Corporation Tax Calculator

Corporation Tax is charged on the taxable profits of UK limited companies and some other organisations. Since April 2023, the rate structure depends on the level of profits: companies with profits up to £50,000 pay the small profits rate of 19%, while those with profits above £250,000 pay the main rate of 25%. Companies in between benefit from marginal relief, which tapers the effective rate between 19% and 25%.

Marginal Relief

Marginal relief is a tapering mechanism that prevents a sharp jump in tax as profits cross the £50,000 lower limit. The relief is calculated as 3/200 × (upper limit − augmented profits) × (trading profits ÷ augmented profits). The practical effect is an effective marginal rate of 26.5% for each additional pound of profit within the £50,000–£250,000 band. This means a company with profits of £100,000 pays more tax per pound than one with profits of £300,000 — a quirk worth planning around.

Associated Companies

The profit limits are divided equally among associated companies. If you control two companies, each faces a lower limit of £25,000 and an upper limit of £125,000. Association is determined by common control — including control through connected persons and certain business partners. Dormant companies are generally excluded. Getting the associated company count wrong is one of the most common Corporation Tax errors, as it can push a company unexpectedly into the marginal relief band or main rate.

Short Accounting Periods

If a company's accounting period is less than 12 months — for example, on incorporation or when changing year-end — the profit limits are scaled down proportionally. A 9-month accounting period has limits of £37,500 and £187,500. The tax is calculated on the actual profits of the period, not annualised figures. Companies must file a CT600 for each accounting period, even if it overlaps with a financial year.

CT600 filing deadline: The Corporation Tax return (CT600) must be filed online with HMRC within 12 months of the end of the accounting period. Late filing attracts automatic penalties starting at £100, rising to £1,000 for delays beyond 12 months.

Payment deadline: Corporation Tax is due 9 months and 1 day after the accounting period end. Interest accrues from that date on any unpaid amount. For a company with a 31 March year-end, tax on 2025-26 profits is due by 1 January 2027.

Quarterly instalment payments (QIPs): Large companies with profits exceeding £1.5 million must pay Corporation Tax in four quarterly instalments during the accounting period — not after it ends. Very large companies (profits over £20 million) must pay even earlier. Our calculator flags if QIPs may apply based on your profit level.

Annual Investment Allowance (AIA): The AIA allows businesses to deduct the full cost of qualifying plant and machinery (up to £1 million per year) in the year of purchase, reducing taxable profits. AIA is not modelled in this calculator — enter your already-adjusted taxable profit figure. See the capital allowances rates for the AIA, full expensing, the 40% first-year allowance and the writing down allowance rates that apply to the rest.