Corporation Tax Calculator
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Tax Breakdown
Useful Corporation Tax Guides
- How is Corporation Tax Calculated in the UK? A Complete Small Business Guide
- Corporation Tax Marginal Relief Explained: Formulas & Examples for 2026/27
- Allowable Expenses to Reduce Corporation Tax: What Can a UK Ltd Company Claim?
- Associated Companies Rules: How Group Structures Impact Your Corporation Tax Bands
- How to Pay Corporation Tax: HMRC Deadlines, Payment Methods & Late Interest
UK Corporation Tax Profit Cheatsheet (2026/27 Tax Year)
Use this reference table to see exact Corporation Tax liabilities, marginal relief deductions, and effective tax rates across common UK business profit levels for standalone companies with no associated entities.
| Taxable Profit | Applicable Band | Marginal Relief Discount | Corporation Tax Due | Effective Rate | Retained Profit |
|---|---|---|---|---|---|
| £10,000 | Small Profits (19%) | £0.00 | £1,900.00 | 19.00% | £8,100.00 |
| £30,000 | Small Profits (19%) | £0.00 | £5,700.00 | 19.00% | £24,300.00 |
| £50,000 | Small Profits Limit (19%) | £0.00 | £9,500.00 | 19.00% | £40,500.00 |
| £75,000 | Marginal Relief Taper | -£2,625.00 | £16,125.00 | 21.50% | £58,875.00 |
| £100,000 | Marginal Relief Taper | -£2,250.00 | £22,750.00 | 22.75% | £77,250.00 |
| £150,000 | Marginal Relief Taper | -£1,500.00 | £36,000.00 | 24.00% | £114,000.00 |
| £200,000 | Marginal Relief Taper | -£750.00 | £49,250.00 | 24.63% | £150,750.00 |
| £250,000 | Main Rate Threshold (25%) | £0.00 | £62,500.00 | 25.00% | £187,500.00 |
| £500,000 | Main Rate (25%) | £0.00 | £125,000.00 | 25.00% | £375,000.00 |
| £1,000,000 | Main Rate (25%) | £0.00 | £250,000.00 | 25.00% | £750,000.00 |
1. The Three-Tier UK Corporation Tax System Explained
Under the Corporation Tax Act 2010 (CTA 2010) Part 3, UK limited companies and corporate bodies pay tax on their annual taxable profits according to a graduated three-tier structure. Unlike Income Tax, which is charged in progressive brackets on individual slices of personal earnings, Corporation Tax is charged on a company’s total augmented taxable profits:
- Small Profits Rate (19%): Applies to companies with total taxable profits of £50,000 or less. Designed to protect small businesses, startups, and contractors from elevated corporate overhead.
- Marginal Relief Taper Band (£50,001 to £250,000): Provides a transitional sliding scale for mid-sized companies, smoothly bridging the effective tax rate from 19% up to 25%.
- Main Rate (25%): Applies to all companies with taxable profits exceeding £250,000. The full 25% rate applies across the entire profit base.
2. How Marginal Relief Works & The Hidden 26.5% Marginal Tax Rate
To prevent a sudden, unfair "cliff-edge" jump from 19% to 25% the moment a company earns £50,001, HMRC applies the statutory Marginal Relief Formula:
Net Corporation Tax Due = (Taxable Profit × 25%) - Marginal Relief Discount
The 26.5% Marginal Tax Reality: Because the Marginal Relief discount diminishes as profits grow from £50,000 to £250,000, every additional £1 of profit earned in this band is effectively taxed at 26.5% (£53,000 extra tax over a £200,000 increase = 26.5%). For company directors, accelerating allowable deductions (such as employer pension contributions or equipment purchases) within this £50k-£250k zone provides an immediate 26.5% corporate tax saving.
