UK Corporation Tax for 2025/26 has three bands: 19% Small Profits Rate (SPR) on augmented profits up to £50,000, 25% Main Rate on augmented profits above £250,000, and a tapered marginal rate between using the formula MR = (£250,000 − Augmented Profits) × (TTP ÷ Augmented Profits) × 3/200. Each associated company divides the £50k and £250k limits proportionately. The effective marginal rate in the £50k-£250k band is 26.5% per extra pound of profit. Close investment-holding companies (CIHCs) pay 25% on all profits regardless of size.
Corporation Tax Marginal Relief Calculator
Calculate corporation tax for accounting periods within the 2025/26 financial year.
1. UK Corporation Tax Rates for 2025/26
For accounting periods ending in the 2025/26 financial year (1 April 2025 to 31 March 2026), the UK operates a banded corporation tax structure reintroduced by Finance Act 2021 (commencing 1 April 2023 after the prior single flat 19% regime). The structure consists of three tiers governed by the company's "augmented profits" — its taxable total profits plus most exempt distributions received from non-group companies. The architecture is set out in Part 3A of the Corporation Tax Act 2010 (CTA 2010 ss.18A-18N), inserted by Schedule 1 of Finance Act 2021. The headline rates are unchanged from 2024/25 and are confirmed as continuing for 2026/27 in Budget documentation published by HM Treasury.
The Small Profits Rate (SPR) of 19% applies where augmented profits do not exceed the lower limit of £50,000. The Main Rate of 25% applies where augmented profits exceed the upper limit of £250,000. Between these two thresholds, Marginal Relief applies, producing a tapered effective rate that smooths the transition between the two flat regimes. Without marginal relief, a company earning £50,001 would pay 25% on the whole profit (£12,500) — a step-change cliff effect that would create perverse profit-management incentives. The relief mechanism, which dates back to the original Corporation Tax Act 1965 with refinements in successive Finance Acts, eliminates that cliff but introduces a steeper marginal rate of 26.5% across the £200,000 band.
2025/26 Corporation Tax Rates Table
| Profit Band | Rate | Mechanism | Effective Rate Range |
|---|---|---|---|
| £0 — £50,000 | 19% | Small Profits Rate | 19% flat |
| £50,001 — £250,000 | 25% less MR | Marginal Relief (3/200) | 19% → 25% taper |
| £250,001+ | 25% | Main Rate | 25% flat |
| Ring-fence (oil & gas) | 30% + Energy Profits Levy | Separate regime CTA 2010 s.279 | 30% + 35% EPL = 65% headline |
| Bank surcharge (above £100m) | +3% on profits above £100m | CTA 2010 Part 7A | 28% combined |
| CIHC (investment-holding close cos) | 25% | No SPR or MR per CTA 2010 s.18N(5) | 25% flat |
2. The Marginal Relief Formula Explained
The statutory formula for Marginal Relief is set out in CTA 2010 section 18N:
MR = (UL − AP) × (TTP ÷ AP) × F
where:
- UL = Upper Limit (£250,000 for 2025/26, time-apportioned for short periods, divided by number of associated companies plus one)
- AP = Augmented Profits (taxable total profits plus exempt ABGH distributions, defined in CTA 2010 s.18L)
- TTP = Taxable Total Profits (CT600 box 305)
- F = Standard Fraction = 3/200 = 0.015 = 1.5%
The final corporation tax payable is then:
CT = (TTP × 25%) − MR
The (TTP ÷ AP) ratio scales the relief in proportion to taxable profits where the company also has exempt distributions. For standalone companies without group dividends, TTP and AP are equal so the ratio is 1. For most owner-managed businesses without intra-group structures, the simplified formula is: MR = (£250,000 − Profits) × 3/200.
3. Five Worked Examples Across the Marginal Band
The following worked examples assume a single company with no associates and a full 12-month accounting period within FY2025/26. Augmented Profits equal Taxable Total Profits in every case (no exempt distributions).
Example 1: £75,000 Profit
Gross CT at 25% = £18,750.
