Corporation Tax and marginal relief calculator
Enter the accounting period, taxable total profits and the number of associated companies to see the Corporation Tax due. Profits up to £50,000 are taxed at 19% and profits over £250,000 at 25%; in between, the main rate applies less marginal relief. The limits are divided for associated companies and reduced for short periods.
Key facts
| Small profits rate | 19% where augmented profits do not exceed the lower limit |
|---|---|
| Main rate | 25% where augmented profits exceed the upper limit |
| Lower and upper limits | £50,000 and £250,000 a year (Corporation Tax Act 2010, s18D) |
| Marginal relief | 3/200 × (upper limit − augmented profits) × (taxable profits ÷ augmented profits) |
| Associated companies | Both limits divided by 1 + the number of associated companies |
| Short accounting period | Limits reduced in proportion; HMRC's validation uses days |
| Financial years covered | FY2023 to FY2027 (1 April 2023 to 31 March 2028), all at the same rates; FY2027 enacted by Finance Act 2026 |
As at 25 October 2026.
Work out the Corporation Tax
Worked examples
Four examples; the calculator gives each result to the penny.
| Facts | Working | Corporation Tax |
|---|---|---|
| 12 months to 31 March 2027, profits £100,000, no associated companies | £25,000 − 3/200 × (£250,000 − £100,000) = £25,000 − £2,250 | £22,750.00 |
| The same, with 1 associated company (limits £25,000 and £125,000) | £25,000 − 3/200 × (£125,000 − £100,000) = £25,000 − £375 | £24,625.00 |
| 1 April to 31 December 2026 (275 days), profits £55,000 | Upper limit £250,000 × 275/365 = £188,356.16; relief (£188,356.16 − £55,000) × 3/200 = £2,000.34; £13,750 − £2,000.34 | £11,749.66 |
| Calendar year 2026 (90 days in FY2025, 275 in FY2026), profits £100,000 | FY2025: £24,657.53 at 25% = £6,164.38, relief £554.79. FY2026: £75,342.47 at 25% = £18,835.62, relief £1,695.21 | £22,750.00 |
HMRC's Company Taxation Manual (CTM03930) shows the short-period example in months instead (9/12 of the upper limit, £187,500), which gives marginal relief of £1,987.50. The calculator follows the days-based method that HMRC's CT600 validation uses.
How the calculator works
- It adds exempt distributions received to the taxable total profits: these are the augmented profits that decide the rate. Distributions from 51% group companies are left out of box 620.
- It splits the accounting period at 31 March into its financial years and divides profits between them by days. For FY2023 to FY2027 every rate and limit is the same, so the split does not change the total, but the CT600 still needs it (boxes 330 to 395).
- For each part it reduces the £50,000 and £250,000 limits in proportion to the days and divides them by 1 + the number of associated companies.
- Where augmented profits are at or below the lower limit it applies 19%. Otherwise it applies 25% and, below the upper limit, deducts marginal relief.
Associated companies
Two companies are associated if one controls the other, or both are under the same control, at any time in the accounting period. A company that did not carry on a trade or business at any time in the period is ignored (Corporation Tax Act 2010, s18E). Three associated companies, for example, divide both limits by four: £12,500 and £62,500.
Where the number of associated companies differs between the two financial years of a straddling period, HMRC treats each part separately (CTM03955) and the CT600 has boxes 327 and 328 for the two counts. This calculator takes one count for the whole period.
Assumptions and limits
- Enter taxable total profits (box 315): profits after adjustments, capital allowances, losses and other reliefs. Work out allowances with the capital allowances calculator.
- Close investment-holding companies cannot use the small profits rate or marginal relief, and ring fence profits have their own rates; neither is covered.
- An accounting period cannot be longer than 12 months; split a longer period of account first, as the CT600 deadline calculator does.
- Rates as at 25 October 2026. The Autumn Budget on 28 October 2026 may change rates for later years; check the current rates before relying on a result for FY2027 or later.
Frequently asked questions
What is the Corporation Tax rate for 2026?
For the financial year from 1 April 2026 the main rate is 25% and the small profits rate 19%, with marginal relief for augmented profits between £50,000 and £250,000.
How is marginal relief worked out?
3/200 of the difference between the upper limit and augmented profits, multiplied by taxable profits divided by augmented profits. It is deducted from tax at the main rate.
How do associated companies affect the tax?
They divide the £50,000 and £250,000 limits by one plus the number of associated companies, so less profit is taxed at 19% and more at 25%.
What if my accounting period is shorter than 12 months?
The limits are reduced in proportion. HMRC's validation uses the number of days in the period over 365, which this calculator follows.
Does a period across 1 April need two calculations?
On the CT600, yes: profits are divided between the two financial years by days. While the rates are the same, the total tax is unchanged.
Sources
- HMRC: rates and allowances, Corporation Tax
- GOV.UK: Corporation Tax marginal relief
- Corporation Tax Act 2010, section 18D
- Corporation Tax Act 2010, section 18B
- Corporation Tax Act 2010, section 18E
- HMRC Company Taxation Manual, CTM03930
- HMRC Company Taxation Manual, CTM03955
- HMRC: CT600 technical specifications, appendices (marginal relief validation)
- HMRC: the Company Tax Return guide (CT600)
Prepare your statutory accounts
Create an account and set up your company from the Companies House register; your first set of accounts is free. The trial balance import and the CT600 are in preparation.
Join the waitlistGeneral information about UK company law and tax, not legal or tax advice. The directors remain responsible for the accounts and returns they approve and file.