Answers · UK 2025/26
What is the corporation tax rate in the UK for 2026/27?
For 2026/27, the small profits rate is 19% on taxable profits up to £50,000. The main rate is 25% on profits above £250,000. Marginal relief applies between £50,000 and £250,000. These thresholds are divided between associated companies under common control.
Full answer
Corporation tax in the UK operates with two rates and a marginal relief band for profits in between. Rates for 2026/27: - Small Profits Rate: 19% on profits up to £50,000 - Main Rate: 25% on profits above £250,000 - Marginal Relief Band: profits between £50,000 and £250,000 attract an effective rate between 19% and 25%, applied using the marginal relief fraction. Marginal Relief calculation: - Marginal Relief Fraction: 3/200 - Additional tax reduction = (Upper Limit - profits) x (basic profits / augmented profits) x 3/200 - In practice, the effective rate in the marginal band is approximately 26.5% on the marginal profit (i.e., moving from £50,000 to £250,000 of profit costs 26.5p per extra £1 of profit due to the tapered relief withdrawal). Associated companies: - The £50,000 and £250,000 thresholds must be divided equally between all associated companies (companies under common control). - Two associated companies: £25,000 / £125,000 thresholds. - Three: £16,667 / £83,333 thresholds. - Associated companies rules also include overseas companies under common control. Key planning considerations: - Dividends and remuneration mix: directors of owner-managed companies must weigh corporation tax rates against income tax and NI on salary vs. dividends. - R&D credits, Annual Investment Allowance, and Full Expensing reduce taxable profits before applying the rate. Payment deadlines: - Small companies: 9 months and 1 day after the accounting period end. - Large companies (profits over £1.5m): quarterly instalments (in advance of the period end).
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.