Marginal Relief = (£250,000 − £75,000) × (75,000 ÷ 75,000) × 3/200 = £175,000 × 1 × 0.015 = £2,625.
Corporation Tax payable = £18,750 − £2,625 = £16,125.
Effective rate = 21.5%.
Compared to flat 19% (£14,250) the company pays £1,875 more for being above the SPR threshold; compared to flat 25% (£18,750) saves £2,625.
Example 2: £100,000 Profit
Gross CT at 25% = £25,000.
Marginal Relief = (£250,000 − £100,000) × 1 × 3/200 = £150,000 × 0.015 = £2,250.
Corporation Tax payable = £25,000 − £2,250 = £22,750.
Effective rate = 22.75%.
Example 3: £150,000 Profit
Gross CT at 25% = £37,500.
Marginal Relief = (£250,000 − £150,000) × 1 × 3/200 = £100,000 × 0.015 = £1,500.
Corporation Tax payable = £37,500 − £1,500 = £36,000.
Effective rate = 24.0%.
Example 4: £200,000 Profit
Gross CT at 25% = £50,000.
Marginal Relief = (£250,000 − £200,000) × 1 × 3/200 = £50,000 × 0.015 = £750.
Corporation Tax payable = £50,000 − £750 = £49,250.
Effective rate = 24.625%.
Example 5: £250,000 Profit (at boundary)
Gross CT at 25% = £62,500.
Marginal Relief = (£250,000 − £250,000) × 1 × 3/200 = £0 × 0.015 = £0.
Corporation Tax payable = £62,500.
Effective rate = 25.0% (the main rate applies precisely at the boundary, no relief remaining).
Effective Rate Comparison Table
| Profit | Gross CT (25%) | Marginal Relief | Net CT | Effective Rate | Marginal £ Cost |
|---|---|---|---|---|---|
| £50,000 | £12,500 | £3,000 | £9,500 | 19.00% | — |
| £75,000 | £18,750 | £2,625 | £16,125 | 21.50% | 26.50% on extra £25k |
| £100,000 | £25,000 | £2,250 | £22,750 | 22.75% | 26.50% |
| £125,000 | £31,250 | £1,875 | £29,375 | 23.50% | 26.50% |
| £150,000 | £37,500 | £1,500 | £36,000 | 24.00% | 26.50% |
| £175,000 | £43,750 | £1,125 | £42,625 | 24.36% | 26.50% |
| £200,000 | £50,000 | £750 | £49,250 | 24.625% | 26.50% |
| £225,000 | £56,250 | £375 | £55,875 | 24.83% | 26.50% |
| £250,000 | £62,500 | £0 | £62,500 | 25.00% | 26.50% |
| £300,000 | £75,000 | £0 | £75,000 | 25.00% | 25.00% (back to flat) |
4. Associated Companies — The £50k and £250k Threshold Division
Where a company has one or more "associated companies", the £50,000 lower limit and £250,000 upper limit are divided by the total number of related 51% group companies — including the company being assessed itself. The statutory basis is CTA 2010 ss.18D-18F. The rules were significantly reformed from 1 April 2023 by Finance Act 2021, reverting from the post-2015 simplified 75% related-companies test back to the broader substantial commercial interdependence test.
Two companies are associated if one controls the other, or both are under the control of the same person/persons. Control follows CTA 2010 s.450 tests (voting power, dividend rights, distribution of capital on winding up). Companies are aggregated for testing where they exhibit "substantial commercial interdependence" — economic (common customers), financial (cross-financing), or organisational (shared management/staff/premises).
Examples of how thresholds change:
| Number of Associated Companies | Lower Limit (each) | Upper Limit (each) | Effective Marginal Band |
|---|---|---|---|
| 0 associates (standalone) | £50,000 | £250,000 | £200,000 |
| 1 associate (2 total) | £25,000 | £125,000 | £100,000 |
| 2 associates (3 total) | £16,667 | £83,333 | £66,666 |
| 3 associates (4 total) | £12,500 | £62,500 | £50,000 |
| 4 associates (5 total) | £10,000 | £50,000 | £40,000 |
| 9 associates (10 total) | £5,000 | £25,000 | £20,000 |
This has profound consequences for group structures. Three sister companies each making £80,000 — total group profit £240,000 — face thresholds of £16,667 and £83,333 each. Each company is in the marginal band, with gross CT £20,000 less MR of (£83,333 − £80,000) × 1 × 3/200 = £50 each, giving net CT £19,950 per company or £59,850 group total. If those three companies were merged into one with £240,000 profit, the standalone thresholds £50,000/£250,000 apply, marginal relief = (£250,000 − £240,000) × 0.015 = £150, net CT = £60,000 − £150 = £59,850. Identical result — but consolidation increases compliance simplicity.
Excluded Associates
Several categories are excluded from the associated company count by CTA 2010 ss.18E and 18F:
- Dormant companies (no significant activity at any point in the accounting period).
- Passive holding companies meeting strict conditions: only function is to hold shares in 51% subsidiaries, no business activity, no income beyond capital receipts.
- Companies under control of persons with no substantial commercial interdependence — applies the long-standing case law (Brown v IRC [1965]; Hyster-Yale UK [1991]) on group control vs aggregate ownership.
- Non-UK incorporated companies with no UK presence are counted only if they would themselves be subject to UK CT.
5. Augmented Profits — Including Exempt Distributions
Augmented Profits, defined in CTA 2010 s.18L, equal the company's Taxable Total Profits (TTP) plus most exempt distributions received from companies that are NOT 51% group members. The mechanism prevents companies from artificially fragmenting profits by routing dividends through small subsidiaries to access the small profits rate on each layer.
Exempt distributions include:
- Dividends from non-51% UK-resident subsidiaries (and most foreign equivalents post-2009).
- Distributions from non-group portfolio investments.
- Dividends received from investments below the 10% controlled-foreign-company threshold.
NOT included in augmented profits:
- Dividends from 51% group companies (these stay within the group for CT purposes).
- Distributions from REITs (already taxed at source under PID regime).
- Stock dividends and certain return-of-capital distributions.
Worked example: Company A makes £80,000 trading profit (TTP £80,000) and receives £20,000 dividend from a 5% holding in another UK company. Augmented Profits = £100,000. The lower limit £50k is exceeded, the upper limit £250k is not — so marginal relief applies. MR = (£250,000 − £100,000) × (80,000 ÷ 100,000) × 3/200 = £150,000 × 0.8 × 0.015 = £1,800. Gross CT on the £80k TTP at 25% = £20,000. Net CT = £20,000 − £1,800 = £18,200, effective 22.75% on the trading profit (same effective rate as standalone £100k example, but only £80k actually taxed).
6. Short Accounting Periods
For accounting periods shorter than 12 months — common for new incorporations, dissolutions, or year-end changes — the £50,000 lower limit and £250,000 upper limit are reduced proportionately. CTA 2010 s.18B(2) provides time apportionment: limit × (months in period ÷ 12).
| Period Length | Lower Limit | Upper Limit | Marginal Band Size |
|---|---|---|---|
| 3 months | £12,500 | £62,500 | £50,000 |
| 6 months | £25,000 | £125,000 | £100,000 |
| 9 months | £37,500 | £187,500 | £150,000 |
| 12 months (standard) | £50,000 | £250,000 | £200,000 |
| 18 months (max) | £75,000 | £375,000 | £300,000 |
HMRC requires accounting periods to be no longer than 12 months for corporation tax — periods over 12 months must be split, with the first 12 months as one CT600 and the remaining months as a second period (with thresholds based on the second period's length).
7. Periods Straddling 1 April 2023
For accounting periods that straddle 1 April 2023 (the date marginal relief was reintroduced), the period is split into two notional periods and taxed under the rules applicable to each. The pre-1 April 2023 portion uses the previous flat 19% rate; the post-1 April 2023 portion uses the new banded structure. Although the bulk of UK companies have now passed this transition entirely, some long-period restructurings may still trigger split calculations in 2025/26 — particularly for groups going through demergers or reorganisations.
