Corporation Tax Calculator
Work out your limited company's tax bill in seconds with this free corporation tax calculator. It includes marginal relief and uses current HMRC rates.
- 19%up to £50,000
- 25%over £250,000
- Reliefin between
- Effective tax rate
- 22.75%
- Tax on the next £1
- 26.5%
- Marginal relief
- £2,250.00
- Augmented profits
- –
- Profit after tax
- £77,250.00
- Pay HMRC by
- –
- File your return by
- –
Tested against ACCA's published worked examples · Rates checked 1 November 2026 · Not affiliated with HMRC · How we calculate
Year-end planner
What if you spend more on allowable costs, such as equipment or pension contributions, before your year end?
Tax saved£1,325
Only spend money the business actually needs. Tax relief makes it cheaper, not free.
Your effective corporation tax rate
How the rate changes as profit grows, with your company marked.
- Effective rate
- Marginal relief band: 26.5p tax on each extra £1
- Your company
Saved scenarios
| Scenario | Profit | Period | Associates | Corporation tax | Effective rate | Profit after tax | Remove |
|---|
Enter your taxable profit, pick the financial year and the bill appears straight away. Directors use this limited company tax calculator to plan before their year end, and bookkeepers use it to sanity-check a figure before it goes on a return. It also gets the awkward cases right: marginal relief, associated companies, short accounting periods and periods that run over 1 April.
What your result means
Your effective rate is the tax divided by your profit. At £100,000 of profit it's 22.75%, and that's the figure most directors mean when they say what they "pay".
The more useful number is the tax on your next £1. Between £50,000 and £250,000 it's 26.5%, higher than the 25% main rate, because each extra pound of profit also loses you some marginal relief. Turn that round and every £1 of allowable spending in that band saves 26.5p. Keep it in mind before you decide on a bonus, a pension contribution or new equipment near your year end.
Profit after tax is the most you can pay out as dividends, and you'll pay personal tax on those as well. Our dividend tax calculator works out that part, and the salary vs dividend calculator compares the two ways of paying yourself.
How much is corporation tax? (2026/27 rates)
Corporation tax is the tax a UK limited company pays on its profits, and HM Revenue and Customs (HMRC) collects it. It's charged on trading profits, investment income and gains from selling assets, after allowable expenses and capital allowances. Sole traders and partnerships don't pay it. Their profits go through Self Assessment and are taxed as income.
The rate depends on how much profit the company makes in its accounting period. It's 19% up to £50,000 and 25% above £250,000. In between, you pay 25% and take off marginal relief, so the rate climbs smoothly instead of jumping.
| Financial year | Up to £50,000 | In between | Over £250,000 |
|---|---|---|---|
| 2026/27 | 19% | 25% − relief | 25% |
| 2025/26 | 19% | 25% − relief | 25% |
| 2024/25 | 19% | 25% − relief | 25% |
| 2023/24 | 19% | 25% − relief | 25% |
| 2022/23 | 19% on all profits | ||
| 2021/22 | 19% on all profits | ||
| 2020/21 | 19% on all profits | ||
The rates haven't changed since 1 April 2023. Before then every company paid 19%, however much it made. Corporation tax years start on 1 April, not 6 April like personal tax, so if your accounting period runs over 31 March the profit is split between the two years by days.
How is corporation tax calculated?
You can check any figure from the calculator by hand. Find your taxable profit, see which band it falls in, and if it's in the middle band, take off marginal relief. That last step is the only fiddly part.
- 1
Work out taxable profits
Start with trading profit, take off allowable expenses and capital allowances, then add any investment income and chargeable gains. If you're looking at your sales figure, you're looking at the wrong number.
- 2
Check the band
Up to £50,000: profits × 19%. Over £250,000: profits × 25%. Between the two: profits × 25% − marginal relief.
- 3
Work out marginal relief
Marginal relief = 3/200 × (£250,000 − your profits). HMRC calls 3/200 the standard fraction. If the company received dividends from companies outside its group, add them to profit to get augmented profits, and use the full formula: 3/200 × (upper limit − augmented profits) × (taxable profits ÷ augmented profits).
Worked example · Northfield Design Ltd
Profit of £40,000
A one-person design company made £40,000 of taxable profit in 2026/27. That's under the £50,000 lower limit, so it pays the small profits rate: £40,000 × 19% = £7,600.
Worked example · Harbour Engineering Ltd
Profit of £100,000
A small engineering firm made £100,000. At the main rate that's £100,000 × 25% = £25,000. Marginal relief is 3/200 × (£250,000 − £100,000) = £2,250, so the bill is £22,750, an effective rate of 22.75%.
