Corporate tax receipts rose 4% year-on-year to reach a record £100.4bn in 2925/26.
The figures include £95.1bn in mainstream corporation tax, in addition to the bank levy, the bank surcharge, the residential property developer tax, the energy profits levy, and the electricity generator levy.
The financial and insurance sector was the largest contributor to corporation tax receipts contributing £25.3bn in 2025/26, 27% of the total. This was followed by the wholesale and retail trade at £9.5bn, 10% of total corporation tax receipts, while professional, scientific and technical activities was the third largest contributor with £8.6bn or 9% of total corporation tax receipts.
Of the 20 industry sectors, 13 saw year-on-year increases in corporation tax receipts while seven experienced a decrease. The largest increase was in the financial and insurance sector which saw a £3.6bn or 17% increase in corporation tax liabilities.
Jonathan Hickman, a tax partner at BDO said: “The rise in corporation tax receipts in recent years has been mirrored by an increase in complexity.
“The UK’s current system combines a main rate, a small profits rate and a marginal relief regime. The result is a structure that is administratively burdensome and creates additional complexity as businesses move between the small profits rate and main rate regimes.
“At Budget 2026, we would like to see the Chancellor simplify the system by opting for a phased move towards a single rate of 21%, just below the EU average. This would make the UK more internationally competitive, create a system that’s easier to understand and operate, and relieve businesses of the need to work out an increasingly complicated set of calculations as profits increase.
“Phasing in a lower rate could also encourage businesses to front-load their investments and may give the economy a short-term boost.”
