Marginal relief and associated companies worked out on your CT600
Taxley works out marginal relief on the CT600 when profits fall between £50,000 and £250,000, dividing both limits by the number of associated companies plus one and reducing them for a period shorter than 12 months. You enter how many associated companies there are; Taxley doesn't decide which companies count.
Preparing and previewing is free. You pay one fee per return, only when you choose to file.
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What can't Taxley do with marginal relief?
Taxley does the arithmetic; deciding which companies are associated stays with you.
- Counting associated companies. Taxley doesn't work out which companies are associated with yours. You enter the number, and it divides the limits by it.
- Periods across 1 April 2023. An accounting period that straddles 1 April 2023, for a company with associated companies.
- Large companies. Companies that pay Corporation Tax by quarterly instalments.
- Older periods. Some earlier accounting periods. Before you pay, Taxley checks whether it can file yours.
- Advice. Taxley is software from Taxley UK LLP, not an accountant or tax agent. The directors stay responsible for the figures, including the count.
How does Taxley work out marginal relief?
From the profits and the number of associated companies, with no fraction to apply yourself. Profits up to £50,000 pay the 19% small profits rate, profits over £250,000 pay the 25% main rate, and marginal relief brings the tax down in between (GOV.UK: Marginal Relief for Corporation Tax).
- Enter the figures. Taxley works out the company's taxable profits from the accounts and the tax adjustments.
- Enter the associated companies. Taxley divides both limits by that number plus one, and reduces them by days for a period shorter than 12 months.
- Add exempt dividends. Dividends from companies outside a group count towards the limits, though they aren't taxed, and Taxley adds them for the test.
- Check the computation. It shows the limits used and the relief, and the CT600 carries the count in box 326 and the relief in box 435.
- Pay and file. Taxley sends the return to HMRC with the company's own Government Gateway login.
A close investment-holding company pays the main rate on all its profits, and Taxley applies that when the company type says so. The free Corporation Tax calculator estimates the tax before you start.
What does it cost to file a CT600 with marginal relief?
Marginal relief doesn't change the fee: £49.95 with micro-entity accounts or £139 with small-company accounts. The fee also covers filing the accounts at Companies House once the return is paid and finished. Every plan is on the pricing page.
Frequently asked questions
Does Taxley decide which companies are associated?
No. Broadly, a company that controls yours, that yours controls, or that is under the same control as yours, at any time in the accounting period. Dormant companies and some passive holding companies don't count. You count them and enter the number.
Where does the associated company count go on the CT600?
In box 326. Taxley puts the number you enter there, divides both limits by it plus one, so one associated company halves each limit, and shows the limits it used in the computation.
How does Taxley handle a short accounting period?
Both limits shrink with the number of days in the period, so a 6-month period has about half the usual limits. Taxley reduces them by days, and splits a period that runs across two financial years.
Do I have to claim marginal relief?
It is claimed on the CT600. When the profits fall in the band, Taxley fills in the claim and enters the relief in box 435, so you don't work out the fraction yourself.
Ready to see your company's tax?
Enter the figures and the associated companies, check the tax, and pay only when you file.