Corporation Tax Calculator 2026/27

Calculate your limited company tax bill — small profits rate, main rate, and marginal relief.

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Corporation Tax Due
£0
0%
Effective Rate
£0
Profit After Tax
£0
Marginal Relief
9 months + 1 day
Payment Deadline
Band Profits Rate Tax

Frequently Asked Questions

What is the corporation tax rate in 2026/27? ▼
There are two main rates: 19% for companies with profits up to £50,000 (small profits rate), and 25% for profits over £250,000 (main rate). Companies with profits between £50,000 and £250,000 benefit from marginal relief, producing an effective rate between 19% and 25%.
What is marginal relief for corporation tax? ▼
Marginal relief tapers the corporation tax bill for profits between the lower limit (£50,000) and upper limit (£250,000). The formula is: tax = profits × 25% − (3/200) × (upper limit − profits). Within this band the marginal rate on each extra £1 of profit is 26.5%.
How do associated companies affect the thresholds? ▼
The £50,000 and £250,000 profit limits are divided equally by the total number of associated companies. Two associated companies halve both thresholds to £25,000 and £125,000. Association broadly means common control: a holding company and its subsidiaries are associated, as are sibling companies under the same controlling shareholder.
When is corporation tax due? ▼
For companies with annual profits under £1.5m, payment is due 9 months and 1 day after the accounting period end. The CT600 tax return must be filed online within 12 months. Large companies (profits over £1.5m) pay in quarterly instalments.
Can I reduce my corporation tax bill? ▼
Yes. Common reliefs include: salary and employer pension contributions, capital allowances (Annual Investment Allowance up to £1m), R&D tax relief, business mileage, professional subscriptions, and all genuine trading expenses. Timing expenses strategically and maximising pension contributions are effective and legitimate planning tools.

How UK Corporation Tax works in 2026/27

UK Corporation Tax for the 2026/27 financial year uses two main rates: a small-profits rate of 19% on annual profits up to £50,000, and a main rate of 25% on profits above £250,000. Profits between £50,000 and £250,000 fall into marginal relief, where a tapered effective rate applies — the rate gradually climbs from 19% at £50,000 to 25% at £250,000 via a complex marginal-relief fraction.

For most UK limited companies with profits between £50,000 and £250,000, the marginal-rate calculation produces a notable cliff: every additional £1 of profit above £50,000 is taxed at roughly 26.5% (not 25%) because the marginal-relief calculation effectively front-loads the higher rate. This is the so-called "26.5% marginal rate" zone — at £100,000 of profit, your average rate is about 22.75% but the next pound costs 26.5%. Above £250,000, the marginal rate drops back to 25% (the main rate, with no marginal relief).

The £50,000 / £250,000 thresholds are reduced if your company has "associated" companies — broadly, other companies under common control. A company with one associate has the thresholds halved to £25,000 / £125,000. This catches director-shareholders of multiple companies — even small companies under common control share the thresholds.

Corporation Tax is paid 9 months and 1 day after the end of your accounting period for small/medium companies, and quarterly in instalments for "large" companies (profits over £1.5m). Calculation should be on profits AFTER deducting allowable expenses, capital allowances (full expensing on qualifying plant and machinery up to £1 million annually), and trading losses brought forward. R&D tax relief, the Patent Box regime (10% effective rate on patent income), and the Annual Investment Allowance are key reliefs to investigate — the right reliefs can reduce a £100,000 profit's Corporation Tax bill from £22,750 to much less. Always file your CT600 return alongside the company tax computation through HMRC's Corporation Tax online service.

Common Corporation Tax planning approaches in 2026/27

For UK limited companies in the marginal-relief zone (£50,000-£250,000 of annual profit), three CT planning approaches commonly reduce liability: (1) accelerating allowable expenses into the current year (training, equipment under £1m annual investment allowance, pension contributions for directors); (2) deferring revenue recognition into a subsequent year via accounting policy choices on long-term contracts; and (3) using R&D Tax Relief which delivers an enhanced deduction or cash credit for qualifying research costs (typically 15-27% effective rate depending on company size and SME vs RDEC scheme).

Director-shareholder optimisation deserves separate attention: pension contributions paid by the company (rather than personally) are deductible from Corporation Tax AND avoid the £60,000 annual allowance constraint applying personally. A £20,000 employer pension contribution reduces a £100,000-profit company's CT bill by approximately £4,650 (at the marginal 23.25% effective rate), benefiting both the director's pension pot AND the company's tax position. Always seek qualified accountant advice — Corporation Tax planning has complex interactions with director income, dividend allowances and IR35.