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 | 19%–25% | 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.
Within the marginal band the effective rate rises gradually from 19% to 25% as profits climb from £50,000 to £250,000. Each additional pound of profit in the band is taxed at a marginal rate of 26.5% — but this is not your overall effective rate for the period.
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 statutory marginal relief formula (CTA 2010 s.18B):
MR = 3/200 × (upper limit − augmented profits) × (taxable total profits ÷ augmented profits)
For most small companies, augmented profits equal taxable total profits (no exempt distributions from other companies), so the fraction reduces to 1 and the formula simplifies to:
MR = 3/200 × (£250,000 − profits)
For a simplified view of how tax builds up:
- 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.
One associated company 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 towards the associated companies threshold (CTA 2010 s.25(3)).
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.