For the year ended 31 March 2027 (the 2026/27 financial year for most UK companies), Corporation Tax is 19% on profits up to £50,000 (the small-profits rate), 25% on profits above £250,000 (the main rate), and a blended figure between using marginal relief. If your company has associated companies, those limits are divided equally between all of them.
- Small-profits rate: 19% on profits at or below £50,000.
- Main rate: 25% on profits above £250,000.
- Marginal relief applies between £50,001 and £250,000 — the effective rate rises gradually from 19% to 25%.
- The thresholds are divided by the number of associated companies (those under common control).
- Corporation Tax is due 9 months and 1 day after the accounting period ends for companies not paying by instalments.
- Directors' salaries and employer NI are deductible expenses before CT; dividends are not.
2026/27 Corporation Tax rates
| Annual profit | Rate | Notes |
|---|---|---|
| £0 to £50,000 | 19% | Small-profits rate |
| £50,001 to £250,000 | 19%–25% | Marginal relief — effective rate rises smoothly |
| Above £250,000 | 25% | Main rate |
How does marginal relief work?
The marginal relief formula is: CT = Profit × 25% − (Upper limit − Profit) × 3/200. For a single company with £100,000 profit: CT = £100,000 × 25% − (£250,000 − £100,000) × 3/200 = £25,000 − £2,250 = £22,750 (effective rate 22.75%).
Worked example — £80,000 profit, no associated companies
| Item | Amount |
|---|---|
| Profit before CT | £80,000 |
| CT at 25% | £20,000 |
| Marginal relief: (£250,000 − £80,000) × 3/200 | −£2,550 |
| CT payable | £17,450 |
| Effective rate | 21.8% |
| Post-tax profit available to distribute | £62,550 |
Frequently asked questions
When is Corporation Tax due?
9 months and 1 day after the end of the accounting period. For a 31 March 2027 year-end, CT is due by 1 January 2028 for most small companies. Large companies pay by quarterly instalments during the accounting period.
What counts as an associated company?
A company is associated with yours if it is under common control. For example, if you own two limited companies, each company's £50k/£250k threshold is halved to £25k/£125k. HMRC guidance covers the detail — get advice if you have a complex group structure.
Is a director's salary deductible before Corporation Tax?
Yes. A salary paid to a director is a business expense that reduces the company's profit subject to CT. Dividends are paid from post-CT profit and are not deductible.