The Finance Act 2026 came into operation on 1 January 2026. It raises company income tax from 25% to 30%, extends the minimum alternate tax to all companies, abolishes the investment allowance, raises withholding tax on rent and on payments to non-residents, and gives GST payers more time to pay. Here is what changed and what to do.
| Change | Before | Now |
|---|---|---|
| Company income tax rate for resident companies | 25% | 30% |
| Minimum alternate tax (MAT) | loss-making companies only | all companies |
| Investment allowance on new business assets | available | abolished |
| Withholding tax on rent paid to residents | 10% | 15% |
| Withholding tax on contractors, dividends, interest and management or professional fees paid to non-residents | 10% or 15% | 20% |
| GST payment deadline | with the return, 21 days after the period | end of the following month |
A company now pays the higher of its normal income tax at 30% of taxable profit and MAT at 2% of turnover. MAT does not apply in a company’s first three years after incorporation. Low-margin businesses, such as traders and distributors, are most affected, because 2% of turnover can be more than 30% of a thin profit. Re-run your 2026 forecast to see which figure is higher, and base your instalments on it.
Two changes affect almost every business that pays rent or pays anyone abroad:
Update your withholding tables and supplier contracts, and remember that withholding tax deducted in a month is due to the NRA by the 15th of the following month.
See our page on tax compliance for help with GST filing.
Personal income tax rates are not changed by the Act. Redundancy and termination payments are now fully left out of employment income, so no PAYE is deducted from them, while final salary and holiday pay are still taxed. The Act also sets new fees and penalties for work and residence permits, with both employer and employee liable for penalties where a foreign employee has no permit. Employers of non-citizens must keep filing the payroll tax return introduced by the Finance Act 2025.
It came into operation on 1 January 2026 and was published in the Gazette on 7 January 2026.
30% for resident companies, up from 25%.
Every company pays the higher of 30% of profit and 2% of turnover, except in its first three years after incorporation.
15% on rent paid to residents, up from 10%.
Payment is now due by the end of the following month, but returns are still due within 21 days of the end of the period.
No. The Act does not change personal income tax rates.
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Checked on 11 November 2026. This page is general information based on the Finance Act 2026, not tax advice.
