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Corporation Tax Calculator 2026/27

Enter your company profits to estimate corporation tax, including marginal relief calculations.

2026/27 HMRC rates No signup No data stored Browser-only calculation
£

Your limited company's net taxable profit for the accounting period.

Marginal Relief

Estimated corporation tax

£16,125

Profit after tax £58,875
Effective tax rate 21.50%
For profits between £50,000 and £250,000, Marginal Relief applies to smoothly transition the rate from 19% to 25%.

Corporation Tax

£16,125

Eff. rate: 21.50%

What is Corporation Tax in the UK?

Corporation Tax is a tax on the taxable profits of UK limited companies, clubs, co-operatives, and other associations. Unlike sole traders who pay personal Income Tax on their business profit through Self Assessment, companies file a Company Tax Return (CT600) with HMRC and pay Corporation Tax on their taxable business profits.

Limited companies are distinct legal entities. Profits generated belong to the company, and they are taxed at corporate rates before any money is distributed to directors or shareholders.

What is the 2026/27 Corporation Tax Rate?

The UK has a tiered corporate tax system to protect smaller businesses. For the 2026/27 tax year, the rates depend on your company's net profits:

Profit Level Tax Rate Details
Up to £50,000 19% Small Profits Rate applies to companies with smaller profit margins.
£50,001 to £250,000 Marginal Rate A sliding scale of Marginal Relief applies to smoothly transition the rate.
Over £250,000 25% Main Rate applies to all corporate profits above this threshold.

What is Marginal Relief and How Does It Benefit Your Company?

Marginal Relief prevents companies from jumping abruptly from 19% to 25% when profits cross the £50,000 threshold. For profits between £50,001 and £250,000, the formula is:

Tax = (Profits * 25%) - (3/200 * (£250,000 - Profits))

In practice, this ensures your tax rate rises progressively on every pound of profit you make in this range. The relief reduces the corporation tax burden for mid-sized operations.

Note on Associated Companies: If you own multiple companies or control them together, the £50,000 and £250,000 limits must be divided equally among them. For example, if you own three limited companies, each company's lower threshold becomes £16,667, and the upper limit becomes £83,333.

How to Minimise Your Company's Corporation Tax

Tax is only paid on the net profit remaining after all business overheads. Therefore, claiming all allowable corporate expenses is vital:

  • Director Salaries & Pensions: Pay yourself a director salary and make employer pension contributions to reduce company profits before corporate tax calculation.
  • Asset Purchases: Write off capital assets under the Annual Investment Allowance (AIA) or Full Expensing rules.
  • Office costs: Deduct computing hardware, telephone lines, software licenses, travel expenses, and office rents.

Corporation Tax FAQs

What is the UK corporation tax rate for 2026/27?
For the 2026/27 tax year, there are two main rates: the Small Profits Rate of 19% applies to profits up to £50,000, and the Main Rate of 25% applies to profits over £250,000. Profits between £50,001 and £250,000 benefit from Marginal Relief, which scales the tax rate dynamically.
What is Marginal Relief and how is it calculated?
Marginal Relief reduces the effective Corporation Tax rate for companies with profits between £50,000 and £250,000. The relief is calculated using the HMRC formula: Tax = (Profits * 25%) - (3/200 * (£250,000 - Profits)). This smoothly blends the rate from 19% to 25%, avoiding a sharp jump.
When do I pay corporation tax to HMRC?
Corporation Tax must be paid 9 months and 1 day after the end of your company's accounting period. For example, if your year ends on 31 March 2027, payment is due by 1 January 2028. Very large companies pay in quarterly instalments.
What is the corporation tax associated companies rule?
The £50,000 and £250,000 profit thresholds are divided among associated companies. So if you control two companies, each threshold is halved. This means each company would pay the Small Profits Rate only on profits up to £25,000, and the Main Rate applies above £125,000 per company.
Can business expenses reduce my corporation tax bill?
Yes, limited companies only pay corporation tax on taxable profits. Allowable business expenses like staff salaries, office costs, software, travel, equipment, and marketing reduce your pre-tax profits, thereby lowering your final corporation tax bill.
How do dividends affect corporation tax?
Dividends are paid out of post-tax profits (i.e. profits after corporation tax is subtracted). Unlike salaries or pension contributions, dividends are not considered an allowable business expense and do not reduce your company's corporation tax liability.