Corporation tax calculator (UK, 2026/27)

How UK corporation tax works in 2026/27

• 19% small profits rate: profits up to £50,000 are taxed at 19%.
• 25% main rate: profits of £250,000 or more are taxed at 25% on the whole amount.
• Marginal relief in between: profits between £50,000 and £250,000 are taxed at 25% minus a relief of (£250,000 minus profit) × 3/200. The result is a sliding effective rate from 19% up to 25%.
• The 26.5% trap: each extra pound of profit inside the band costs 26.5p in tax. That makes pension contributions and timing of costs unusually valuable for companies in this range.
• Associated companies: both limits are divided by the total number of associated companies. Two companies under common control each get limits of £25,000 and £125,000.

Rates last checked: 15 July 2026. These are the 2026/27 rates and they are unchanged from 2023 when the 25% rate and marginal relief returned.

Marginal relief worked example

Take a company with £100,000 of taxable profit and no associated companies. Step 1: £100,000 × 25% = £25,000. Step 2: marginal relief is (£250,000 minus £100,000) × 3/200 = £150,000 × 0.015 = £2,250. Step 3: £25,000 minus £2,250 = £22,750 of corporation tax, an effective rate of 22.75%. The same profit split across two associated companies would be taxed differently because each company only gets half the limits.

What counts as an associated company?

Broadly, companies under common control at any point in the accounting period, most often the same person or group owning more than half of each. Dormant companies do not count, and neither do most passive holding companies. If you own two trading companies, each one divides the £50,000 and £250,000 limits by two. This catches a lot of contractor and property owners who set up a second company without realising it drags the first one into the marginal band earlier.

Profit first, then dividends: the planning order

Corporation tax comes off before dividends can be paid, and dividends then get taxed again personally: 8.75% in the basic band, 33.75% in the higher band and 39.35% in the additional band, with only a £500 tax free dividend allowance. The gated planner works through the full chain: profit, corporation tax with marginal relief, distributable profit, then your planned dividends through the personal bands so you can see the combined tax rate on every pound the company earns.

How much is corporation tax for a limited company?

For 2026/27: 19% on profits up to £50,000, 25% on profits of £250,000 and above, and a sliding effective rate between the two thanks to marginal relief. A company with £100,000 profit pays £22,750, an effective 22.75%.

How is marginal relief calculated?

Tax the whole profit at 25%, then subtract (£250,000 minus profit) × 3/200. The 3/200 fraction is set by HMRC. With no associated companies and a 12 month period, that is the whole calculation.

What is the effective rate between £50,000 and £250,000?

The average rate slides from 19% to 25%, but the marginal rate on each extra pound in the band is a flat 26.5%. That is higher than the main rate, which is why profits just over £50,000 are worth managing.

Do associated companies change the corporation tax limits?

Yes. Divide both the £50,000 and £250,000 limits by the number of associated companies including your own. Two associated companies means limits of £25,000 and £125,000 each.

When is corporation tax due?

Payment is due 9 months and 1 day after the end of the accounting period, and the CT600 return is due 12 months after. Companies with profits over £1.5 million pay in quarterly instalments instead.

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