How much Corporation Tax Marginal Relief applies to £90,000 profit in 2026/27?

Full answer

Marginal Relief reduces the Corporation Tax bill for companies with profits between the £50,000 lower limit and £250,000 upper limit, so they do not jump straight from the 19% small profits rate to the full 25% main rate. The formula is Marginal Relief = (Upper Limit minus profit) multiplied by the marginal relief fraction of 3/200. On £90,000 profit: Marginal Relief = (£250,000 minus £90,000) times 3/200 = £160,000 times 0.015 = £2,400. Corporation Tax is first calculated at the full 25% main rate on the whole £90,000, giving £22,500, and Marginal Relief is then deducted: £22,500 minus £2,400 = £20,100 payable. That works out at an effective rate of 22.33% (£20,100 divided by £90,000) -- noticeably higher than the 20.25% effective rate at £60,000 profit, showing how the relief tapers off as profits climb through the marginal band. A company at £90,000 profit is roughly a third of the way through the £50,000-to-£250,000 marginal band, so the effective rate sits comfortably between the 19% and 25% extremes. As with all Marginal Relief calculations, the £50,000 and £250,000 limits are shared and divided between any associated companies under common control, which reduces the relief available and can push the effective rate higher for group structures. Use the Corporation Tax calculator to see your exact Marginal Relief and effective rate.

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