Corporation tax at different profit levels (2026/27)
| Taxable profits | Corporation tax | Effective rate | Profit after tax |
|---|---|---|---|
| £10,000 | £1,900 | 19% | £8,100 |
| £25,000 | £4,750 | 19% | £20,250 |
| £50,000 | £9,500 | 19% | £40,500 |
| £75,000 | £16,125 | 21.5% | £58,875 |
| £100,000 | £22,750 | 22.75% | £77,250 |
| £150,000 | £36,000 | 24% | £114,000 |
| £200,000 | £49,250 | 24.63% | £150,750 |
| £250,000 | £62,500 | 25% | £187,500 |
| £300,000 | £75,000 | 25% | £225,000 |
These figures assume a 12-month accounting period, no associated companies and no dividends received. For anything else, use the calculator at the top of the page.
Limited company tax: associated companies and short accounting periods
The £50,000 and £250,000 limits are for one company over a full year. If you share them with associated companies, or your accounting period is shorter than 12 months, they shrink. Plenty of quick calculators ignore this, which is how directors end up underestimating their bill.
Associated companies
Two companies are associated if one controls the other, or the same person or group controls both, at any point in the accounting period. A common example is a director who owns a trading company and a separate property or holding company. Dormant companies don't count. To find your limits, divide both by the number of associated companies plus one:
| Associated companies | Lower limit | Upper limit |
|---|---|---|
| 0 | £50,000 | £250,000 |
| 1 | £25,000 | £125,000 |
| 2 | £16,667 | £83,333 |
| 3 | £12,500 | £62,500 |
Say you make £100,000 profit and have one associated company. Your limits become £25,000 and £125,000. Marginal relief is 3/200 × (£125,000 − £100,000) = £375, so the company pays £24,625. That's £1,875 more than the same company would pay on its own.
Short accounting periods
For a period shorter than 12 months, the limits are cut in proportion: multiply each one by the number of days in the period, then divide by 365.
Take a 183-day period from 1 April to 30 September 2026 with £40,000 profit. The limits drop to £25,068.49 and £125,342.47. £40,000 would sit comfortably under the full-year limit, but here it lands in the marginal relief band: £10,000.00 − £1,280.14 = £8,719.86.
A corporation tax accounting period can never be longer than 12 months. If your accounts cover more, they're split into two periods: the first 12 months, then whatever is left.
Marginal relief explained
Marginal relief stops the rate jumping straight from 19% to 25% at £50,000. The catch is that inside the band each extra £1 of profit is taxed at 26.5%: 25p of tax plus 1.5p of relief you lose. Our marginal relief calculator shows that working on its own.
Who can claim it
Any UK resident company with profits between the limits can claim marginal relief, on its Company Tax Return. It isn't available to non-UK resident companies or close investment-holding companies, or once augmented profits go over the upper limit. HMRC won't add it for you, so check it's on your return.
New company? Your first accounting period
Companies House sets a new company's accounting reference date as the last day of the month it was formed in. The first accounts run from the day of incorporation to that date a year later, so they usually cover more than 12 months. A corporation tax period can't, so the accounts are split in two: the first 12 months, then the rest. Each part gets its own calculation, limits, payment date and Company Tax Return.
Worked example · Bluebell Studio Ltd
Accounts from 1 July 2025 to 31 July 2026 (396 days), profit £60,000
The profit is split between the two corporation tax periods by days. The second period is only 31 days long, so its limits shrink to £4,247 and £21,233.
| Corporation tax period | Days | Profit | Corporation tax | Pay by | File return by |
|---|---|---|---|---|---|
| 1 Jul 2025 – 30 Jun 2026 | 365 | £55,303.03 | £10,905.30 | 1 Apr 2027 | 30 Jun 2027 |
| 1 Jul 2026 – 31 Jul 2026 | 31 | £4,696.97 | £926.20 | 1 May 2027 | 31 Jul 2027 |
| Total | 396 | £60,000.00 | £11,831.50 | Two payments, two returns | |
If you treated all 396 days as one year, you'd get £12,150.00. That's £318.50 too much, and it misses the second payment and return completely. To check each part yourself, tick Advanced in the calculator and enter each period's dates and profit.
In practice, trading profits are split by days, while capital allowances and some other items are worked out for each period separately. A company's first corporation tax period usually starts when it begins trading, not on the day it's incorporated.
Registering, paying and filing corporation tax
Register within 3 months of starting to trade
Once the company is set up at Companies House, HMRC posts a 10-digit Unique Taxpayer Reference (UTR) to the registered office. From the day the company starts doing business, which includes buying, selling, advertising or taking on staff, you have 3 months to register for corporation tax.
