UK Corporation Tax Calculator 2025/26

Worked example

Example: a standalone company with £100,000 taxable profit in 2025/26.

Profit of £100,000 sits between the £50,000 lower limit and the £250,000 upper limit, so marginal relief applies.

• Step 1 - Tax at the main rate: £100,000 x 25% = £25,000
• Step 2 - Marginal relief: 3/200 x (£250,000 - £100,000) = 0.015 x £150,000 = £2,250
• Step 3 - Corporation tax due: £25,000 - £2,250 = £22,750
• Step 4 - Effective rate: £22,750 / £100,000 = 22.75%

The company pays £22,750, an effective rate of 22.75%, which sits between the 19% small profits rate and the 25% main rate. If the same company had two associated companies (N = 2), the limits would halve to £25,000 and £125,000. Profit of £100,000 would still fall in the marginal band: £25,000 - (3/200 x (£125,000 - £100,000)) = £25,000 - £375 = £24,625, an effective rate of 24.63%.

How the 2025/26 corporation tax calculator works

This calculator applies the corporation tax rates set out in the Finance Act for the financial year 2025 (1 April 2025 to 31 March 2026). The UK operates a two-rate system with a bridge between them:

• Small profits rate of 19% for taxable profits up to £50,000.
• Main rate of 25% for taxable profits of £250,000 or more.
• Marginal relief for profits between £50,000 and £250,000, which tapers the effective rate smoothly from 19% up to 25%.

To use the tool, enter your taxable total profit for the accounting period. That is your profit after deducting allowable business expenses, salaries, pension contributions and capital allowances such as the Annual Investment Allowance or full expensing. It is not your turnover and not your accounting profit before tax adjustments. If your figures are still in draft, use your best estimate of the final taxable profit.

The second input is the number of associated companies, including the company you are calculating for. Most single companies leave this at 1. If your company is under common control with other companies, the two profit limits are shared out, which we explain in detail below.

The calculator then decides which band you are in. Up to £50,000 the whole profit is taxed at 19%. From £250,000 upward the whole profit is taxed at 25% with no relief. In between, it charges the main rate and subtracts marginal relief. The result is the corporation tax due for the period plus the effective rate, so you can see the true percentage of profit going to HMRC rather than just the headline rate.

These rates have been stable since April 2023 and are unchanged for FY2023, FY2024 and FY2025, so the same maths applies to accounting periods across those years. Where your accounting period straddles 1 April, profits are time-apportioned, but because the rates have not changed the outcome is identical. The one thing that does change the answer is a short accounting period of less than 12 months, which reduces both limits proportionately. A six-month period, for example, halves the £50,000 and £250,000 limits.

Marginal relief and the 26.5% effective rate

Marginal relief is the mechanism that stops profits jumping straight from 19% to 25% the moment they pass £50,000. Without it, a company earning £50,001 would face a huge cliff-edge. Instead, relief is deducted from the main-rate calculation so the rate climbs gradually.

The formula HMRC uses is:

Corporation tax = (profit x 25%) minus (3/200 x (£250,000 - profit))

The fraction 3/200 equals 0.015, or 1.5%. That figure is chosen deliberately. Every extra pound of profit inside the £50,000 to £250,000 band is effectively taxed at 26.5%, not 25%. This is because you lose 1.5 pence of relief for each pound earned on top of the 25% charge. So the marginal rate on the band is higher than the main rate, even though the overall effective rate on total profit stays below 25%.

A worked comparison shows the taper clearly for a standalone company:

• £50,000 profit: £9,500 tax, effective rate 19.00%
• £100,000 profit: £22,750 tax, effective rate 22.75%
• £150,000 profit: £36,000 tax, effective rate 24.00%
• £200,000 profit: £49,250 tax, effective rate 24.63%
• £250,000 profit: £62,500 tax, effective rate 25.00%

Notice how the effective rate never quite reaches 25% until you hit the upper limit, but the marginal rate on each slice in between is 26.5%. This has a planning consequence. Reducing profit that sits inside the marginal band, for example through an additional employer pension contribution before the year end, saves tax at 26.5% rather than 19% or 25%. That makes the band the most valuable place to make deductible contributions.

One technical point: the formula above uses augmented profits, which are your taxable profits plus certain exempt distributions received (franked investment income) from non-group companies. For most small companies with no such income, augmented profits equal taxable profits and the simple formula holds exactly. If your company receives dividends from companies outside your group, those are added when testing against the limits, which can push you further up the taper.

How associated companies reduce your limits

The £50,000 and £250,000 limits are not per company in every case. They are shared between associated companies to stop a group splitting its profits across many small companies to stay in the 19% band. This rule was reintroduced alongside the small profits rate in April 2023.

A company is associated with another if one controls the other, or both are under the control of the same person or people. Control usually means holding more than 50% of the share capital, voting rights or profits. Dormant companies are ignored, and genuinely independent companies that merely trade with each other are not associated.

To adjust the limits, you divide both by the total number of associated companies, counting the company you are taxing. HMRC gives the example: if your company has three other associated companies, the limits are divided by four. That turns the £50,000 lower limit into £12,500 and the £250,000 upper limit into £62,500 for each company in the group.

In this calculator, the associated companies field is the total count including the company itself, so enter 4 for a company with three associates. The effect can be significant:

• 1 company (standalone): limits stay at £50,000 and £250,000.
• 2 companies: limits become £25,000 and £125,000 each.
• 4 companies: limits become £12,500 and £62,500 each.

Because the limits shrink, profits that would have been taxed at 19% on their own can be pushed into marginal relief or even up to the full 25% main rate. For a company earning £40,000, standing alone it pays 19% (£7,600). But if it has one associate, its lower limit drops to £25,000, the £40,000 now falls in the marginal band, and its bill rises. This is why the number of associates is one of the most important figures to get right, and why HMRC scrutinises company structures that look designed to multiply the limits. If in doubt about whether a company counts as associated, check the control tests in HMRC's Company Taxation Manual or take professional advice before filing your CT600.

Deadlines, payment and what to do next

Working out the figure is only half the job. Corporation tax has its own filing and payment timetable that differs from other UK taxes, and missing it triggers automatic penalties and interest.

Payment deadline: For companies with taxable 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 year end of 31 March 2026 must pay by 1 January 2027. Note that the payment deadline comes before the filing deadline, which catches many first-time directors out.

Filing deadline: Your Company Tax Return (form CT600) must be filed with HMRC within 12 months of the end of your accounting period. For a 31 March 2026 year end that is 31 March 2027. Accounts must also go to Companies House, usually within nine months of the year end.

Large companies: Companies with profits over £1.5 million (reduced by associated companies) normally pay in quarterly instalments rather than in one lump sum, and very large companies pay even earlier. This calculator computes the tax charge itself; it does not schedule instalment payments.

A few practical checks before you rely on the number:

• Confirm your profit figure is the taxable total profit after capital allowances, not the accounting profit. Add back disallowable items such as entertaining and depreciation, and deduct capital allowances.
• Check whether your accounting period is exactly 12 months. Shorter periods reduce both limits pro rata.
• Count associated companies carefully, including overseas companies under common control.
• Remember reliefs this tool does not model, such as R&D tax relief, patent box, loss carry-back and group relief, which can reduce the final bill.

Use the result as a reliable estimate for budgeting and setting money aside, then have your accountant confirm the final figure on the CT600. Setting aside the effective-rate percentage of every payment your company receives is a simple way to make sure the cash is there when the bill falls due. If your profit sits inside the marginal band, this is also the moment to consider a year-end pension contribution or other deductible spend, since relief is worth 26.5% on that slice.

Frequently asked questions