Corporation tax calculator
Company tax on profit, including the marginal relief band where the effective rate climbs from 19% to 25%.
How this is calculated
Profit up to £50,000 is taxed at the small profits rate of 19%. Profit from £250,000 upwards is taxed at the main rate of 25%.
Between the two, tax is calculated at 25% and then reduced by marginal relief of 3/200 of the gap between profit and the upper limit. The effective rate climbs smoothly from 19% to 25% rather than jumping.
The consequence is a 26.5% marginal rate inside that band, higher than the main rate itself. A company on £100,000 of profit pays more per pound than one on £300,000.
The thresholds are divided by the number of associated companies. Two companies under common control face limits of £25,000 and £125,000 each, which is one of the most commonly missed rules.
Rates used · 2026/27
| Small profits rate | 19% up to £50,000 |
| Main rate | 25% from £250,000 |
| Marginal relief fraction | 3/200 |
| Effective marginal rate | 26.5% in the band |
| Associated companies | thresholds divided between them |
| Payment deadline | 9 months and 1 day after year end |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
On £90,000 of profit the tax is £20,100, an effective rate of 22.3%, leaving £69,900. That is 25% of the profit less marginal relief of £2,400, being 3/200 of the £160,000 gap up to the upper limit. Add one associated company and the thresholds halve to £25,000 and £125,000, which shrinks the relief to £525 and pushes the tax to £21,975.
Common questions
Why is my marginal rate higher than 25%?
Because marginal relief is withdrawn as profits rise. Each extra pound in the £50,000 to £250,000 band is effectively taxed at 26.5%, which is above the headline main rate.
What counts as an associated company?
Broadly any company under the same control, including through connected persons. Dormant companies with no assets are generally excluded. Getting the count wrong is a common and expensive error.
When is it due?
Nine months and one day after the end of the accounting period, with the return itself due twelve months after. Larger companies pay by instalments instead.
Is taxable profit the same as accounting profit?
No. Depreciation is added back and capital allowances are deducted, among other adjustments, so the figure your accounts show is rarely the figure you are taxed on.