What is the UK corporation tax rate for 2025/26?

Profits up to £50,000 are taxed at the 19% small-profits rate, profits over £250,000 at the 25% main rate, and profits in between get marginal relief that gradually raises the effective rate from 19% toward 25%.

How does marginal relief work?

Between £50,000 and £250,000, tax is calculated at 25% and then reduced by marginal relief of 3/200 × (£250,000 − profit). This smooths the jump from 19% to 25%, giving an effective marginal rate of about 26.5% on profits in the band.

How much corporation tax on £120,000 profit?

At £120,000 you are in the marginal relief band. Tax at 25% is £30,000, less relief of 3/200 × (£250,000 − £120,000) = £1,950, giving £28,050 — an effective rate of about 23.4%.

Do associated companies change the limits?

Yes. The £50,000 and £250,000 limits are divided by the number of associated companies, so a group with several companies hits the 25% rate at lower profit levels. They are also reduced pro-rata for accounting periods shorter than 12 months.

UK Corporation Tax Calculator 2026

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UK Corporation Tax is charged on company profits, with a lower rate for small profits and a higher main rate, smoothed by marginal relief in between. This calculator applies the 2025/26 rates and the 3/200 standard fraction.

How it works

Profits up to £50,000 are taxed at 19%, and profits above £250,000 at 25%. Between those limits, tax is computed at 25% and then reduced by marginal relief:

marginal relief = 3/200 × (£250,000 − profit)
tax = profit × 25% − marginal relief

The 3/200 fraction (0.015) means the effective rate rises smoothly from 19% at £50,000 to 25% at £250,000, with an effective marginal rate around 26.5% inside the band.

Example

On £120,000 of profit, the company is in the marginal relief band. Tax at 25% is £30,000. Marginal relief is 3/200 × (£250,000 − £120,000) = 0.015 × £130,000 = £1,950. The Corporation Tax due is £28,050, an effective rate of about 23.4%.

Notes

Estimate only, not tax advice. Models 2025/26 Corporation Tax with the 19% and 25% rates and 3/200 marginal relief, assuming no associated companies, a 12-month period, and no franked investment income. Associated companies and short periods reduce the £50,000 and £250,000 limits. Verify at gov.uk.