Corporation Tax rates and marginal relief 2026/27
In short: For the financial year 2026 (1 April 2026 to 31 March 2027, "FY2026"), UK Corporation Tax is charged at 19% on profits up to £50,000 (the small profits rate), 25% on profits over £250,000 (the main rate), and at a tapered rate in between thanks to marginal relief with a fraction of 3/200.
These are the same figures that have applied since 1 April 2023 (GOV.UK rates and allowances, updated 1 April 2026). The two thresholds are shared between associated companies and reduced for accounting periods shorter than 12 months.
Taxley works all of this out for you — the rate, marginal relief, associated-company and short-period adjustments — when you prepare your CT600, so you can sense-check the numbers below against your own return.
What are the current UK Corporation Tax rates?
The rates below apply to every financial year from 1 April 2023 onwards — FY2023, FY2024, FY2025 and FY2026 (the year to 31 March 2027) all use the same figures: 19% up to £50,000, 25% over £250,000 and marginal relief in between. Always confirm the current position on GOV.UK before filing.
| Taxable profits | Rate | Notes |
|---|---|---|
| Up to £50,000 | 19% | Small profits rate |
| £50,000 – £250,000 | 25% less marginal relief — an overall (effective) rate between 19% and 25% | Each extra £1 of profit in this band is taxed at a marginal rate of 26.5% |
| Over £250,000 | 25% | Main rate |
The £50,000 and £250,000 figures are the lower and upper limits. They assume a single, standalone company with a 12-month accounting period — both are adjusted in the situations described further down.
What is the small profits rate?
The small profits rate is 19% and applies when your company's profits are £50,000 or less. Most micro and small limited companies fall here and simply pay 19% on their taxable total profits. The £50,000 limit is shared between associated companies and reduced for periods shorter than 12 months, so check both before assuming it applies.
Close investment-holding companies are not entitled to the small profits rate or marginal relief and pay the 25% main rate regardless of profit level (HMRC manual CTM03951). A property company that lets to people connected with it can fall into this category — see our property company guide.
How does marginal relief work?
When profits fall between £50,000 and £250,000, you start from the 25% main rate and then subtract marginal relief. The result is an overall (effective) rate that rises gradually from 19% at £50,000 to 25% at £250,000, and the company's total tax never exceeds 25% of its profits.
Because the benefit of the lower rate is being withdrawn as profits rise, each additional pound of profit inside the band is taxed at 26.5% (the marginal rate). HMRC's Marginal Relief guidance links to an official calculator you can check your figure against.
The formula HMRC uses is:
Marginal relief = (Upper limit − Augmented profits)
× (Taxable total profits ÷ Augmented profits)
× (3 ÷ 200)
- Taxable total profits (TTP) is the profit you're taxed on.
- Augmented profits is TTP plus certain exempt distributions (dividends) from non-group companies. For most small companies with no such income, augmented profits = TTP.
- 3 ÷ 200 is the marginal relief fraction (standard fraction) for these years.
How much Corporation Tax is due on £100,000 of profit?
A standalone company with £100,000 of taxable profit in a 12-month period pays £22,750: £25,000 at the main rate less £2,250 of marginal relief, an effective rate of 22.75%. That assumes no exempt distributions, so augmented profits also = £100,000:
- Tax at the main rate: £100,000 × 25% = £25,000
- Marginal relief: (£250,000 − £100,000) × (£100,000 ÷ £100,000) × 3/200 = £150,000 × 0.015 = £2,250
- Corporation Tax due: £25,000 − £2,250 = £22,750
That 22.75% sits between the 19% and 25% headline rates, exactly as marginal relief intends. To try other figures, use our free Corporation Tax calculator.
How do associated companies change the limits?
If your company has one or more associated companies (broadly, companies under common control), the £50,000 and £250,000 limits are divided by the total number of associated companies, including your own. For example, with one associated company the limits halve to £25,000 and £125,000.
This can push a company into marginal relief — or onto the full 25% rate — much sooner, so it's important to count associations correctly. Our associated companies guide explains what information to gather.
What about short accounting periods?
The limits are proportionately reduced for accounting periods of less than 12 months. A 6-month period, for instance, uses limits of £25,000 and £125,000. Where a long period of account is split into two Corporation Tax accounting periods, each period gets its own apportioned limits.
See our Corporation Tax deadlines guide on how a long first period splits into two returns.
Not sure whether your company's return is straightforward enough to file yourself? Take the 30-second check to see whether Taxley fits your company.
Frequently asked questions
Did Corporation Tax rates change in April 2026?
No. For the financial year starting 1 April 2026 (FY2026), the small profits rate is still 19%, the main rate 25%, the limits £50,000 and £250,000, and the marginal relief fraction 3/200 — the same figures that have applied since 1 April 2023.
What is the effective Corporation Tax rate between £50,000 and £250,000?
It depends on the profit. The overall (effective) rate rises from 19% at £50,000 to 25% at £250,000 — for example, 22.75% on £100,000 of profit for a standalone company. The 26.5% figure you may see quoted is the marginal rate: the tax on each additional pound of profit inside the band, not the rate on the company's whole profit.
What is the marginal relief fraction?
It is 3/200 for every financial year from 1 April 2023 onwards, including FY2026 (1 April 2026 to 31 March 2027). It is the last term in HMRC's formula: (upper limit − augmented profits) × (taxable total profits ÷ augmented profits) × 3/200.
Do all companies get the small profits rate?
No. Close investment-holding companies are excluded and pay the 25% main rate on all profits. Ordinary trading and service companies, and property companies letting commercially to tenants who are not connected with them, generally do qualify.
Does a 6-month accounting period get the full £50,000 limit?
No. The limits are proportionately reduced for accounting periods of less than 12 months, so a 6-month period uses limits of £25,000 and £125,000. If the company also has associated companies, the limits are divided between them as well (GOV.UK Corporation Tax rates).
Taxley applies the main rate, small profits rate and marginal relief automatically — including associated-company and short-period adjustments, apportioned across financial years — when it prepares your CT600. Figures should still be checked carefully before filing.
Update history
- Updated for 2026/27 (FY2026) using GOV.UK rates and allowances
- Corrected 26.5% to the marginal rate, not the effective rate
- Extended the rates to cover FY2023 to FY2026
Spotted something out of date? See how we handle corrections.
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