3. Associated Companies Rules (CTA 2010 Section 18A)
Under HMRC anti-fragmentation rules, two companies are associated if one controls the other, or both are under the common control of the same person or group of persons (e.g. holding 51%+ of voting shares or economic rights). When a business owner controls multiple active trading companies, the £50,000 and £250,000 thresholds are divided equally among all associated companies:
| Number of Associated Companies | Lower Limit (19% Rate) | Upper Limit (25% Rate) |
|---|---|---|
| 0 (Standalone Company) | £50,000 | £250,000 |
| 1 Associated (2 Total) | £25,000 | £125,000 |
| 2 Associated (3 Total) | £16,667 | £83,333 |
| 3 Associated (4 Total) | £12,500 | £62,500 |
Note: Dormant companies and passive holding companies with no active trading or management activity are excluded from the associated companies count.
4. Allowable vs Disallowable Expenses for UK Limited Companies
Corporation Tax is paid on net taxable profits, not total revenue. Deducting allowable expenses incurred "wholly and exclusively" for trading reduces your Corporation Tax liability directly:
✓ Allowable Business Deductions
- Director salaries & employee payroll
- Employer Class 1 National Insurance
- Employer Pension Contributions (100% deductible)
- Commercial office rent, utilities & business rates
- Software subscriptions (SaaS, cloud storage)
- Accountancy, audit & legal fees
- Business travel & mileage (45p/mile first 10,000 miles)
- Advertising, website hosting & SEO marketing
✗ Disallowable (Must Be Added Back)
- Client entertaining & corporate hospitality
- Accounting depreciation (replaced by Capital Allowances)
- Dividends paid to shareholders (post-tax distributions)
- HMRC fines, statutory penalties & late interest
- Client gifts costing over £50 per recipient
- Personal expenditure & private fuel use
- Political donations & non-qualifying charitable gifts
5. Capital Allowances vs. Accounting Depreciation
When a limited company purchases capital equipment (machinery, computers, vans, commercial tools), accounting rules require the cost to be depreciated over several years. However, HMRC does not permit depreciation as a tax deduction. Instead, depreciation is added back onto Form CT600, and statutory Capital Allowances are claimed in its place:
- Annual Investment Allowance (AIA): Allows 100% first-year tax deduction on up to £1,000,000 of qualifying plant, machinery, and equipment per year.
- Full Expensing (100% Relief): Permanent relief allowing companies paying Corporation Tax to write off 100% of the cost of brand-new, unused main-rate plant and machinery with no upper monetary cap.
- Special Rate 50% First-Year Allowance: 50% write-off on special rate assets (such as solar panels, air conditioning systems, and electrical installations) in year one, with the remaining balance joining the 6% writing-down pool.
6. HMRC Payment Deadlines & CT600 Filing Timelines
One of the most critical aspects of corporate compliance is that your Corporation Tax payment is due before your tax return filing deadline:
Must be paid electronically within 9 months and 1 day after your accounting period ends. (e.g., Year end 31 March → Payment due 1 January).
Your Company Tax Return (Form CT600) and statutory accounts must be submitted to HMRC within 12 months of your accounting period end date.
7. Corporate Loss Relief: Carry-Back and Carry-Forward Strategies
If your company experiences a trading loss during a difficult financial period, UK tax law provides flexible mechanisms to reclaim cash or offset future liabilities:
- 12-Month Loss Carry-Back: You can offset current trading losses against profits generated in the preceding 12-month accounting period, triggering an immediate tax refund from HMRC for tax previously paid.
- Indefinite Loss Carry-Forward: Unused trading losses can be carried forward indefinitely and deducted against future total company profits, reducing your Corporation Tax liability in profitable future years.
8. Director Tax Planning: Salary, Dividend & Pension Optimization
Company owners face an interactive calculation between Corporation Tax, Dividend Tax, and National Insurance. For the 2026/27 tax year, the most tax-efficient remuneration strategy typically combines:
- Low Director Salary: Drawing a salary up to the Secondary NI threshold (£5,000) or Personal Allowance (£12,570) to qualify for state pension credits while remaining an allowable deduction against Corporation Tax.
- Direct Employer Pension Contributions: Making direct company pension contributions into a SIPP or SSAS. Unlike salary or dividends, employer pension contributions incur 0% Income Tax, 0% Employee NI, 0% Employer NI, and are 100% tax-deductible against Corporation Tax.
- Dividends from Post-Tax Profits: Extracting remaining retained profits as dividends, utilizing the £500 tax-free dividend allowance and lower basic dividend rate (8.75%) without incurring National Insurance.
