Calculate UK Corporation Tax for 2026/27: 19% small profits rate, 25% main rate and 3/200 marginal relief, adjusted for associated companies and short periods.
Source: GOV.UK, Corporation Tax rates
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Quick Answer
UK Corporation Tax in 2026/27: 19% Small Profits Rate on profits up to £50,000, 25% Main Rate above £250,000. Marginal Relief applies between (effective ~26.5% on the slice from £50k to £250k).
Other companies under common control. Enter 0 if none.
365 for a full year. A shorter period reduces both limits in proportion.
Corporation Tax
£28,050.00
After Tax Profit
£91,950.00
Effective Rate
23.38%
How Corporation Tax works:
Profits up to £50,000.00 — 19% (small profits rate)
Profits between £50,000.00 and £250,000.00 — 19% to 25% (marginal relief applies)
Profits of £250,000.00 or more — 25% (main rate)
Your marginal relief: (£250,000.00 − £120,000.00) × 3/200 = £1,950.00, taken off £30,000.00 at 25%.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC and GOV.UK and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
UK Corporation Tax is charged on company profits. The main rate is 25% for profits over £250,000, and the small profits rate is 19% for profits up to £50,000. Between those two limits Marginal Relief applies, creating a gradual transition rather than a cliff edge, so the effective rate climbs steadily from 19% to 25% as profits rise. This two-rate structure has been in place since April 2023.
The relief works in an awkward way that catches directors out. Because it tapers as profits rise, the slice between £50,000 and £250,000 carries an effective rate of 26.5%, higher than the 25% main rate itself, and only at exactly £250,000 does the overall effective rate settle back to 25%. The practical result is a perverse incentive either to stay under £50,000 or to accept a marginal rate above the headline one.
The Marginal Relief fraction for 2026/27 is 3/200, applied to the gap between your profit and the £250,000 upper limit. On £120,000 of profit that produces £1,950 of relief against a headline charge of £30,000, leaving £28,050 to pay and an effective rate of 23.4%. Putting your own figure into the calculator is faster than working the fraction by hand and avoids the arithmetic slips that fractions invite.
Associated companies share the thresholds. If your company has one associated company, the small profits threshold becomes £25,000 and the main threshold becomes £125,000. Three companies split the bands into £16,667 and £83,333, and so on downwards. An accounting period shorter than 12 months cuts both limits in proportion too, so a 183-day period with no associated companies has limits of about £25,068 and £125,342. The calculator applies both adjustments: enter the number of associated companies and the length of the accounting period in days, and the limits and the Marginal Relief are worked out from them. The rule exists to stop a single business being divided across several companies to keep each one under the lower limit. Association is drawn widely, covering companies controlled by the same person, by a family group or by a spouse, even where the businesses have no commercial relationship.
Several things reduce taxable profit legitimately. Employer pension contributions are deductible, so they build the director's pot and cut the tax bill at the same time. A director's salary up to the £12,570 Personal Allowance is deductible for the company and tax-free for the individual. Company-paid private medical insurance is deductible too, though it creates a P11D benefit. R&D Tax Credits give a 20% above-the-line credit, and the Annual Investment Allowance offers 100% first-year relief on up to £1m of qualifying plant. Timing expenses around the year end can shift profit into the Marginal Relief band or below it.
Not every cost reduces the bill. Dividends paid to shareholders come out of profit that has already been taxed, so they are never deductible. Fines and penalties are excluded, as is most business entertaining, along with client gifts costing more than £50 and anything with a personal purpose. Drawing that boundary correctly at the bookkeeping stage saves untangling it when the accounts are prepared.
Example: £120,000 profit, no associated companies
- Profit: £120,000 (within marginal band)
- Tax at main rate: £120,000 × 25% = £30,000
- Marginal Relief: (£250,000 − £120,000) × 3/200 = −£1,950
- Corporation Tax payable: £28,050
- Effective rate: 23.4%
Source: GOV.UK, Corporation Tax rates
Frequently Asked Questions
- Why is the effective rate 26.5% between £50,000 and £250,000?
- Marginal Relief tapers away as profits rise, and the way it unwinds means each extra pound of profit inside that band is taxed more heavily than the headline main rate. The slice therefore carries an effective 26.5%, and the overall effective rate only settles at 25% once profit reaches £250,000 exactly. The fraction used to work out the relief for 2026/27 is 3/200. It explains why a company sitting just above £50,000 often looks at deferring income or bringing expenses forward.
- What counts as an associated company for Corporation Tax?
- The £50,000 and £250,000 limits are divided by one plus the number of associated companies, in other words by the number of companies in the group, so a company with one associate works to £25,000 and £125,000 while one with two associates works to £16,667 and £83,333. The limits are also cut in proportion for an accounting period shorter than 12 months, and the calculator takes both the number of associated companies and the period length in days. The point of the rule is to stop one business being spread across several companies to keep each below the small profits threshold. Association is defined by control rather than by trade, so companies controlled by the same person, family group or spouse are caught even with no commercial relationship between them.
- Which business costs can I deduct from Corporation Tax?
- Most genuine running costs come off profit before tax: staff salaries including a director's salary, employer pension contributions, rent, utilities, software, insurance, professional fees, travel and marketing. Equipment is handled through Capital Allowances or the £1m Annual Investment Allowance rather than as a straight expense. Qualifying research and development work attracts R&D Tax Credits worth a 20% above-the-line credit. Where a cost is genuinely incurred for the trade and properly recorded, it will normally qualify.
- When is my Corporation Tax return and payment due?
- They fall on different dates, and the payment comes first. Corporation Tax is due 9 months and 1 day after the end of your accounting period, while the CT600 return is not required until 12 months after that same date. Companies with profits of £1.5m or more sit outside this pattern and pay in quarterly instalments instead. Working the figure out early, even if you file later, is what stops the payment deadline arriving before the accounts are finished.