Corporation Tax Rates 2026/27: Guide for Small Businesses and Directors

Corporation Tax Rates 2026/27

Corporation Tax is paid by UK limited companies on their taxable profits. This guide explains the 2026/27 rates and how they affect your business.

Corporation Tax Rates

Profit Level	Tax Rate
Profits up to £50,000	19% (Small Profits Rate)
Profits £50,001 - £250,000	19% - 25% (Marginal Relief)
Profits over £250,000	25% (Main Rate)

Understanding Marginal Relief

If your profits fall between £50,000 and £250,000, you're in the "marginal relief" band. Your effective tax rate gradually increases from 19% to 25%.

Marginal Relief Formula: Marginal Relief = (Upper Limit - Profits) × (Profits × Standard Rate - Profits × Small Profits Rate) ÷ (Upper Limit - Lower Limit)

Simplified Effective Rates:

Profits	Effective Rate
£50,000	19.00%
£75,000	20.50%
£100,000	22.00%
£150,000	23.50%
£200,000	24.25%
£250,000+	25.00%

Associated Companies Rule

If you have associated companies (controlled by the same people), the profit thresholds are divided by the number of associated companies:

Associated Companies	Lower Limit	Upper Limit
1 company	£50,000	£250,000
2 companies	£25,000	£125,000
3 companies	£16,667	£83,333
4 companies	£12,500	£62,500

Example Calculations

Company with £80,000 profit:

Small profits rate tax: £80,000 × 19% = £15,200
Marginal Relief: (£250,000 - £80,000) × 3/200 = £2,550
Corporation Tax: £15,200 - £2,550 = £12,650
Effective rate: 20.81%

Company with £300,000 profit:

Above upper limit
Corporation Tax: £300,000 × 25% = £75,000

Payment Deadlines

Company Size	Payment Deadline
Small companies	9 months and 1 day after year-end
Large companies	Quarterly instalments

A company is "large" if its profits exceed £1.5 million (divided by associated companies).

Allowable Deductions

Reduce your Corporation Tax by claiming:

Staff salaries and benefits
Office costs and utilities
Travel expenses
Marketing and advertising
Professional fees
Training costs
Capital allowances on equipment
Research and Development credits

Tax Planning Strategies

Timing of expenses - Accelerate deductible expenses before year-end
Capital allowances - Claim Annual Investment Allowance (£1 million)
Pension contributions - Tax-deductible for the company
R&D tax credits - Enhanced relief for qualifying research

Filing Requirements

CT600 return - Due 12 months after accounting period ends
Accounts - Filed with Companies House within 9 months
Payment - 9 months and 1 day after accounting period ends

Calculate Your Corporation Tax

Use our Corporation Tax Calculator to estimate your company's tax bill including marginal relief.