Corporation Tax Calculator 2026-27
Calculate your UK Corporation Tax. 25% main rate over £250k, 19% small profits under £50k, marginal relief 3/200 between. Updated 2026/27.
Source: GOV.UK — Corporation Tax rates
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Quick Answer
UK Corporation Tax in 2026/27: 19% Small Profits Rate on profits up to £50,000, 25% Main Rate above £250,000. Marginal Relief applies between (effective ~26.5% on the slice from £50k to £250k).
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
UK Corporation Tax is charged on company profits. The main rate is 25% for profits over £250,000. The small profits rate is 19% for profits up to £50,000. Marginal Relief applies for profits between £50,000 and £250,000, creating a gradual transition between the two rates.
The Marginal Relief fraction for 2026/27 is 3/200. This means companies in the marginal band pay an effective rate that rises gradually from 19% to 25% as profits increase from £50,000 to £250,000.
Associated companies share the thresholds. If your company has one associated company, the small profits threshold becomes £25,000 and the main threshold becomes £125,000.
Why Corporation Tax has TWO rates and a band between. Since April 2023, the Small Profits Rate is 19% on profits up to £50,000, and the Main Rate is 25% on profits above £250,000. Profits between £50,000 and £250,000 attract Marginal Relief, giving an effective rate of 26.5% on this slice (yes, higher than 25%). The relief tapers off so that at £250,000 exactly the effective rate becomes 25%. This creates a perverse incentive to either stay under £50k or accept the higher marginal rate.
Marginal Relief formula explained. The fraction is 3/200. For profits between £50,000 and £250,000: tax = (profits × 25%) − (upper limit − profits) × 3/200 × upper limit ÷ profits. For a company with £100,000 profit: tax = £25,000 − (£250,000 − £100,000) × 3/200 × 2.5 = £25,000 − £5,625 = £19,375 (effective 19.375%). Use the calculator to see the exact figure for your profit level.
Associated companies — why this matters for groups. The £50k/£250k bands are divided by the number of 'associated companies' in your control group. Two associated companies share £25k/£125k bands; three split £16,667/£83,333; and so on. This prevents tax avoidance by splitting a single business across multiple companies. 'Associated' includes companies controlled by the same person, family group, or spouse — even if they have no commercial relationship.
Practical Corporation Tax planning. Pension contributions are deductible (boost your pot AND cut Corporation Tax). Director's salary up to £12,570 PA is deductible (and tax-free for the director). Company-paid private medical insurance is deductible (but creates P11D benefit). R&D Tax Credits give 20% above-the-line credit. Annual Investment Allowance (£1m/year) gives 100% first-year relief on qualifying plant. Strategic timing of expenses around year-end can shift tax into Marginal Relief band or below.
Example: £120,000 profit, no associated companies
- Profit: £120,000 (within marginal band)
- Tax at main rate: £120,000 × 25% = £30,000
- Marginal Relief: (£250,000 − £120,000) × 3/200 = −£1,950
- Corporation Tax payable: £28,050
- Effective rate: 23.4%
Source: GOV.UK — Corporation Tax rates
Frequently Asked Questions
- UK Corporation Tax rates 2026/27.
- Small Profits Rate 19% on profits up to £50,000. Main Rate 25% on profits above £250,000. Marginal Relief on profits £50,000-£250,000 (effective 26.5% on this slice). Companies must file Corporation Tax return (CT600) within 12 months of accounting period end. Pay tax 9 months and 1 day after accounting period end. Large companies (profit £1.5m+): pay in quarterly instalments.
- Associated companies — why this matters.
- The £50k/£250k bands are divided by the number of 'associated companies' in your control group. Two associated companies share £25k/£125k bands; three split £16,667/£83,333. Prevents tax avoidance by splitting one business across multiple companies. 'Associated' includes companies controlled by the same person, family group, or spouse — even with no commercial relationship between them.
- Tax-deductible expenses for limited companies.
- Most business costs deductible against Corporation Tax: staff salaries (including director's salary up to PA), pension contributions (employer), rent, utilities, equipment via Capital Allowances or AIA £1m, software, insurance, professional fees, travel, marketing, R&D Tax Credits (20% above-the-line). Not deductible: dividends paid, fines/penalties, business entertaining (mostly), client gifts over £50, personal expenses.