Pay first, then file
It catches a lot of people out, but the tax is due before the return. You pay 9 months and 1 day after the accounting period ends, and the Company Tax Return (CT600) is due 12 months after it ends. Companies with profits over £1.5 million pay in quarterly instalments instead, and that threshold is shared between associated companies too.
Penalties for a late Company Tax Return
| Time after the deadline | Penalty |
|---|---|
| 1 day | £200 |
| 3 months | Another £200 |
| 6 months | HMRC estimates your tax and adds 10% of the unpaid tax |
| 12 months | Another 10% of any unpaid tax |
If your return is late 3 times in a row, each £200 penalty becomes £1,000. Late tax is a separate problem: HMRC charges interest on it from the day after it was due.
What this corporation tax calculator covers
- Small profits rate, main rate and marginal relief
- Associated companies sharing the limits
- Accounting periods shorter than 12 months
- Periods that span two financial years, including the switch on 1 April 2023
- Dividends received from non-group companies (augmented profits)
- Every financial year back to 2020/21, with new rates added each April
What it doesn't cover
- Working out your taxable profit, such as capital allowances and disallowed expenses
- Trading losses, which can be carried back to the previous year or forward against future profits
- Group relief, where losses are shared between companies in the same group
- R&D relief, Patent Box and other special reliefs
- Close investment-holding companies and non-UK resident companies
- Quarterly instalment payments for large companies
- Ring fence profits from UK oil and gas extraction, which are taxed at different rates
Common mistakes
Using turnover instead of profit
Corporation tax is charged on profit after allowable expenses, never on sales. If you only have turnover and costs to hand, switch the calculator to Turnover & expenses.
Forgetting associated companies
One other active company under the same control halves your limits. On £100,000 of profit that adds £1,875 to the bill.
Assuming the first period is 12 months
First accounts that run over 12 months become two tax periods, so you make two payments and file two returns.
Mixing up the tax years
Corporation tax years run from 1 April to 31 March. The 6 April tax year is for personal taxes, such as income tax and tax on your dividends.
Not claiming marginal relief
HMRC doesn't apply it for you. You claim it on the Company Tax Return (CT600), so if your profit is between the limits, check your return or software has included it.
Waiting for the return deadline to pay
The tax is due 3 months before the return. Pay late and HMRC charges interest. File late and there's a £200 penalty from day one.
How to reduce corporation tax
There's no clever trick here. You lower the bill by claiming every allowable cost and relief, and by timing spending sensibly. If your profit is in the marginal relief band, each £1 of deductible spending saves 26.5p rather than 25p, so try a few figures in the year-end planner above before the year closes.
Claim all allowable expenses
If a cost is wholly and exclusively for the business, it comes off your profit. Software, insurance, accountancy fees and business travel all count.
Use capital allowances
The Annual Investment Allowance lets you deduct the full cost of most equipment, machinery and computers in the year you buy them, up to £1 million a year. For bigger purchases, full expensing gives companies a 100% deduction on new main rate plant and machinery, with no cap.
Employer pension contributions
Pension contributions the company pays for a director are usually an allowable expense, so they reduce profit before tax rather than coming out of it.
Get the salary and dividend mix right
Salary comes off the company's profit and dividends don't. Many directors take a small salary and the rest as dividends. Our salary vs dividend calculator shows what that mix means for you.
Check for R&D tax relief
If the company develops new products, processes or software and solves technical problems along the way, it may qualify. It's worth asking your accountant.
When to pay
Pay 9 months and 1 day after your period ends and file within 12 months. Our guide to corporation tax deadlines has a deadline finder for any year end.
This is general information, not tax advice. Speak to an accountant before you act on any of it.
Frequently asked questions
Quick answers about UK corporation tax for limited companies.
How much corporation tax do I pay?
It depends on your taxable profit. Up to £50,000 you pay 19%, over £250,000 you pay 25%, and in between you pay 25% minus marginal relief. A company with £100,000 of profit, for example, pays £22,750. Put your own figures into the calculator above for your exact bill.
How much corporation tax is due on £50,000 profit?
For 2026/27, a company with £50,000 of taxable profit pays £9,500 in corporation tax. £50,000 is exactly the lower limit, so the whole lot is taxed at the small profits rate of 19%. Go a pound over and that pound is taxed at 26.5%, and so is every pound after it until profit reaches £250,000. This assumes a 12-month accounting period and no associated companies.
How much corporation tax is due on £100,000 profit?
For 2026/27, a company with £100,000 of taxable profit pays £22,750, an effective rate of 22.75%. That's £25,000 at the 25% main rate, less £2,250 of marginal relief. This assumes a 12-month accounting period and no associated companies.