HMRC Split-Period Worked Example
Company X has a 12-month accounting period from 1 January 2023 to 31 December 2023, with annual profits of £100,000. Pre-1 April portion: 3 months → time-apportioned profits £25,000 at flat 19% = £4,750. Post-1 April portion: 9 months → time-apportioned profits £75,000, with thresholds of £37,500 lower and £187,500 upper. £75,000 falls in marginal band: MR = (£187,500 − £75,000) × 1 × 3/200 = £1,687.50; gross CT £18,750; net CT £17,062.50. Total CT for full period = £4,750 + £17,062.50 = £21,812.50.
8. Close Investment-Holding Companies (CIHCs)
Close Investment-Holding Companies are excluded from the small profits rate and marginal relief — they pay the main rate of 25% on all profits regardless of size. This restriction was reintroduced by Finance Act 2021 alongside marginal relief, mirroring the pre-2015 regime. The statutory definition is in CTA 2010 s.34:
A CIHC is a close company whose business consists wholly or mainly of:
- Making investments (property letting, share holdings, IP licensing without trade).
- Dealing in land, securities or other investments where the activity is not a trade.
- Making loans or investments to connected persons.
A company is NOT a CIHC where it:
- Carries on a genuine trade as its main activity.
- Holds investments in 51% trading subsidiaries (a holding company of trading subs).
- Is a property investment company carrying on a commercial property letting business with active management (extensive HMRC case law: American Leaf Blending Co Sdn Bhd v DGIR (Malaysia) [1979]; Salisbury House Estate v Fry [1930]; recent Elizabeth Moyne Ramsay v HMRC [2013]).
The CIHC classification is self-assessed on the CT600 return. Misclassification triggers HMRC enquiry and potentially significant tax adjustments plus interest. Specialist advice is essential for borderline cases — particularly buy-to-let portfolios held in companies with passive management.
9. Ring-Fence Profits — Oil and Gas Companies
UK upstream oil and gas extraction profits are taxed under a separate "ring-fence" regime at 30% corporation tax (CTA 2010 s.279), plus a 10% Supplementary Charge (SC), plus the Energy Profits Levy of 35% (from November 2022). The combined headline rate on ring-fence profits is therefore 75% (30 + 10 + 35), among the highest globally. Marginal relief does not apply to ring-fence trades; the small profits rate is also unavailable. Companies with both ring-fence and other activities must allocate profits between the regimes.
10. Bank Surcharge
Banking companies pay an additional 3% surcharge on profits exceeding £100 million per CTA 2010 Part 7A. This was reduced from 8% in Finance Act 2022 to reflect the increase in the main CT rate to 25% (avoiding a combined rate above 33%). The £100m exemption threshold is divided between members of a banking group. The combined effective rate on bank profits above £100m is therefore 28% (25% CT + 3% surcharge).
11. Loss Relief and Marginal Relief Interaction
Trading losses can be set against profits of the same period (s.37 CTA 2010), carried back to the prior 12 months (or 36 months for terminal losses), or carried forward indefinitely against future trading profits (s.45-45F CTA 2010, with carried-forward losses post-2017 subject to the £5m group deductions allowance and 50% restriction above that). Loss relief reduces Taxable Total Profits — which feeds directly into the marginal relief formula.
Worked example: Company had £100,000 trading profit and £30,000 brought-forward losses. After loss relief, TTP = £70,000. Marginal relief = (£250,000 − £70,000) × 1 × 3/200 = £2,700. Gross CT £17,500. Net CT £14,800. Without loss relief, CT would have been £22,750 — total tax saving from £30,000 loss = £7,950 (an effective relief rate of 26.5%, matching the marginal effective rate of the band).
12. Group Relief and Marginal Relief
Group relief allows trading losses to be surrendered between members of a 75% group (CTA 2010 Part 5). Each group member calculates its marginal relief separately based on its own augmented profits — surrendered losses simply reduce the recipient's TTP. This can be highly tax-efficient: surrendering £50,000 of losses to a company at £100,000 profit (in marginal band, 26.5% effective marginal rate) saves £13,250 of CT, vs surrendering to a company at £300,000 profit (saving only 25% × £50,000 = £12,500). Tax planning typically directs losses to whichever group member has the highest effective marginal rate.
