 40% from £37,701 to £125,140 |
| Additional rate | 45% above £125,140 |
| Class 4 NIC | 6% between £12,570 and £50,270, then 2% |
| Class 2 NIC | Not a mandatory charge. Treated as paid at or above the £7,105 Small Profits Threshold; voluntary below it at £3.65 a week |
The personal allowance and the basic rate limit are frozen to 5 April 2031 — the freeze was extended by three years at Budget 2025. The National Insurance Upper Earnings Limit and Upper Profits Limit stay aligned at £50,270, and the Class 4 Lower Profits Limit stays aligned to the personal allowance, all to 2030/31. In practical terms that means every pay rise and every good year moves more of your income into a higher band than it used to.
| Item | Financial year beginning 1 April 2026 |
|---|---|
| Small profits rate | 19% on augmented profits up to £50,000 |
| Main rate | 25% above £250,000 |
| Marginal relief | Between £50,000 and £250,000 |
| Associated companies | Both limits divided by the number of associated companies plus one |
And taking the money out got more expensive on 6 April 2026. The dividend ordinary rate rose two points to 10.75% and the upper rate two points to 35.75%. The additional rate is unchanged at 39.35% and the dividend allowance remains £500. For a director-shareholder drawing a modest salary and the rest in dividends, that is a real increase in the cost of extraction. We model it on your own figures.
For England, Wales and Northern Ireland: a personal allowance of £12,570, tapered away from £100,000; 20% on the first £37,700 of taxable income; 40% to £125,140; and 45% above that. The personal allowance and the basic rate limit are frozen to 5 April 2031, the freeze having been extended by three years at Budget 2025. Class 4 National Insurance is 6% between £12,570 and £50,270 and 2% above. Scottish non-savings rates differ and we would not quote them without checking your position.
No, not as a mandatory charge. Where your profits are at or above the Small Profits Threshold of £7,105, Class 2 contributions are treated as having been paid — your National Insurance record is protected automatically with nothing to pay. Below £7,105 you can pay voluntarily at £3.65 a week to protect the record, and that matters most if you are near a qualifying year. Class 4 is separate and still charged at 6% on profits between £12,570 and £50,270, then 2% above that.
For the financial year beginning 1 April 2026 it is unchanged from the year before: a small profits rate of 19% up to £50,000, a main rate of 25% above £250,000, and marginal relief between the two. The trap is associated companies — the limits are divided by the number of associated companies plus one, so three associated companies means dividing by four, which takes the lower limit from £50,000 to £12,500. The limits are also reduced proportionately for accounting periods shorter than twelve months.
If you are a sole trader or a partnership without corporate partners, yes — gov.uk describes it as the standard way to record income and expenses. It cannot be used by a limited company, an LLP, or a partnership with one or more corporate partners. Under the cash basis, cars are the exception on which capital allowances are still claimed; everything else you buy and keep for the business is claimed as an allowable expense. So a van and your tools are deducted as expenses.
Three months of returns and statements, a straight account of what is wrong and what it is costing, and a number on the gross payment status question.