How much Corporation Tax Marginal Relief applies to £60,000 profit in 2026/27?

Full answer

Marginal Relief bridges the gap between the 19% small profits rate (profits up to £50,000) and the 25% main rate (profits above £250,000), so companies just above the £50,000 lower limit are not hit with the full main rate straight away. The formula is Marginal Relief = (Upper Limit minus profit) multiplied by the marginal relief fraction of 3/200, assuming augmented profits equal net profit with no franked investment income from other companies. On £60,000 profit: Marginal Relief = (£250,000 minus £60,000) times 3/200 = £190,000 times 0.015 = £2,850. Corporation Tax is first calculated at the full 25% main rate on the whole £60,000, giving £15,000, and Marginal Relief is then deducted: £15,000 minus £2,850 = £12,150 payable. That works out at an effective rate of 20.25% (£12,150 divided by £60,000), only just above the 19% small profits rate, because £60,000 sits close to the £50,000 lower limit where relief is at its most generous. As profits rise toward £250,000, the relief shrinks and the effective rate climbs steadily toward the full 25%. Companies with associated companies must divide both the £50,000 and £250,000 limits by the number of associates, which can push a £60,000-profit company into the main rate band entirely if it has several associated companies. Use the Corporation Tax calculator to check your exact Marginal Relief.

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