UK Corporation Tax Calculator
Calculate your company's Corporation Tax liability, including marginal relief. Updated for 2025/2026.
Enter your profit before tax for a 12-month accounting period.
Ready to Calculate
Enter your income and details on the left to see a detailed breakdown of your tax liability and take-home pay.
Frequently Asked Questions
How to use this calculator
1. Enter your company's taxable profit for the accounting period.
2. The calculator will automatically apply the correct main rate (25%), small profits rate (19%), or calculate marginal relief if your profits are between £50,000 and £250,000.
3. View your total Corporation Tax due, your net profit after tax, and your effective tax rate.
Understanding your results
Taxable Profit: Your company's income minus allowable business expenses.
Corporation Tax: The amount you owe to HMRC. For profits under £50,000, the rate is 19%. For profits over £250,000, the rate is 25%. For profits in between, a marginal relief calculation is applied, smoothing the transition between the two rates.
Net Profit: The profit remaining in the company after Corporation Tax has been deducted. This can be retained in the business or distributed as dividends.
Effective Tax Rate: The actual percentage of your profit that is paid in tax.
A Complete Guide to UK Corporation Tax
If you run your business as a limited company, you must pay Corporation Tax on any profits your company makes. Unlike sole traders who pay Income Tax on their business profits, limited companies are separate legal entities and are taxed differently. Understanding how Corporation Tax works is essential for effective financial planning and ensuring compliance with HMRC.
What is Corporation Tax?
Corporation Tax is a tax levied on the taxable profits of limited companies and some other organisations (like clubs and societies) operating in the UK. It is calculated annually based on the company's accounting period.
Corporation Tax Rates for 2025/2026
The UK government recently introduced a tiered system for Corporation Tax, moving away from a single flat rate. The rate your company pays now depends on its level of profit:
- Small Profits Rate (19%): This rate applies to companies with taxable profits of £50,000 or less.
- Main Rate (25%): This rate applies to companies with taxable profits over £250,000.
- Marginal Relief: If your company's profits fall between £50,000 and £250,000, you will pay the main rate of 25%, but this will be reduced by Marginal Relief. This creates a sliding scale, resulting in an effective tax rate somewhere between 19% and 25%.
Note: These thresholds are proportionally reduced if your accounting period is shorter than 12 months or if you have 'associated companies' (other companies under common control).
How to Calculate Taxable Profit
Corporation Tax is not paid on your total revenue; it is paid on your taxable profit. To calculate this, you start with your company's total income and deduct all 'allowable expenses'.
Allowable expenses are costs incurred wholly and exclusively for the purposes of the business. Common examples include:
- Employee salaries and employer's National Insurance
- Office rent, utilities, and insurance
- Cost of goods sold (stock and raw materials)
- Advertising and marketing costs
- Accountancy and legal fees
It is important to note that dividends paid to shareholders are not an allowable expense and cannot be deducted before calculating Corporation Tax.
Capital Allowances
When you buy assets for your business, such as machinery, equipment, or business vehicles, you cannot deduct the full cost as a standard expense. Instead, you claim Capital Allowances. These allow you to deduct a proportion of the asset's value from your taxable profits each year. The Annual Investment Allowance (AIA) often allows you to deduct the full cost of qualifying items in the year of purchase, up to a specified limit.
Deadlines for Filing and Payment
There are two crucial deadlines you must meet regarding Corporation Tax:
- Payment Deadline: For most companies with taxable profits up to £1.5 million, the Corporation Tax bill must be paid 9 months and 1 day after the end of the accounting period.
- Filing Deadline: You must file your Company Tax Return (CT600) within 12 months of the end of your accounting period.
Missing these deadlines can result in significant penalties and interest charges from HMRC.