Corporation Tax Calculator 2026/27 — Small Profits, Marginal Relief & Main Rate
Enter your company's taxable profit to calculate your corporation tax liability for 2026/27. The calculator shows your effective rate including marginal relief — and explains why the effective marginal rate is 26.5% between £50,000 and £250,000.
The three corporation tax rates for 2026/27
Corporation tax in the UK operates on a three-tier structure introduced in April 2023. Profits up to £50,000 are taxed at the small profits rate of 19% — the same flat rate that applied to all companies until 2023. Profits above £250,000 are taxed at the main rate of 25%. Between those limits, marginal relief applies: the effective rate tapers from 19% to 25% across the band, but with a critical quirk that catches many business owners off guard.
The 26.5% marginal trap — why this band is expensive
Within the £50,001–£250,000 band, each additional £1 of taxable profit attracts an effective marginal rate of 26.5% — higher than the 25% main rate itself. This happens because as profits rise, the marginal relief (which reduces the CT bill) simultaneously phases out. The maths: HMRC calculates CT as profits × 25% minus marginal relief. As profits increase, you pay 25p more tax per £1 but also lose 1.5p of relief, giving a net 26.5p per additional pound. This means a company with £200,000 profit may actually pay a higher marginal rate on its last pound of income than a company with £300,000 profit.
The practical implication: if your company is likely to land in the marginal relief band, consider whether making additional pension contributions, paying an increased director salary, or bringing forward capital expenditure before the year end could shift profits below £50,000 and reduce the effective CT rate to 19%. The CT calculator lets you test different profit levels to see the impact before committing.
Note that the £50,000 and £250,000 limits are divided by the number of associated companies — broadly, companies under common control. Two associated companies have limits of £25,000 and £125,000 respectively.
Company taxable profit
Tax year 2026/27 · Single company, no associated companies or related parties
2026/27 Corporation tax rates
| Taxable profits | Rate | Note |
|---|---|---|
| £0 – £50,000 | 19% | Small profits rate |
| £50,001 – £250,000 | 19–25% | Marginal relief · 26.5% marginal |
| Above £250,000 | 25% | Main rate |
Assumes single company with no associated companies. Does not include R&D relief, creative sector reliefs, or other reliefs. Consult a qualified adviser.
How this calculator works
- Small profits rate
- Profits up to £50,000 are taxed at 19%. This rate was reintroduced from April 2023 alongside the main rate increase to 25%.
- Marginal relief (£50,001–£250,000)
- Profits between £50,001 and £250,000 qualify for marginal relief. The effective marginal rate on profits in this band is 26.5% — because each £1 of profit both increases the tax at 25% and reduces the relief. CT = profit × 25% − (£250,000 − profit) × 1.5%.
- Main rate
- Profits above £250,000 are taxed at 25% in full with no relief. The effective rate is exactly 25%.
- Associated companies
- The £50,000 and £250,000 limits are divided by the number of associated companies (broadly, companies under common control). Two associated companies halve the limits to £25,000 and £125,000.
Frequently asked questions
What are the corporation tax rates for 2026/27?›
For 2026/27, the small profits rate is 19% (profits up to £50,000) and the main rate is 25% (profits above £250,000). Between these limits, marginal relief applies — the effective rate tapers from 19% to 25% across this band, with a marginal rate of 26.5% on profits within the band.
What is marginal relief and why is the marginal rate 26.5%?›
Marginal relief is a taper that smooths the step change between the 19% small profits rate and the 25% main rate. HMRC applies a relief formula: CT = profit × 25% − (250,000 − profit) × 1.5%. This means each additional £1 of profit in the £50,001–£250,000 band adds 26.5p in tax (25p at main rate minus 1.5p of relief that is lost). This creates an effective marginal rate of 26.5% in the relief band.
When is my corporation tax payment due?›
For companies with annual taxable profits below £1.5m, CT is due nine months and one day after the end of the accounting period. Larger companies pay in quarterly instalments. Interest is charged by HMRC on late payments.
Does corporation tax apply to all UK companies?›
UK-resident limited companies pay corporation tax on all worldwide profits. Non-resident companies pay CT on profits from UK permanent establishments. Sole traders and partnerships pay income tax, not corporation tax.
Can I reduce my corporation tax through salary and expenses?›
Yes. Director salary and employer NI contributions are deductible business expenses that reduce taxable profit. Genuine business expenses (equipment, travel, professional fees, etc.) are also deductible. However, HMRC applies the wholly and exclusively rule — costs must be incurred entirely for business purposes.
AccLedger prepares and files your CT600
AccLedger calculates your corporation tax, prepares iXBRL accounts, and submits your CT600 direct to HMRC. Track your CT liability throughout the year — no year-end surprises.
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