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    Corporation Tax Calculator

    Company Details

    Enter company profit details to calculate Corporation Tax

    What is Corporation Tax?

    Corporation tax is a tax on the profits made by UK companies, including limited companies, unincorporated associations, and other organisations. Our UK corporation tax calculator helps you calculate exactly how much tax your company will pay based on current HMRC rates for 2026/27.

    For 2026/27, the UK operates a dual-rate corporation tax system. Small companies with profits up to £50,000 pay 19% (small profits rate), while larger companies with profits over £250,000 pay 25% (main rate). Companies with profits between these thresholds benefit from marginal relief, which gradually increases the effective rate.

    Understanding how to calculate corporation tax is essential for business planning and cash flow management. Our corporation tax calculator shows not just the tax due, but also explains how marginal relief works and when your payment is due to HMRC.

    Corporation Tax Calculation Examples

    Small Company (£30,000 profit)

    Taxable Profit:£30,000
    Tax Rate:19%
    Corporation Tax:£5,700
    After-Tax Profit:£24,300

    Medium Company (£150,000 profit)

    Taxable Profit:£150,000
    Effective Rate:23.75%
    Marginal Relief:£1,875
    Corporation Tax:£35,625
    After-Tax Profit:£114,375

    Large Company (£500,000 profit)

    Taxable Profit:£500,000
    Tax Rate:25%
    Corporation Tax:£125,000
    After-Tax Profit:£375,000

    How is Corporation Tax Calculated?

    Step-by-Step Calculation

    1. 1Calculate your company's taxable profit for the accounting period
    2. 2Determine which tax rate applies: 19% (small), 25% (main), or marginal relief
    3. 3Apply marginal relief if profits are between £50,000-£250,000
    4. 4Calculate final corporation tax liability
    5. 5Plan payment: due 9 months and 1 day after accounting period end

    Marginal Relief Explained

    What is Marginal Relief?

    Marginal relief prevents a sudden jump from 19% to 25% tax rate. Companies with profits between £50,000-£250,000 get relief that gradually increases their effective rate.

    How Much Relief?

    Relief = (Upper limit - Taxable profit) × Marginal relief fraction ÷ Number of associated companies. For 2026/27, the fraction is 3/200.

    Associated Companies

    The relief is reduced if you have associated companies (companies under common control). Each associated company reduces the available relief.

    Corporation Tax Rates 2026/27

    Tax Rates

    • Small profits rate: 19% (profits up to £50,000)
    • Main rate: 25% (profits over £250,000)
    • Marginal relief applies between £50,000 - £250,000

    Key Dates

    • Corporation Tax return due 12 months after accounting period end
    • Payment due 9 months and 1 day after accounting period end
    • Large companies may need to pay quarterly

    Detailed Corporation Tax Examples

    Example 1: Small Company - 19% Rate

    TechStart Ltd is a small software company with taxable profits of £45,000 for the year ending 31 March 2026.

    DescriptionAmount
    Taxable profits£45,000
    Applicable rate (below £50,000)19%
    Corporation tax (£45,000 × 19%)£8,550
    Profit after tax£36,450
    Payment deadline1 January 2027
    Return deadline31 March 2027

    As profits are below £50,000, TechStart Ltd pays the small profits rate of 19%. The company should set aside £8,550 for tax payment.

    Example 2: Marginal Relief Company - Between Thresholds

    ConsultPro Ltd has taxable profits of £120,000 for the year. They qualify for marginal relief as profits are between £50,000 and £250,000.

    Calculation StepAmount
    Taxable profits£120,000
    Tax at main rate (25%)£30,000
    Upper limit - profits (£250,000 - £120,000)£130,000
    Marginal relief fraction3/200
    Marginal relief (£130,000 × 3/200)£1,950
    Corporation tax due (£30,000 - £1,950)£28,050
    Effective tax rate23.4%
    Profit after tax£91,950

    Marginal relief reduces the tax from £30,000 to £28,050, saving £1,950. The effective rate of 23.4% is between 19% and 25%.

    Example 3: Company with Associated Companies

    BuildRight Ltd has profits of £80,000 but has one associated company under common ownership. The thresholds are divided by 2.

    DescriptionStandardWith 1 Associated
    Lower threshold£50,000£25,000
    Upper threshold£250,000£125,000
    Company profits£80,000
    Tax at 25%£20,000
    Marginal relief (£125,000 - £80,000) × 3/200£675
    Corporation tax due£19,325
    Effective rate24.2%

    With associated companies, the thresholds are divided. BuildRight pays 24.2% effective rate, higher than if standalone (which would be around 21.8%).

