UK Corporation Tax Calculator

Calculate Corporation Tax for 2025/26 including marginal relief and associated company adjustments.

2025/26 Tax Year: Small profits rate 19% (under £50,000). Main rate 25% (over £250,000). Marginal relief applies between £50,000 and £250,000.
Total profits before Corporation Tax
Includes this company and any controlled associates
Standard is 12 months. Short periods pro-rate thresholds.
Dividends received from other companies (augments profits)
Corporation Tax Due£0.00
Marginal Relief£0.00
Profit After Tax£0.00
Effective Rate0%

Tax Breakdown

ItemValue

Enter your company profits to calculate Corporation Tax liability.

UK Corporation Tax Calculator 2025/26

Use our free Corporation Tax Calculator to calculate how much Corporation Tax your UK limited company owes for the 2025/26 tax year. Includes marginal relief calculations, associated company adjustments, and short accounting period pro-rating.

Corporation Tax Rates 2025/26

From 1 April 2024, the UK operates a two-tier Corporation Tax system with marginal relief for companies whose profits fall between the lower and upper thresholds:

Rate Profit Threshold Tax Rate
Small Profits Rate Up to £50,000 19%
Marginal Relief Zone £50,001 to £249,999 19% to 25% (tapered)
Main Rate £250,000 and above 25%

How Marginal Relief Works

Companies with profits between £50,000 and £250,000 pay Corporation Tax at 25% but receive marginal relief that reduces the effective rate. The closer profits are to £50,000, the lower the effective rate.

The marginal relief formula is:

Marginal Relief = (Upper Limit − Augmented Profits) ÷ Upper Limit × (Tax at 25% − Tax at 19%)

Example: A company with £150,000 profits:

  • Tax at main rate (25%): £37,500
  • Marginal relief: (£250,000 − £150,000) ÷ £250,000 × (£37,500 − £28,500) = 0.4 × £9,000 = £3,600
  • Corporation Tax due: £37,500 − £3,600 = £33,900 (effective rate 22.6%)

What Are Associated Companies?

If your company controls one or more other companies (or is under common control with others), they are associated companies. The £50,000 and £250,000 thresholds are divided equally among all associated companies.

Two companies are associated if one controls the other, or both are under common control. Control typically means owning more than 50% of shares, voting rights, or distributable profits.

Associated Companies Lower Limit (each) Upper Limit (each)
1 (standalone) £50,000 £250,000
2 £25,000 £125,000
3 £16,667 £83,333
4 £12,500 £62,500

Short Accounting Periods

If your company’s accounting period is less than 12 months (e.g. a newly formed company or a change of accounting date), the thresholds are pro-rated:

  • Lower limit: £50,000 × (months ÷ 12)
  • Upper limit: £250,000 × (months ÷ 12)

Example: A company with a 6-month accounting period has thresholds of £25,000 (lower) and £125,000 (upper).

Augmented Profits and Distributions

When calculating marginal relief, HMRC considers augmented profits — your taxable profits plus any non-trading distributions received from other companies. This prevents companies from splitting profits across entities to stay under the thresholds.

Include any dividend income or other distributions from non-group companies in the calculator to get an accurate marginal relief figure.

When to Pay Corporation Tax

Corporation Tax must be paid 9 months and 1 day after the end of your accounting period. The Company Tax Return (CT600) must be filed within 12 months of the period end.

Deadline Requirement
9 months + 1 day after period end Pay Corporation Tax
12 months after period end File CT600 tax return
For large companies (>£1.5M profit) Quarterly instalment payments required

Frequently Asked Questions

What is the Corporation Tax rate for 2025/26?

The small profits rate is 19% (profits under £50,000). The main rate is 25% (profits over £250,000). Between £50,000 and £250,000, marginal relief tapers the effective rate from approximately 19% to 25%.

How is Corporation Tax calculated with marginal relief?

First calculate tax at 25% of profits. Then subtract marginal relief: (Upper Limit − Augmented Profits) ÷ Upper Limit × (Tax at 25% − Tax at 19%). The result is your Corporation Tax due.

Do associated companies affect my Corporation Tax rate?

Yes. If your company has associated companies (under common control), the £50,000 and £250,000 thresholds are divided equally between all associated companies. This means smaller profits trigger the main rate sooner.

Can I reduce my Corporation Tax bill?

Legitimate ways to reduce Corporation Tax include: claiming all allowable business expenses, using Annual Investment Allowance for equipment, claiming Research & Development tax credits, making pension contributions, and offsetting trading losses against profits.

What’s the difference between Corporation Tax and dividend tax?

Corporation Tax is paid by the company on its profits (19%-25%). Dividend Tax is paid by individuals when they receive dividends from the company after Corporation Tax has been deducted (8.75%-39.35%). Use our Dividend Tax Calculator to calculate personal tax on dividends.

How do I pay Corporation Tax to HMRC?

You can pay Corporation Tax online via bank transfer, Direct Debit, debit card, or corporate credit card. You will need your 17-digit Corporation Tax reference number. Payments must reach HMRC by the deadline (9 months and 1 day after period end).

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