Who can claim marginal relief?
UK resident companies with taxable profits between £50,000 and £250,000 can claim it. Those limits are lower for accounting periods under 12 months and are shared with any associated companies. You can't claim if the company isn't UK resident, is a close investment-holding company, or has augmented profits (profit plus dividends from companies outside its group) above the upper limit. You claim it on the Company Tax Return (CT600).
How much is corporation tax for a limited company?
Every UK limited company pays the same rates, whatever its size or industry: 19% up to £50,000 of profit and 25% above £250,000, with marginal relief in between. What changes from company to company is the limits. They are lower if you have associated companies or a short accounting period, and the calculator above adjusts for both.
Do you pay corporation tax on dividends?
Dividends the company pays out don't reduce its corporation tax. They come out of profit that has already been taxed, and the shareholder then pays dividend tax on them. Dividends the company receives from other UK companies are usually exempt, but if they come from outside its group they count towards augmented profits and can push it into a higher band.
Do sole traders pay corporation tax?
No. Corporation tax is for limited companies and some other organisations, such as clubs and co-operatives. Sole traders pay Income Tax and National Insurance on their profits through Self Assessment.
Is this the same as the HMRC corporation tax calculator?
No. We are independent and have no connection to HMRC. The calculator uses the rates, limits and marginal relief rules HMRC publishes on gov.uk, and it shows every step of the working so you can check the answer yourself.
Is corporation tax the same as corporate tax?
Yes. The official UK name is corporation tax, but you will also hear corporate tax, company tax or corp tax. They all mean the tax a limited company pays on its profits.
What do you pay corporation tax on?
On taxable profit, never on turnover. That means trading profit after allowable expenses and capital allowances, plus any investment income and gains from selling assets such as property or shares.
When do I need to register for corporation tax?
Within 3 months of the company starting to do business, which includes buying, selling, advertising or taking on staff. You will need the 10-digit Unique Taxpayer Reference (UTR) that HMRC posts to the registered office after the company is set up at Companies House.
When do I pay corporation tax and file my return?
The tax is due 9 months and 1 day after your accounting period ends. The Company Tax Return (CT600) is due 12 months after it ends, so you pay before you file. For a year ending 31 March 2027, that means paying by 1 January 2028 and filing by 31 March 2028. Companies with profits over £1.5 million pay in quarterly instalments instead.
How do I pay corporation tax?
Online, by bank transfer, Direct Debit or corporate debit card. Quote your 17-character corporation tax payment reference, which you can find in your HMRC online account or on the payslip HMRC sends. The reference changes for each accounting period, so don't reuse last year's.
What happens if I pay corporation tax or file my return late?
Late tax and late returns are dealt with separately. On late tax, HMRC charges interest from the day after the deadline. A late return gets a £200 penalty after 1 day and another £200 after 3 months. At 6 months HMRC estimates your bill and adds 10% of the unpaid tax, then another 10% at 12 months. Be late 3 times in a row and each £200 penalty becomes £1,000.
Can I calculate corporation tax for earlier years?
Yes, back to 2020/21. Before 1 April 2023 every company paid a flat 19% and there was no marginal relief. If your accounting period runs over 1 April 2023, tick Advanced and enter your dates. The calculator splits the profit between the old and new rates by days.
Do dormant companies pay corporation tax?
No. A company that isn't trading and has no income is usually dormant for corporation tax, so there's nothing to pay. You may still need to tell HMRC, and you still have to file accounts with Companies House. Dormant companies don't count as associated companies either.
Is corporation tax the same in Scotland, Wales and Northern Ireland?
Yes. The same corporation tax rates, limits and marginal relief apply to companies across the whole of the UK.
Can I use this result to file my company tax return?
Use it as an estimate and a check, not as the return itself. The Company Tax Return (CT600) has to be based on your final accounts and a full tax computation, with adjustments for things like capital allowances and losses. Most directors file through accounting software or an accountant.
Related calculators
Other free calculators for limited companies and their directors:
Software engineer with 10 years of experience, including building loan management software for a UK alternative lender.
Last updated 2 November 2026 · Rates checked against gov.uk on 1 November 2026 · LinkedIn (opens in new tab)
- Corporation Tax rates and allowances – gov.uk (opens in new tab)
- Marginal Relief for Corporation Tax – gov.uk (opens in new tab)
- Corporation Tax main rate 2020 and 2021 – gov.uk (opens in new tab)
This calculator gives estimates for guidance only and is not tax advice. Business Tax Calc is independent and not affiliated with HMRC. See our methodology for how calculations are made and tested.