13. R&D Tax Relief Under the Merged Scheme
From accounting periods beginning on or after 1 April 2024, the SME R&D relief and Research and Development Expenditure Credit (RDEC) were merged into a single 20% above-the-line credit (and a 27% Enhanced R&D Intensive Support rate for loss-making R&D-intensive SMEs). The credit is paid as a taxable receipt and added back to profits — increasing TTP and potentially pushing companies into the marginal band. Combined with the new 25% CT rate, the net cash benefit per £1 of qualifying R&D expenditure is approximately 15p for profitable claimants — significantly less than the previous SME regime's 21.5p.
14. Patent Box and Marginal Relief
The Patent Box regime (CTA 2010 Part 8A) allows qualifying intellectual property income to be taxed at an effective 10% rate. Patent Box deductions reduce TTP for marginal relief purposes — so a company with £200,000 profit including £100,000 patent box income would have effective TTP of approximately £160,000 (after the patent box reduction), placing it lower in the marginal band. Combining R&D and Patent Box can substantially reduce effective rates for innovation-led businesses.
15. Payment Deadlines and Instalments
For companies with taxable profits below £1.5 million (the "non-large" threshold, divided by associated companies), corporation tax is payable 9 months and 1 day after the end of the accounting period. CT600 must be filed within 12 months of period end.
For "large" companies (taxable profits £1.5m to £20m), quarterly instalments apply under the Corporation Tax (Instalment Payments) Regulations 1998 — first instalment 6 months and 13 days after period start, then quarterly. For "very large" companies (profits over £20m), accelerated quarterly instalments apply, with the first payment 2 months and 13 days after period start.
Late payment interest accrues at HMRC's prevailing rate — currently 7.75% (Base Rate + 2.5%) from August 2025. Underpayment interest typically begins from the due date; overpayment interest accrues from the relevant 9-month due date at Base Rate − 1% (currently 4.0%).
16. CT600 Return Completion
The CT600 corporation tax return for periods within FY2025/26 requires completion of the following boxes relevant to marginal relief:
- Box 305: Taxable Total Profits (TTP) — after all reliefs and deductions.
- Box 326: Augmented Profits — TTP plus exempt ABGH distributions.
- Box 329: Number of associated companies during the accounting period.
- Box 332: Lower Limit (£50,000 ÷ (associates+1) × period/12).
- Box 335: Upper Limit (£250,000 ÷ (associates+1) × period/12).
- Box 425: Marginal Relief amount.
- Box 430: Corporation Tax payable (Box 305 × 25% − Box 425).
HMRC's online filing system and commercial CT600 software (TaxCalc, Iris, Sage etc.) automatically populate the boxes once underlying figures are entered. iXBRL-tagged accounts and computations must accompany every CT600 — a mandatory requirement since April 2011 under Schedule 18 FA 1998.
17. Anti-Avoidance: Profit Fragmentation
HMRC actively challenges arrangements designed to access multiple small profits rates through artificial company splitting. Key anti-avoidance measures include:
- Associated company rules (CTA 2010 ss.18D-18F) — substantial commercial interdependence test catches profit-fragmentation structures.
- GAAR (general anti-abuse rule, Finance Act 2013) — counters egregious tax-avoidance schemes including unjustified profit shifting.
- Transfer pricing (TIOPA 2010 Part 4) — requires intra-group transactions at arm's length, preventing artificial profit shifting between connected entities.
- Targeted anti-avoidance rules (TAAR) — specific provisions for management service company arrangements, IR35-style schemes, and director-shareholder remuneration optimisation.
