How UK Corporation Tax Works: Rates and Marginal Relief
UK corporation tax is 19% up to £50,000 of profit and 25% from £250,000, with marginal relief tapering in between. Here's how it works.
The UK corporation tax bands
Corporation tax on company profits is tiered:
- Small profits rate (19%) — taxable profits up to £50,000.
- Main rate (25%) — taxable profits of £250,000 or more.
- Marginal relief — for profits between £50,000 and £250,000, an effective rate that tapers smoothly from 19% up to 25%.
The UK Corporation Tax Calculator applies the right band and the marginal relief automatically.
Why marginal relief exists
Without it, a company just over £50,000 would jump straight to 25% — a cliff edge. Marginal relief smooths the transition so the effective rate rises gradually across the band.
A quick example
A company with £100,000 taxable profit falls in the marginal band, so its effective rate sits between 19% and 25% — not a flat 25%. The calculator does the relief maths for you.
Watch for associated companies
The £50,000 and £250,000 limits are divided by the number of associated companies, which can push profits into a higher band. Factor that in before relying on an estimate.
How to use it
- Enter your company's taxable profit.
- The tool applies the band and marginal relief.
- Read off your estimated corporation tax.
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