Corporation tax rates 2026/27
For the financial year starting 1 April 2026, the rates are unchanged from the last three years:
| Profits | Rate |
|---|---|
| £50,000 or less | 19% (small profits rate) |
| £50,001 to £250,000 | 25%, reduced by marginal relief |
| Over £250,000 | 25% (main rate) |
Between £50,000 and £250,000 the tax rises gradually from 19% to 25% of the whole profit. That works out as 26.5% on each extra pound of profit in this band, which is worth knowing when you decide how much salary, pension or dividends to take.
How marginal relief works
If profits are between the two limits, you work out tax at 25% and then take off marginal relief:
marginal relief = 3/200 × (upper limit − augmented profits) × (taxable profits ÷ augmented profits)
For most small companies with no dividend income, taxable profits and augmented profits are the same, so the last part is just 1.
Worked examples
£40,000 profit
Below £50,000, so 19%: £7,600.
£100,000 profit
25% of £100,000 is £25,000. Marginal relief is 3/200 × (£250,000 − £100,000) = £2,250. Tax: £22,750, an effective rate of 22.75%.
£300,000 profit
Above £250,000, so 25% on the lot: £75,000.
Associated companies and short periods
The £50,000 and £250,000 limits are shared between associated companies, which usually means companies controlled by the same person or group. With one associated company, each company's limits become £25,000 and £125,000. With two, they're £16,667 and £83,333. Dormant companies don't count.
If your accounting period is shorter than 12 months, the limits are cut proportionally. A 6-month period has limits of £25,000 and £125,000.
When corporation tax is due
- Payment: 9 months and 1 day after the end of your accounting period. Large companies with profits over £1.5 million pay in quarterly instalments.
- Return (CT600): 12 months after the end of the accounting period.
- Paying yourself: dividends come out of profit after corporation tax and are then taxed on you personally. Use the dividend tax calculator and the take-home pay calculator to compare salary and dividends.
- Pension contributions paid by the company are usually an allowable expense, so they reduce taxable profits. At 26.5% in the marginal band, that's an effective saving.
Frequently asked questions
What is the corporation tax rate for 2026/27?
The main rate is 25% for profits over £250,000. The small profits rate is 19% for profits of £50,000 or less. In between, you pay 25% reduced by marginal relief.
How much corporation tax do I pay on £100,000 profit?
£22,750. That's 25% (£25,000) minus marginal relief of £2,250.
What is the marginal rate of corporation tax?
For profits between £50,000 and £250,000, each extra pound of profit is taxed at 26.5% once marginal relief is taken into account.
What are associated companies?
Companies under the same control, such as two companies owned by the same director. The £50,000 and £250,000 limits are divided between them.
When do I have to pay corporation tax?
Most companies pay 9 months and 1 day after the end of their accounting period. The company tax return is due 12 months after the period ends.
Last reviewed October 2026 using 2026/27 figures. This calculator gives an estimate for guidance only.