18. Comparison to Pre-2023 Single Rate Regime
Between April 2015 and March 2023, the UK operated a single flat corporation tax rate (originally 20%, reducing to 19% from April 2017). The banded structure with marginal relief was abolished by Finance Act 2014 to "simplify" the regime and was reintroduced by Finance Act 2021 alongside the 25% main rate. The political rationale: protect small businesses from a six-percentage-point rate hike while raising substantial revenue from large companies. HMRC's most recent published statistics (2023/24) show approximately 2.0 million CT600 returns filed annually, with approximately 70% at SPR, 15% in the marginal band, and 15% at the main rate — confirming the SPR remains the dominant rate by company count, while the main rate generates the largest share of total CT yield.
19. Planning Strategies for Marginal Band Companies
Companies expecting to fall just above the £250,000 upper limit may consider several tax-efficient strategies to keep profits within the marginal band, where the effective average rate remains below 25%:
- Employer pension contributions — fully deductible at the 26.5% marginal rate (vs 25% main rate), significantly tax-efficient for owner-directors approaching retirement.
- Year-end bonuses — accruing director bonuses to align with capital allowance claims. Coordinate with employee NI (15.05% from 2026) and income tax bands.
- Capital allowances optimisation — full expensing (100% first-year allowance on main-rate plant since April 2023, now permanent), Annual Investment Allowance £1m per year.
- R&D tax credits — under the merged scheme, qualifying R&D enhances cash returns.
- Patent Box — 10% effective rate on qualifying IP income; reduces marginal-band exposure.
- Loss carry-forward planning — reserve losses to set against future-period profits in the marginal band rather than at the main rate.
- Group structure review — minimise unnecessary associated companies that fragment limits.
20. Source Authority and Further Reading
- GOV.UK — Corporation Tax rates and allowances
- GOV.UK — Corporation Tax rates from 1 April 2023
- GOV.UK — Small Profits Rate & Marginal Relief policy paper
- GOV.UK — Marginal Relief Calculator (official)
- HMRC Company Taxation Manual (CTM full)
- HMRC CTM03960 — Marginal relief: calculation
- HMRC CTM03900 — Small profits rate and marginal relief
- HMRC CTM03950 — Associated companies rules
- GOV.UK — CT rate changes overview
- UK Legislation — Corporation Tax Act 2010
- UK Legislation — Finance Act 2021
- ICAEW — Corporation Tax technical hub
- ACCA — Corporation tax rates and marginal relief guide
- CIOT — Chartered Institute of Taxation
- HMRC — HM Revenue & Customs main page
- GOV.UK — File Company Accounts & Tax Return
- OBR — Office for Budget Responsibility CT forecasts
21. Related Calculators on UK Calculator
- Corporation Tax Calculator
- Corporation Tax Calculator UK
- Dividend Tax Calculator
- Director's Loan Account Calculator
- R&D Tax Relief Calculator
- Employer's NI Calculator
- Salary vs Dividend Calculator
- Limited Company Tax Calculator
- Take-Home Pay Calculator
- VAT Calculator
- Business Property Relief Calculator
- Inheritance Tax Mitigation Calculator
22. Frequently Asked Questions
What is the UK corporation tax rate for 2025/26?
Three bands: 19% Small Profits Rate up to £50,000; 25% Main Rate above £250,000; tapered marginal relief between, using the 3/200 standard fraction. Re-introduced by Finance Act 2021 effective 1 April 2023, unchanged for 2025/26 and confirmed for 2026/27.
How is corporation tax marginal relief calculated?
Formula (CTA 2010 s.18N): MR = (Upper Limit − Augmented Profits) × (TTP ÷ Augmented Profits) × 3/200. For 2025/26, UL = £250,000 and the standard fraction is 3/200 (1.5%). Subtract MR from gross CT (TTP × 25%) for net tax payable.
What are augmented profits for marginal relief?
Augmented profits (CTA 2010 s.18L) = Taxable Total Profits + exempt ABGH distributions (dividends from non-51% group companies). Thresholds £50k and £250k apply to augmented profits, not raw trading profit — preventing fragmentation through dividend routing.
How do associated companies affect corporation tax thresholds?
