How much Corporation Tax will my company pay?
Corporation Tax is charged on a limited company's taxable profit for its accounting period. Profits of £50,000 or less are taxed at the Small Profits Rate of 19%, and profits of £250,000 or more at the Main Rate of 25%.
Profits between those two thresholds are taxed at the Main Rate and then reduced by Marginal Relief, so the effective rate rises smoothly from 19% to 25% across the band rather than jumping the moment you pass £50,000. Enter your profit above to see the tax due and your effective rate.
How UK Corporation Tax works
Corporation Tax is charged on a limited company's taxable profit for its accounting period. Companies with profits of £50,000 or less pay the Small Profits Rate of 19%. Companies with profits of £250,000 or more pay the Main Rate of 25%.
Profits between those two thresholds pay tax at the Main Rate, reduced by Marginal Relief, so the effective rate rises smoothly from 19% to 25% across the band rather than jumping straight to the Main Rate the moment you cross £50,000.
What is Marginal Relief?
Marginal Relief is calculated as (Main Rate threshold − profit) x 3/200, then deducted from tax charged at the Main Rate. HMRC also publishes this as a single effective marginal rate of 26.5% on profit that falls within the band, which gives the same result. This calculator applies the exact formula automatically based on the profit you enter.
Associated companies and shorter accounting periods
The £50,000 and £250,000 thresholds are shared between a company and any companies associated with it (broadly, companies under common control), divided equally between them. If you have associated companies, enter how many in the calculator above and the thresholds will be adjusted accordingly.
The thresholds are also reduced in proportion to the length of your accounting period if it's shorter than 12 months, such as a company's first period or one shortened by a change of year end.
Corporation Tax vs. tax on dividends
Corporation Tax is charged on the company's own profit. If you then take money out of the company as dividends, that's a separate personal tax charge on you as an individual shareholder, at different rates depending on your other income. This calculator covers company-level Corporation Tax only; for the tax on salary you draw from your company, see the Take-Home Pay Calculator.
Example Corporation Tax calculations
These company profit scenarios illustrate the small profits rate, marginal relief and main Corporation Tax rate.
Small company profit
£30,000 profit
- Corporation Tax
- £5,700
- Effective rate
- 19.0%
Marginal Relief band
£120,000 profit
- Corporation Tax
- £28,050
- Effective rate
- 23.4%
Above the Main Rate threshold
£400,000 profit
- Corporation Tax
- £100,000
- Effective rate
- 25.0%
One associated company
£120,000 profit · 1 associated company
- Corporation Tax
- £29,925
- Effective rate
- 24.9%
Frequently asked questions
01How is UK Corporation Tax calculated?
Corporation Tax is charged on a limited company's taxable profit for its accounting period. Companies with profits of £50,000 or less pay the Small Profits Rate of 19%. Companies with profits of £250,000 or more pay the Main Rate of 25%. Profits in between pay tax at 25% minus Marginal Relief, which tapers the effective rate smoothly between the two, rather than jumping straight from 19% to 25%.
02What is Marginal Relief?
Marginal Relief reduces the Corporation Tax bill for companies with profits between £50,000 and £250,000, so the effective tax rate rises gradually from 19% to 25% across that band instead of jumping straight to 25% once you cross £50,000. It's calculated as (Upper Limit − profit) x 3/200, then deducted from tax charged at the Main Rate. This calculator applies the formula automatically.
03What counts as 'associated companies' for Corporation Tax?
Two companies are associated if one has control of the other, or both are under the control of the same person or group of people, at any point in the accounting period. If you have associated companies, the £50,000 and £250,000 thresholds are divided equally between all of them (including this one), which can push more of your profit into the Main Rate or Marginal Relief band. If you're unsure whether a company counts, check with an accountant.
04What if my accounting period is shorter than 12 months?
The £50,000 and £250,000 thresholds are reduced in proportion to how much shorter than a year the period is. For example, a 6-month accounting period (such as a company's first year, or after a change of year end) has thresholds of £25,000 and £125,000 instead. This calculator applies that automatically based on the accounting period length you enter.
05Is this the same as the tax I pay on dividends I take from my company?
No. Corporation Tax is charged on the company's own profit, before anything is paid out to shareholders. If you then take money out as dividends, that's a separate, personal tax charge on you as an individual, at different rates depending on your other income. This calculator covers company-level Corporation Tax only.
06Do sole traders pay Corporation Tax?
No. Corporation Tax only applies to limited companies (and some other incorporated organisations). Sole traders and partners in a traditional partnership pay Income Tax and Class 2/4 National Insurance on their business profits instead, through Self Assessment, not Corporation Tax.
07When do I need to pay Corporation Tax?
Most companies must pay Corporation Tax 9 months and 1 day after the end of their accounting period, and file a Company Tax Return within 12 months of the end of that period. Larger companies with profits over £1.5 million (adjusted for associated companies) usually pay in quarterly instalments instead. Check GOV.UK or your accountant for your company's specific deadlines.
Rates, thresholds and calculation limits
This Corporation Tax calculator assumes:
- Your entered profit is the company's full taxable profit for the accounting period, with no separate reliefs, losses brought forward, or capital allowances still to apply.
- “Augmented profits” (the specific figure Marginal Relief is technically based on) equal taxable profit, i.e. the company receives no exempt dividends from non-group companies. This holds for the large majority of small and medium companies.
- This isn't the company's first accounting period.
- All figures are rounded to the nearest penny.
For personal tax on income drawn from your company, see the Take-Home Pay Calculator. Full source citations are also listed on the About & methodology page.
Sources
Corporation Tax rates and Marginal Relief guidance are taken directly from: