The rates for 2026/27
The UK has two Corporation Tax rates. The small profits rate of 19% applies when taxable profits are £50,000 or less, and the main rate of 25% applies when profits are above £250,000. A company with profits between the two pays the main rate and then claims Marginal Relief, which brings the bill down.
| Taxable profits | What applies | Effective rate |
|---|---|---|
| Up to £50,000 | Small profits rate | 19% |
| £50,001 to £250,000 | Main rate less Marginal Relief | Between 19% and 25% |
| Over £250,000 | Main rate | 25% |
How Marginal Relief is worked out
Marginal Relief uses a standard fraction of 3/200. The relief equals 3/200 multiplied by the difference between the upper limit and your profits. Where the company has no dividends from non-group companies, the calculation is straightforward.
Relief = (£250,000 − taxable profits) × 3/200. Tax due = taxable profits × 25% − relief.
A worked example
A company with taxable profits of £100,000 would start at £25,000 of tax at the main rate. Marginal Relief is £150,000 × 3/200, which is £2,250, so the tax due is £22,750. That is an average rate of 22.75%.
One consequence worth knowing is that each extra pound of profit inside the band is taxed at 26.5%, which is higher than the main rate. That matters when you are deciding on the timing of a bonus, a pension contribution or a large purchase.
Associated companies and short periods
The £50,000 and £250,000 limits are shared between associated companies. If you control two companies, each one’s limits are halved to £25,000 and £125,000. The limits are also reduced proportionally when an accounting period is shorter than 12 months.
When the tax is due
For most small and medium companies, Corporation Tax is payable 9 months and 1 day after the end of the accounting period, while the CT600 return itself is due 12 months after the period ends. Larger companies pay in quarterly instalments.
Frequently Asked Questions
What is the UK Corporation Tax rate in 2026?
19% on profits up to £50,000, 25% on profits over £250,000, and the main rate less Marginal Relief in between.
What is the Marginal Relief fraction?
The standard fraction is 3/200, applied to the difference between the upper limit and your taxable profits.
Do associated companies share the thresholds?
Yes. The limits are divided by the number of associated companies, so two companies get £25,000 and £125,000 each.
Sources (4)Checked 26 October 2026
This guide is general information, not advice for your situation. Rules change, so check the official sources or talk to us before acting on it.