Calculation workings
The chart shows how the effective CT rate rises from 19% through the marginal relief band (£50,001 to £250,000) to 25%. The marginal rate within this band is 26.5%.
Frequently asked questions
Marginal relief tapers the corporation tax rate for companies with profits between £50,000 and £250,000. Instead of jumping from 19% to 25%, the effective rate increases gradually through this band. The marginal relief fraction is currently 3/200, applied to the difference between the upper limit and your profits. Our calculator applies this automatically.
Taxable profits include trading profits (income minus allowable business expenses), property income, investment income, and capital gains. Allowable deductions include salaries, rent, equipment costs, professional fees, and capital allowances. Director dividends are not deductible as they are paid from after-tax profits.
Yes. You must still file a Company Tax Return (CT600) with HMRC even if your company made a loss or had no taxable activity. The return is due 12 months after the end of the accounting period. Losses can be carried back one year or carried forward indefinitely to offset future profits.
If your company has associated companies (broadly, companies under common control), the thresholds are divided between them. For example, if you have two associated companies each threshold is halved, meaning the small profits rate applies only up to £25,000 and the full 25% rate applies above £125,000. This prevents splitting profits across multiple companies to access lower rates.
For small companies with profits below £1.5 million, corporation tax is due 9 months and 1 day after the end of the accounting period. For large companies above this threshold, quarterly instalment payments apply. HMRC charges interest on late payments from the due date, currently at the official rate plus a margin.