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Corporation Tax Calculator 2026/27

Estimate your limited company’s corporation tax liability. Covers the small profits rate (19%), main rate (25%), and marginal relief for profits between £50,000 and £250,000.

UK Corporation Tax Rates for 2026/27

Since April 2023, UK corporation tax has operated on a two-rate system. Small companies with profits up to £50,000 pay the small profits rate of 19%, while larger companies with profits of £250,000 or more pay the main rate of 25%. Companies that fall between these two limits benefit from marginal relief, which tapers the effective rate between the two.

The marginal relief calculation produces an interesting quirk: the marginal rate on profits within the £50,000–£250,000 band is actually 26.5%, higher than the headline 25% main rate. This means it can sometimes be worth considering whether to bring forward deductible costs or defer income to stay within the small profits band.

2026/27 Corporation Tax Rate Table

Profit bandRate nameEffective rate
Up to £50,000Small profits rate19%
£50,001 – £249,999Marginal relief19% – 25% (26.5% marginal)
£250,000 and aboveMain rate25%

How to Reduce Your Corporation Tax Bill

There are several legitimate ways to reduce your company’s corporation tax liability. Paying yourself a salary reduces your company’s taxable profit (though you’ll pay income tax and National Insurance on the salary). Similarly, employer pension contributions made directly from the company are fully deductible and are one of the most tax-efficient ways to extract money from a limited company.

If your company qualifies for R&D tax relief, this can provide significant savings — SMEs can deduct 186% of qualifying R&D costs under the enhanced scheme. Capital allowances let you deduct the cost of business assets (equipment, vehicles) faster than standard depreciation, reducing profits in the year of purchase.

For a comprehensive view of whether to take salary vs dividends — and how corporation tax interacts with your personal tax position — use our Salary vs Dividends Calculator.

Frequently Asked Questions

What is the UK corporation tax rate for 2026/27?
There are two main rates for 2026/27. The small profits rate is 19% and applies to companies with annual profits up to £50,000. The main rate is 25% and applies to profits of £250,000 or more. Companies with profits between these thresholds benefit from marginal relief, giving an effective rate that tapers between 19% and 25%.
What is marginal relief and how is it calculated?
Marginal relief applies when your company's taxable profits fall between £50,000 and £250,000. It reduces the corporation tax otherwise due at the 25% main rate. The formula is: Corporation Tax = (profit × 25%) − ((£250,000 − profit) × 3/200). This produces an effective rate that gradually increases from 19% to 25% across the marginal relief band, with a marginal rate of 26.5% on profits within this range.
What counts as taxable profit for corporation tax?
Your company's taxable profit (also called 'Corporation Tax profit') is your accounting profit adjusted for tax purposes. You add back any disallowable expenses (such as entertaining clients or depreciation), then deduct capital allowances (instead of depreciation), and apply any other reliefs such as R&D tax credits or losses carried forward. Directors' salaries and employer pension contributions are allowable deductions and reduce your taxable profit before corporation tax is calculated.
Does the £50,000 threshold apply per company or per group?
The £50,000 small profits limit and £250,000 main rate limit are divided by the number of 'associated companies' a business has. For example, if you own two companies that are associated with each other, each company's small profits limit is reduced to £25,000 and the main rate limit to £125,000. Two companies are associated if one controls the other, or both are under common control. This means directors who run multiple companies need to take care — the marginal relief band can shift significantly.
When do I need to pay corporation tax?
For small companies (those not 'large'), corporation tax is due 9 months and 1 day after the end of your accounting period. So if your year end is 31 March 2026, your corporation tax is due by 1 January 2027. Large companies (profits over £1.5 million) pay corporation tax in quarterly instalments during the accounting period itself. You must also file a Company Tax Return (CT600) with HMRC within 12 months of your accounting period end, even if your tax is already paid.