    Construction company directors handling subcontractor payments may also need our CIS rebate calculator UK to estimate deductions and refund planning figures.

    Corporation Tax Effective Rates 2026/27

    Quick reference showing effective tax rates at different profit levels (standalone company, no associated companies).

    Taxable ProfitCorporation TaxEffective RateProfit After Tax
    £25,000£4,75019.0%£20,250
    £50,000£9,50019.0%£40,500
    £75,000£16,12521.5%£58,875
    £100,000£22,75022.8%£77,250
    £150,000£36,00024.0%£114,000
    £200,000£49,25024.6%£150,750
    £250,000£62,50025.0%£187,500
    £500,000£125,00025.0%£375,000

    8 Ways to Legally Reduce Corporation Tax

    1

    Maximize Pension Contributions

    Company pension contributions are fully tax-deductible. Directors can receive up to £60,000/year in pension contributions instead of salary, saving both corporation tax and personal tax.

    2

    Claim R&D Tax Credits

    If your company develops new products, processes, or software, you may qualify for R&D tax credits. SMEs can claim enhanced 86% deduction on qualifying R&D expenditure.

    3

    Use Annual Investment Allowance

    Deduct 100% of qualifying plant and machinery costs (up to £1 million) in the year of purchase. This includes equipment, commercial vehicles, and some fixtures.

    4

    Time Purchases Strategically

    Make major purchases before your year-end to claim deductions sooner. Delay income where possible to push it into the next accounting period.

    5

    Claim All Allowable Expenses

    Don't miss legitimate expenses: professional fees, training, software subscriptions, travel, marketing, bad debts written off, and a portion of mixed-use costs.

    6

    Carry Forward Losses

    If your company made losses in previous years, these can be carried forward to offset against current profits, potentially eliminating your tax bill entirely.

    7

    Consider Patent Box

    If your company holds qualifying patents, the Patent Box regime allows you to pay just 10% tax on profits derived from those patents instead of the normal rate.

    8

    Structure Director Remuneration

    Balance salary (tax-deductible) vs dividends (not deductible) to optimize overall tax. Many directors take small salary (up to NI threshold) plus dividends.

    5 Common Corporation Tax Mistakes to Avoid

    1. Missing Payment Deadlines

    Corporation tax is due 9 months and 1 day after your accounting period ends - not when you file your return. Late payment attracts interest and can trigger penalties. Set calendar reminders well in advance.

    2. Forgetting About Associated Companies

    If you control multiple companies or have companies under common control, the profit thresholds are divided. This can push you into a higher effective tax rate. Always declare associated companies accurately.

    3. Not Claiming Available Reliefs

    Many companies miss R&D tax credits, capital allowances, or loss relief. These reliefs can significantly reduce your tax bill. Review annually whether you qualify for any reliefs you're not currently claiming.

    4. Incorrect Expense Classification

    Capital expenditure (assets with lasting value) is treated differently from revenue expenditure (day-to-day costs). Misclassifying these can result in underpaying or overpaying tax and trigger HMRC inquiries.

    5. Poor Record-Keeping

    Companies must keep records for 6 years. Without proper records, you can't substantiate deductions if HMRC enquires. Use accounting software and keep all invoices, receipts, and bank statements organized.

    Quarterly Instalment Payments

    Large and very large companies must pay corporation tax in quarterly instalments rather than 9 months after year-end.

    Large Companies (£1.5m+ profits)

    • Threshold: £1.5 million annual profits (divided by associated companies)
    • Payment 1: Month 7 of accounting period
    • Payment 2: Month 10 of accounting period
    • Payment 3: Month 13 (1 month after year-end)
    • Payment 4: Month 16 (4 months after year-end)

    Very Large Companies (£20m+ profits)

    • Threshold: £20 million annual profits (divided by associated companies)
    • Payment 1: Month 3 of accounting period
    • Payment 2: Month 6 of accounting period
    • Payment 3: Month 9 of accounting period
    • Payment 4: Month 12 (year-end)

    Filing Your Company Tax Return (CT600)

    What You Need

    • Completed CT600 form
    • Full company accounts
    • Corporation tax computations
    • Details of any claims or reliefs
    • Records of associated companies

    Key Deadlines

    • File CT600: Within 12 months of accounting period end
    • Pay tax: Within 9 months and 1 day of period end
    • Companies House accounts: Within 9 months (private)
    • Keep records: For 6 years