The £50k and £250k limits divide by total related companies (CTA 2010 s.18D). Two associates → £25k and £125k each. Test from 1 April 2023 is substantial commercial interdependence (s.27 CTA 2010). Dormant and passive holding companies excluded.
What is the 26.5% marginal rate?
The effective marginal rate on each additional £1 of profit in the £50k-£250k band is 26.5% — higher than the main rate. Each extra £1 costs 25p CT + reduces MR by 1.5p (3/200) = 26.5p. Returns to flat 25% above £250k.
How do short accounting periods affect marginal relief?
Thresholds reduced proportionately: 6-month period → £25k and £125k; 9-month period → £37,500 and £187,500. CTA 2010 s.18B(2) time-apportions. Accounting periods cannot exceed 12 months for CT — periods over 12m are split.
What is the standard fraction for corporation tax?
3/200 = 0.015 = 1.5% for 2025/26. Derived from (Main Rate − SPR) ÷ (Upper Limit − Lower Limit) × scale factor. Set in CTA 2010 s.18N(2). Would change if either rates or limits change.
Do close investment companies get marginal relief?
No. Close Investment-Holding Companies (CIHCs, defined CTA 2010 s.34) pay 25% flat on all profits — no SPR, no marginal relief. CIHCs are close companies wholly/mainly making investments without active trade. Buy-to-let portfolios with passive management often qualify as CIHCs.
How do non-resident companies handle marginal relief?
Non-resident companies with UK permanent establishments or UK property income get the same banded rates and marginal relief, per CTA 2010 Part 3A. Limits divided by all associates (UK and overseas). Specialist advice recommended for cross-border groups.
What is the effective tax rate at £100,000 profit?
Single company, no associates: £100k profit × 25% = £25,000 gross CT. MR = (£250k − £100k) × 1 × 3/200 = £2,250. Net CT £22,750. Effective rate 22.75%. At £150k it's 24%; at £200k it's 24.625%; at £250k it's the full 25%.
How does CT600 handle marginal relief?
Boxes 305 (TTP), 326 (AP), 329 (associates), 332/335 (limits), 425 (MR), 430 (CT payable). HMRC's online filing and commercial software auto-calculate. Filing deadline: 12 months after period end; payment: 9 months and 1 day after period end (instalments above £1.5m).
Can I reduce my corporation tax via pension contributions?
Yes — employer pension contributions fully deductible (CTA 2009 s.196) subject to "wholly and exclusively" and spreading rules. Highly tax-efficient at the 26.5% marginal rate. Coordinate with director's personal annual allowance (£60k from 2023/24, tapered for high earners).
What is the corporation tax instalment payment regime?
Profits above £1.5m (apportioned for associates and short periods) trigger quarterly instalments. "Large" companies under £20m start first payment 6 months 13 days after period start. "Very large" above £20m start 2 months 13 days after start. Interest at 7.75% (Aug 2025) on late instalments.
How does the 25% main rate compare globally?
UK 25% sits at the G7 average. Ireland 12.5%, Hungary 9%, France 25.83%, Germany 29.83%, Japan 29.74%, USA 21% federal. UK rate competitive vs major EU peers. OECD Pillar Two 15% minimum applies from Dec 2023 for multinational groups above €750m revenue.
Do I need to file CT600 if there is no tax due?
Yes — all active UK-resident companies (and most non-resident with UK income) must file CT600 every accounting period, even at nil tax. Dormant companies with HMRC notification exempted. Late penalties: £100 → £100 → 10% of tax (6m) → +10% (12m). Online filing mandatory with iXBRL accounts.
About this calculator
Last updated 2026-05-25 by Mustafa Bilgic, independent operator of UK Calculator. Calculations are aligned with the Corporation Tax Act 2010 (as amended by Finance Act 2021), HMRC's Company Taxation Manual, and the official GOV.UK Marginal Relief Calculator. Worked examples cross-checked against HMRC's CT600 calculation guidance. This is for guidance only; consult an ACA/ACCA/CTA qualified accountant or chartered tax adviser for company-specific corporation tax decisions, particularly involving group structures, R&D claims, Patent Box, or international transactions.