UK Corporation Tax Calculator

There are two rates. Companies with taxable profits of £50,000 or less pay the small profits rate of 19%. Companies with profits over £250,000 pay the main rate of 25% on all of their profits. Between those two figures, you pay the 25% main rate but claim Marginal Relief, which tapers the effective rate up smoothly from 19% to 25% rather than applying a cliff edge.

It is a deduction from your Corporation Tax bill that applies when profits fall between the £50,000 lower limit and the £250,000 upper limit. Without it, a company earning £50,001 would jump from 19% to 25% overnight. Marginal Relief smooths the transition, so the effective rate on total profits climbs gradually across the band — for example, a company with £100,000 of profit pays an effective 22.75%.

The statutory formula is F × (U − A) × (N ÷ A), where F is the standard fraction of 3/200, U is the upper limit, A is augmented profits and N is taxable total profits. For most companies with no franked investment income, augmented profits equal taxable profits, so it simplifies to 3/200 × (£250,000 − your profit). On £100,000 of profit that gives relief of £2,250, reducing the £25,000 main-rate charge to £22,750.

It is the effective rate on each extra pound of profit earned between £50,000 and £250,000 — not a rate you enter on a return. Because Marginal Relief tapers away as profits rise, every additional pound in that band costs 26.5p, which is higher than the 25% main rate itself. It is a useful shortcut: £50,000 at 19% plus the balance at 26.5% gives the same answer as the statutory formula.

Because you are losing Marginal Relief at the same time as paying tax on the extra profit. Each additional pound of profit both attracts 25p of tax and reduces your relief by 1.5p, giving a combined cost of 26.5p. Once profits pass £250,000 the relief is exhausted and the marginal rate falls back to the headline 25%.

Associated companies are companies under common control — broadly, where one controls the other, or both are controlled by the same person or people. Both the £50,000 and £250,000 limits are divided by the total number of associated companies including your own. If you have three other associated companies, the limits become £12,500 and £62,500, so a company earning £100,000 pays the full 25% with no Marginal Relief at all.

No. Dormant companies are generally disregarded when counting associated companies, as are certain passive holding companies. But a company that is trading, however small, does count and will dilute your limits. This is why groups that historically set up multiple companies casually can find themselves paying the main rate on modest profits.

For companies with profits up to £1.5 million, Corporation Tax is due nine months and one day after the end of your accounting period. So a company with a 31 March year end must pay by 1 January. Note that the payment deadline comes before the filing deadline for the return itself, which is 12 months after the period end — you pay first, file second. Larger companies pay by quarterly instalments instead.

Both profit limits are reduced proportionately. A six-month accounting period halves them to £25,000 and £125,000, so the same annualised profit level hits the main rate sooner. This matters most in a company's first or final period, and when changing year end — a short period can push you into Marginal Relief or the main rate unexpectedly.

Profit, not turnover. You pay Corporation Tax on your taxable total profits — income after deducting allowable business expenses, capital allowances on qualifying equipment, and any losses you are relieving. A company with £1 million of turnover and £950,000 of costs pays tax on £50,000, not £1 million.

Yes. Corporation Tax is charged on profits as they arise, regardless of whether you take them out or leave them in the business. Retaining profit does not defer the tax. Drawing that profit out later as a dividend then triggers a separate personal Income Tax charge in your own hands — dividends are paid out of post-tax profit, so the company tax comes first either way.

Almost certainly, and it is easy to miss. A US person who owns or controls a foreign corporation generally has to file Form 5471 with their US return, and the company may be a controlled foreign corporation with GILTI or Subpart F consequences that tax UK profits in the US before any dividend is paid. UK Corporation Tax paid does not automatically shelter you. This is one of the most common and expensive traps for Americans running UK companies.

The usual routes are claiming everything you are entitled to: capital allowances including full expensing on qualifying plant and machinery, R&D relief if you carry out qualifying development, employer pension contributions, and making sure genuine business expenses are actually claimed. Paying a commercially justifiable salary also reduces taxable profit. What does not work is retaining profit to defer tax, or splitting a business into multiple companies — the associated companies rules exist precisely to stop the latter.

Yes. You must file a CT600 return for every accounting period in which your company is within the charge to Corporation Tax, whether or not there is any tax to pay. Filing a loss-making return also matters practically: it is how you record the loss so it can be carried forward against future profits or, in some circumstances, carried back.

No. Close investment holding companies are excluded and pay the main 25% rate regardless of profit level. Non-resident companies are also outside the small profits rate. For most ordinary trading companies, though, both are available, subject to the associated companies division of the limits.

It applies the exact FY2026 rates and limits — 19% small profits rate, 25% main rate, the £50,000 and £250,000 limits, and the 3/200 Marginal Relief fraction — with correct division for associated companies and pro-rating for short periods. It assumes augmented profits equal taxable profits, which is true for most companies with no franked investment income. It does not handle accounting periods straddling 1 April where rates change, quarterly instalment payments, or close investment holding company status.

The calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

If your profits sit in the Marginal Relief band, you have associated companies, or you are a US person owning a UK company with Form 5471 and GILTI exposure on top, the interactions are where real money is won and lost. Book a free 20-minute call with a TaxStone adviser to review both the UK and US sides together.