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CORPORATION TAX / FY2026 / UK

Corporation Tax calculator

Work out UK Corporation Tax for financial year 2026: the 19% small profits rate, the 25% main rate and Marginal Relief in between, with associated companies and short periods.

Last verified: Methodology

Your details

01Company

Companies under common control. The limits are divided by this number plus one.

Corporation Tax

£22,750

Main rate (25%) with Marginal Relief · 22.75% effective

Effective rate
22.75%
Marginal Relief
£2,250.00
Profit after tax
£77,250
Augmented profits
£100,000
Lower limit used
£50,000
Upper limit used
£250,000
  • Limits used: £50,000 and £250,000 (adjusted for associated companies and a short accounting period).
  • Marginal Relief = 3/200 × (£250,000 − £100,000) × profits ÷ augmented profits = £2,250.00. Profits in this range are effectively taxed at 26.5% at the margin.
  • Rates for the financial year starting 1 April 2026. An accounting period spanning two financial years uses the rates for each, which are the same in 2025 and 2026.
  • HMRC strictly reduces the limits by days in a short period; months are used here. Ring fence (oil and gas) profits and close investment-holding companies are not covered.

Corporation Tax: £22,750 Main rate (25%) with Marginal Relief · 22.75% effective

Corporation Tax, financial year 2026
LineAmount
Taxable profits£100,000.00
Corporation Tax at 25%£25,000.00
Less Marginal Relief−£2,250.00
Corporation Tax£22,750.00
Profit after tax£77,250.00
Profit split
77%TAKE-HOME
  • Profit after tax£77,25077%
  • Corporation Tax£22,75023%

£22,750

Main rate (25%) with Marginal Relief · 22.75% effective

How it's calculated

For the financial year starting 1 April 2026, Corporation Tax depends on the size of the company's profits:HMRC

  • Small profits rate: 19% if profits are £50,000 or less.
  • Main rate: 25% if profits are over £250,000.
  • Marginal Relief in between: tax at the main rate, reduced by a relief that shrinks as profits rise, using the standard fraction of 3/200.

The two limits are divided by the number of associated companies plus one, and reduced in proportion for an accounting period shorter than 12 months.GOV.UK The rate is decided by augmented profits: taxable profits plus exempt dividends received from companies outside your 51% group.

The formula

HMRC's Company Taxation Manual gives the relief as:HMRC

Marginal Relief = F × (U − A) × N ÷ A

where F is the standard fraction (3/200), U the upper limit, A augmented profits and N taxable total profits. Corporation Tax = N × 25% − Marginal Relief. Between the limits each extra pound of profit is taxed at 26.5%, which is why the effective rate climbs smoothly from 19% to 25%.

Worked example

HMRC's own example: profits of £90,000 and £8,000 of exempt distributions give Marginal Relief of £2,094 and Corporation Tax of £20,406. The calculator gives £20,406.12.

A company with £100,000 of profit and no associated companies pays £22,750.00, an effective rate of 22.75%.

£100,000 profit, 12-month periodCORPORATION TAX / FY2026 / UK
LineAmount
Taxable profits£100,000.00
Corporation Tax at 25%£25,000.00
Less Marginal Relief-£2,250.00
Corporation Tax£22,750.00
Profit after tax£77,250.00

With one associated company the limits halve, and the same profit costs £24,625.00.

£55,000 profit, 9-month accounting period (HMRC CTM03930)CORPORATION TAX / FY2026 / UK
LineAmount
Taxable profits£55,000.00
Corporation Tax at 25%£13,750.00
Less Marginal Relief-£1,987.50
Corporation Tax£11,762.50
Profit after tax£43,237.50

Assumptions and limitations

  • Enter taxable total profits: accounting profit after adjustments such as capital allowances and disallowed expenses (for example client entertaining).
  • Short periods are scaled by months; HMRC strictly uses days, which can differ by a few pounds.
  • Ring fence profits from oil and gas, close investment-holding companies and non-UK resident companies are not covered.
  • One financial year's rates are used. They are the same for financial years 2023 to 2026, so a period spanning 1 April 2026 gives the same result.
FAQ

Questions people ask

What is the Corporation Tax rate for 2026?

For the financial year starting 1 April 2026 the main rate is 25% for companies with profits over £250,000 and the small profits rate is 19% for profits of £50,000 or less. Companies with profits in between pay the main rate reduced by Marginal Relief, so their effective rate is somewhere between 19% and 25%. These rates and limits are the same as in the previous three financial years.

How does Marginal Relief work?

Marginal Relief smooths the step from 19% to 25%. You work out tax at 25% on the whole profit and then subtract 3/200 of the gap between the upper limit and your augmented profits, scaled by taxable profits over augmented profits. The relief is largest just above £50,000 and falls to nothing at £250,000. On the slice of profit between the limits the marginal rate is 26.5%.

What are associated companies?

Companies are associated if one controls the other or both are under the control of the same person or group of people. The £50,000 and £250,000 limits are shared between them, so they are divided by the number of associated companies plus one. A company with three associated companies, for example, has limits of £12,500 and £62,500 for Marginal Relief.

What if my accounting period is shorter than a year?

The lower and upper limits are reduced in proportion to the length of the period. For a nine-month period they are three-quarters of the full-year figures. HMRC's guidance says the reduction should strictly be worked out using days rather than months. If an accounting period spans two financial years with different rates, the profit is split between them by days.

What are augmented profits?

Augmented profits are your taxable total profits plus any exempt distributions, mainly dividends, received from companies that are not in your 51% group. They are not taxed, but they count when deciding whether the company is under the lower limit, between the limits or over the upper limit, which can raise the rate charged on the taxable profit.

Can a limited company deduct all its expenses?

Only revenue costs incurred for a business purpose can be deducted when working out taxable profit, such as an accountant's fees. Capital spending, such as buying equipment or vehicles, is not deductible directly, though capital allowances may be claimed on it. Some costs are specifically disallowed, for example entertaining clients. Enter the profit after these adjustments into the calculator.

Sources

  1. HMRCCorporation Tax rates and allowances · retrieved 2026-10-16
  2. HMRCCTM03925: Small profits rate: marginal relief (financial year 2023 onwards) · retrieved 2026-10-16
  3. GOV.UKMarginal Relief for Corporation Tax · retrieved 2026-10-16

Last verified: CalcBloc Editorial Team