Corporation Tax Rates 2025/26: Complete UK Guide
Everything you need to know about Corporation Tax rates for accounting periods starting on or after 1 April 2025.
The Rates
| Profit Level | Rate | Name |
|---|---|---|
| £0–£50,000 | 19% | Small Profits Rate |
| £50,001–£250,000 | 26.5% effective | Marginal Relief |
| Over £250,000 | 25% | Main Rate |
These thresholds are annualised — if your accounting period is less than 12 months, they're proportionally reduced.
How Marginal Relief Works
Companies with profits between £50,000 and £250,000 don't simply pay 25%. Instead:
- Calculate tax at the main rate (25%)
- Subtract marginal relief
The marginal relief formula:
MR = 3/200 × (£250,000 − Profits) × (Profits / Profits)
For a simplified version:
- Start at 19% on £50,000 = £9,500
- Gradually increase to 25% on £250,000 = £62,500
- The effective rate climbs from 19% to 25%
Worked Example: £120,000 Profit
| Step | Calculation | Amount |
|---|---|---|
| Tax at main rate | £120,000 × 25% | £30,000 |
| Marginal relief | 3/200 × (£250,000 − £120,000) | (£1,950) |
| Tax payable | £28,050 | |
| Effective rate | £28,050 / £120,000 | 23.375% |
Associated Companies
If your company has associated companies, the £50,000 and £250,000 thresholds are divided equally between them.
Two associated companies means:
- Small profits limit: £25,000 each
- Upper limit: £125,000 each
Who Counts as Associated?
Companies are associated if one controls the other, or both are under common control. This includes:
- Companies you own 50%+ of
- Companies controlled by you + connected persons (spouse, relatives)
- Other companies your shareholders control
Dormant companies don't count (but they did before April 2023 — be careful with older periods).
Short Accounting Periods
For periods shorter than 12 months, the thresholds are proportionally reduced:
6-month period:
- Small profits limit: £50,000 × 6/12 = £25,000
- Upper limit: £250,000 × 6/12 = £125,000
Split Periods (Straddling April 2023)
If your accounting period straddles 1 April 2023, it's split into two notional periods:
- Before 1 April 2023: 19% flat rate (no marginal relief)
- From 1 April 2023: New rates with marginal relief
Tax is calculated separately for each period and the results combined.
Payment Deadlines
Corporation Tax is due 9 months and 1 day after the end of your accounting period:
| Year-end | Payment due |
|---|---|
| 31 March 2026 | 1 January 2027 |
| 31 December 2025 | 1 October 2026 |
| 30 June 2025 | 1 April 2026 |
Large companies (profits over £1.5 million) pay in quarterly instalments.
Let Software Handle It
Marginal relief, associated companies, and split periods make manual calculation error-prone. Taxpipe handles all of it:
- Automatically detects marginal relief eligibility
- Calculates exact FY apportionment for split periods
- Accounts for associated companies
- Shows you the exact tax payable
Calculate your Corporation Tax with Taxpipe — accurate to the penny, £59 per filing.