    Frequently Asked Questions

    How do you calculate corporation tax in the UK?+
    Corporation tax is calculated on a company's taxable profits. For 2026/27, companies pay 19% on profits up to £50,000 (small profits rate), 25% on profits over £250,000 (main rate), with marginal relief applying between £50,000-£250,000. Use our corporation tax calculator to get accurate calculations based on current HMRC rates.
    How is corporation tax calculated for 2026/27?+
    Corporation tax calculation for 2026/27 uses a two-tier system: 19% for small companies (profits up to £50,000) and 25% for larger companies (profits over £250,000). Companies with profits between £50,000-£250,000 benefit from marginal relief, which gradually increases the rate from 19% to 25%.
    What is the corporation tax rate for limited companies?+
    Limited companies pay corporation tax at either 19% (small profits rate) or 25% (main rate) depending on their profit levels. Companies with profits between £50,000-£250,000 receive marginal relief. Our UK company tax calculator shows exactly how much your limited company will pay.
    How to calculate corporation tax for small companies?+
    Small companies with profits up to £50,000 pay corporation tax at 19%. Simply multiply your taxable profit by 0.19 to calculate the tax due. For profits above £50,000, marginal relief applies until profits reach £250,000, after which the full 25% rate applies.
    What is marginal relief for corporation tax?+
    Marginal relief ensures companies with profits between £50,000-£250,000 don't face a sudden jump from 19% to 25%. Instead, the effective rate gradually increases. Our corporation tax calculator automatically applies marginal relief where applicable.
    When do I need to pay corporation tax?+
    Corporation tax is due 9 months and 1 day after your accounting period ends. For example, if your accounting period ends on 31 March, corporation tax is due by 1 January the following year. Your company tax return is due 12 months after the accounting period end.
    Is this calculator accurate for HMRC returns?+
    Yes, our corporation tax calculator uses the official HMRC rates and thresholds for 2026/27. It accurately calculates corporation tax liability including marginal relief. However, for complex tax situations involving R&D credits, losses carried forward, or other adjustments, consult a tax professional.
    Can I use this for my company tax return?+
    Our company tax calculator provides accurate estimates for standard corporation tax calculations. It's perfect for tax planning and budgeting. However, your official tax return should include all allowable deductions, reliefs, and adjustments that may not be covered by this basic calculator.
    What expenses can a limited company deduct before calculating corporation tax?+
    Companies can deduct allowable business expenses including employee salaries and NI, rent and business rates, equipment and software, professional fees, travel costs, marketing, pension contributions, and interest on business loans. Only expenses 'wholly and exclusively' for business purposes qualify.
    How do associated companies affect corporation tax thresholds?+
    The £50,000 and £250,000 thresholds are divided by the number of associated companies plus one. For example, with one associated company, thresholds become £25,000 and £125,000. Associated companies are those under common control or with at least 51% common ownership.
    What is R&D tax relief and how does it reduce corporation tax?+
    Research and Development (R&D) tax relief lets qualifying companies claim extra deduction for R&D spending. SMEs can claim 86% enhanced deduction plus 10% credit on surrenderable losses. Large companies claim RDEC at 20%. This significantly reduces your corporation tax liability for innovative projects.
    Can I carry forward corporation tax losses?+
    Yes, trading losses can be carried forward indefinitely to offset against future profits from the same trade. You can also carry back losses one year against total profits. There's a restriction on using losses carried forward - only 50% of profits above £5 million can be relieved each year.
    When do companies need to pay corporation tax quarterly?+
    Large companies (profits over £1.5 million) and very large companies (profits over £20 million) must pay quarterly instalments. Large company payments are due in months 7, 10, 13 and 16 after accounting period start. Very large companies pay in months 3, 6, 9 and 12.
    What is the Annual Investment Allowance for corporation tax?+
    The Annual Investment Allowance (AIA) lets you deduct 100% of qualifying plant and machinery costs (up to £1 million per year) from taxable profits immediately. This includes equipment, vehicles (except cars), furniture, and some fixtures. It's a powerful way to reduce your corporation tax bill.
    How do dividend payments affect corporation tax?+
    Dividends paid by your company are not tax-deductible expenses - they come from after-tax profits. However, dividends received from other UK companies are usually exempt from corporation tax (franked investment income). Plan dividend payments carefully for optimal tax efficiency.
    What penalties apply for late corporation tax filing or payment?+
    Late filing: £100 if 1 day late, £200 if 3 months late, 10% of tax if 6 months late, 20% of tax if 12 months late. Late payment: interest accrues daily from due date. HMRC may also issue penalties for inaccurate returns. File and pay on time to avoid these costs.

    Related Tax Calculators

    Company profit links naturally to VAT, payroll and dividend planning, so these tools help complete the business tax view. use the VAT calculator for VAT-inclusive and VAT-exclusive amounts, use the employer NI calculator for staff costs and use the dividend tax calculator for director or shareholder income.

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