UK Corporation Tax Receipts Reach £100.4bn as Growth Slows
UK Corporation Tax Receipts Reach £100.4bn as Growth Slows
UK corporation tax receipts passed £100bn for the first time in 2025–26, rising 4% to £100.4bn. Yet the £3.5bn annual increase suggests growth is levelling off, raising questions about the 25% main Corporation Tax rate, business investment and the wider economy.
What the latest HMRC figures show
HMRC reports that total receipts from all corporate taxes increased from £96.9bn in 2024–25 to £100.4bn in 2025–26. Receipts have more than doubled over the past decade: the source material records £49.08bn in 2016–17 and £59.9bn in 2019–20.
The headline total includes Corporation Tax and related levies. The main Corporation Tax rate rose to 25% in April 2023, while companies with profits of £50,000 or less generally remain within the 19% small-profits rate. According to the supplied figures, businesses paying at 19% contributed £2.92bn.
Why are Corporation Tax receipts slowing?
HMRC says the upward trend reflects the post-pandemic recovery, higher onshore Corporation Tax receipts following the rate increase, and the introduction of newer corporate taxes and levies. However, liabilities continued to grow at a slower pace in 2024–25, with much of that growth attributed to the full effect of the 25% main rate.
This does not prove that the higher rate alone has weakened growth. Receipts also move with company profitability, investment, wider economic conditions and sector-specific taxes. Even so, the 4% annual increase will fuel debate about whether the current system is delivering enough revenue without discouraging investment.
Which sectors paid the most Corporation Tax?
Financial and insurance businesses were the largest contributors, paying £25.3bn—27% of standard Corporation Tax receipts—and recording a 17% year-on-year increase. Their contribution has more than doubled from £12.84bn in 2020–21, while the Bank Levy now raises about £1.44bn a year.
Wholesale and retail trade contributed £9.5bn, down 6% year on year. Professional, scientific and technical activities paid £8.6bn.
What the figures mean for UK businesses?
The data raises three practical questions: whether the 25% rate remains internationally competitive; how far weak economic growth constraining profits and tax receipts is; and whether the gap between the 19% small-profits rate and the main rate creates avoidable complexity.
What happens next?
Attention will now turn to the next Budget and whether the government prioritises a rate review, targeted investment incentives or simplification. For business owners, the immediate priority is to understand which rate applies, plan for marginal relief where relevant and keep tax forecasts aligned with changing profits.