How much Corporation Tax do I pay on £250,000 of company profit?

Full answer

UK Corporation Tax for 2026/27 has a small profits rate of 19% on profits up to £50,000 and a main rate of 25% on profits of £250,000 or more, with marginal relief applying to profits in between. At exactly £250,000, you are at the upper boundary of the marginal relief band, so the marginal relief calculation gives 3/200 x (£250,000 - £250,000) = 3/200 x £0 = £0. Tax is therefore simply £250,000 x 25% = £62,500, an effective rate of exactly 25%, with no relief applied. This is the highest effective rate a company in the marginal relief band can reach -- profits above £250,000 are also taxed at 25% flat, so £250,000 marks the point where the effective rate stops rising and flattens out at the main rate for all higher profit levels. Companies whose profits fluctuate around this threshold from year to year should be aware that even a small increase in profit above £250,000 does not push the whole amount into a higher band (there is no cliff-edge), since 25% already applies at exactly £250,000. The £250,000 threshold is reduced if the company has associated companies under common control or a short accounting period. Corporation tax is due nine months and one day after the end of the accounting period. Use the Corporation Tax calculator to check profits near this threshold.

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More answers

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