How We Calculated This
- Calculate Net Trading Profits: Determine your company's net accounting profit for the financial year by deducting all allowable trading expenses incurred 'wholly and exclusively' for business purposes from your gross revenue.
- Add Back Non-Allowable Expenses & Apply Capital Allowances: Add back disallowable expenses (such as business entertainment, client gifts over £50, depreciation, and fines). In place of depreciation, deduct statutory HMRC Capital Allowances (e.g., 100% Full Expensing on qualifying new plant & machinery, or the £1,000,000 Annual Investment Allowance).
- Include Non-Trading Income & Chargeable Gains: Add interest received on corporate accounts, commercial/residential property rental income, and net chargeable gains from asset disposals to calculate your total augmented taxable profits.
- Apply Small Profits Rate (19%): If your company has no associated companies and taxable profits do not exceed £50,000, the entire profit is taxed at the 19% Small Profits Rate.
- Apply Main Rate (25%): If your company's taxable profits exceed the upper limit of £250,000, Corporation Tax is charged at the 25% Main Rate across all taxable profits.
- Compute Marginal Relief (Taper Range £50,001 to £250,000): For profits between £50,000 and £250,000, compute tax at 25% on total profits, then subtract Marginal Relief: (£250,000 - Taxable Profit) * (3/200). This formula smoothly scales your effective tax rate from 19% to 25% (with a marginal rate of 26.5% on profits in this band).
- Adjust for Associated Companies (CTA 2010 Part 3): If your company shares 51%+ common control with other active companies, the £50,000 lower limit and £250,000 upper limit are divided equally by the total number of associated companies, moving profits into higher tax brackets earlier.
Real-World Examples
A small UK limited company with taxable trading profits of £35,000 and no associated companies in the 2026/27 tax year.
Taxable Profit: £35,000.00 Band: Small Profits Threshold (£0 to £50,000) Applicable Rate: 19.00% Corporation Tax Calculation: £35,000.00 * 0.19 = £6,650.00 Net Corporation Tax Due: £6,650.00 Effective Tax Rate: 19.00% Retained Post-Tax Profit: £28,350.00
A trading company with £100,000 taxable profit falling within the £50k-£250k marginal relief taper band.
Taxable Profit: £100,000.00 Band: Marginal Relief Band (£50,001 to £250,000) Step 1 (Main Rate 25%): £100,000.00 * 0.25 = £25,000.00 Step 2 (Taper Difference): £250,000.00 - £100,000.00 = £150,000.00 Step 3 (Marginal Relief Discount @ 3/200): £150,000.00 * 0.015 = £2,250.00 Net Corporation Tax Due: £25,000.00 - £2,250.00 = £22,750.00 Effective Tax Rate: 22.75% (Saving £2,250 vs flat 25%) Retained Post-Tax Profit: £77,250.00
A company earning £80,000 that shares common control with 1 other trading company (thresholds divided by 2).
Taxable Profit: £80,000.00 Associated Companies: 1 (Total = 2 companies) Adjusted Lower Limit (£50k / 2): £25,000.00 Adjusted Upper Limit (£250k / 2): £125,000.00 Step 1 (Main Rate 25%): £80,000.00 * 0.25 = £20,000.00 Step 2 (Adjusted Taper Difference): £125,000.00 - £80,000.00 = £45,000.00 Step 3 (Adjusted Marginal Discount @ 3/200): £45,000.00 * 0.015 = £675.00 Net Corporation Tax Due: £20,000.00 - £675.00 = £19,325.00 Effective Tax Rate: 24.16% (Incurs £1,875 more tax due to associated company rules) Retained Post-Tax Profit: £60,675.00
A large enterprise with profits exceeding the upper £250,000 threshold, subject to full 25% main rate.
Taxable Profit: £400,000.00 Band: Main Rate Upper Band (Above £250,000) Applicable Rate: 25.00% (No Marginal Relief applicable) Corporation Tax Calculation: £400,000.00 * 0.25 = £100,000.00 Net Corporation Tax Due: £100,000.00 Effective Tax Rate: 25.00% Retained Post-Tax Profit: £300,000.00