How much is Corporation Tax in 2026?

Full answer

For the 2026 financial year, UK Corporation Tax has two main rates. The small profits rate of 19% applies to companies with profits up to £50,000. The main rate of 25% applies to profits above £250,000. Between £50,000 and £250,000, Marginal Relief smooths the jump, so the effective rate rises gradually from 19% toward 25% — but the marginal rate on each extra pound of profit in this band is 26.5%, higher than the headline 25%. These profit limits are divided by the number of associated companies, so groups with multiple companies hit the higher rate sooner. Worked example: a company with £100,000 of taxable profit pays the 25% main rate less Marginal Relief. The relief calculation gives roughly £22,750 of tax, an effective rate of about 22.75%. A company at exactly £50,000 pays 19% = £9,500, while one at £250,000 or above pays the full 25%. Worth noting is the steep marginal cost: increasing profit from £50,000 to £100,000 adds £50,000 of profit but £13,250 of tax (26.5%), which is why directors often time capital expenditure or pension contributions to manage the band. Corporation Tax is due nine months and one day after the accounting period ends for most companies, with very large companies paying in instalments. Dividends paid to shareholders are not deductible. Use the Corporation Tax calculator to estimate your liability and the Dividend Tax calculator for profit extraction.

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