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Corporation Tax calculator

Estimate Corporation Tax for a 12-month period with no associated companies: 19% on profits up to £50,000, 25% above £250,000, and marginal relief in between using HMRC's 3/200 fraction.

The three bands from 1 April 2023

Companies pay Corporation Tax at 19% on profits of £50,000 or less (the small profits rate) and at 25% on profits above £250,000 (the main rate). Between those limits you can claim marginal relief, which eases the step up from 19% to 25% (GOV.UK, marginal relief).

How marginal relief is calculated

Tax is first charged at 25%, then reduced by: (3/200) × (upper limit − augmented profits) × (taxable profits ÷ augmented profits). The fraction 3/200 is the standard marginal relief fraction for financial years from 2023 onwards (HMRC CTM03925, CTM03910).

Worked example (HMRC)

HMRC's manual: taxable profits £90,000, augmented profits £98,000, no associated companies. Tax at 25% = £22,500. Marginal relief = (3/200) × (£250,000 − £98,000) × (£90,000/£98,000) = £2,094. Corporation Tax due = £20,406 (CTM03925). Try £90,000 / £98,000 in the form above to match.

Associated companies and short periods

The £50,000 and £250,000 limits are divided by the number of associated companies (including yours) and reduced for accounting periods shorter than 12 months (GOV.UK).

Compare take-home as a sole trader vs a company with the sole trader vs limited company calculator. HMRC also has an online marginal relief calculator.

Based on GOV.UK and HMRC manuals, checked 15 October 2026. An estimate, not tax advice.

Questions

What is the Corporation Tax rate in 2026?

19% on profits up to £50,000, 25% above £250,000, with marginal relief between those limits (from 1 April 2023, still current on GOV.UK).

What is marginal relief?

A reduction from tax charged at 25%, so the effective rate rises gradually between £50,000 and £250,000 of profits.

Do associated companies change the limits?

Yes. Divide £50,000 and £250,000 by the number of associated companies, including yours.

Is this the same as Income Tax?

No. Corporation Tax is charged on company profits. Sole traders use Income Tax and National Insurance instead.