Calculate Corporation Tax for UK limited companies for 2025/26.
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Updated for the 2025/26 UK tax year.
About the Corporation Tax Calculator
Corporation Tax (CT) is the tax UK limited companies pay on their taxable profits — trading profits, investment income, and chargeable gains, after deducting allowable expenses, capital allowances, and any reliefs. For 2025/26 the headline structure is unchanged from 2024/25: 25% main rate on profits over £250,000, 19% small profits rate for profits up to £50,000, and a marginal relief sliding scale producing effective rates between 19% and 25% on profits between £50,000 and £250,000.
This calculator handles the marginal relief calculation precisely. The standard fraction for 2025/26 is 3/200 (giving a 26.5% marginal rate of tax on profits in the £50,000-£250,000 band — yes, higher than 25%, because every pound in this band withdraws a slice of the small profits benefit). For a profit of £100,000 the effective rate is approximately 23.5%; for £200,000 it is approximately 24.65%. The thresholds reduce proportionally if the company has associated companies (under common control) — two associates share £25,000/£125,000 each, dragging more companies into the 25% main rate.
Corporation Tax is UK-wide — there is no devolution. Welsh, Scottish and Northern Irish companies follow the same rates (though Northern Ireland has historically explored devolved CT). Payment is due 9 months and 1 day after the accounting period end for companies under £1.5m profits; larger companies pay quarterly instalments. The CT600 return is due 12 months after period end, although in practice most companies file at the same time as paying.
Key reliefs reduce the bill: the Annual Investment Allowance gives 100% relief on the first £1m of qualifying plant and machinery; full expensing makes that permanent for new equipment from April 2026; R&D tax relief (now mostly the merged RDEC at 20% above the line — net benefit ~15-16%, see our R&D calculator); Patent Box at 10% on profits from patented inventions; group relief on losses between 75%-owned group companies. The calculator does not model these reliefs in detail — input your taxable profit AFTER reliefs to get the right CT figure. Dividends paid to shareholders are not deductible (they come out of post-tax profit), but director salaries and pension contributions are — the basis of most owner-managed-company tax planning.
How to use this calculator
1
Enter taxable profit
Type the company’s profit chargeable to Corporation Tax — accounting profit adjusted for non-deductible expenses, capital allowances, and any R&D or other reliefs already claimed.
2
Enter associated companies
Count any companies under common control (≥51% shared ownership). Each associate divides the £50,000/£250,000 thresholds proportionally, so two associates share £25,000/£125,000 each.
3
Pick the accounting period
If your period straddles 1 April (where rates can change), the calculator pro-rates the thresholds and rates accordingly. Most period ends use the rates that apply during the period.
4
See the breakdown
View the small profits portion (19%), the main rate portion (25%), and the marginal relief deducted. The effective rate column shows what proportion of profit ends up as CT.
5
Plan the salary/dividend split
Compare retaining profit (pay 19%-25% CT) versus paying dividends (extra 8.75%-39.35% personal tax). Optimum split depends on personal income, ISA / pension headroom and Corporation Tax position.
Common mistakes to avoid
!Forgetting that the Personal Allowance tapers at £1 per £2 above £100,000 income — creates 60% effective marginal rate up to £125,140 (67.5% in Scotland).
!Not adding student loan repayment — adds 9% (Plans 1/2/4/5) or 6% (Postgrad) above the plan-specific threshold on top of tax + NI.
!Assuming Scottish bands match rUK — Scotland has 6 bands (19/20/21/42/45/48%) with the higher rate kicking in at £43,663 (not £50,270).
!Using gross figures for pension contributions when sacrificed via payroll — salary sacrifice reduces taxable income at source, simplifying the maths.
The main Corporation Tax rate is 25% for profits over £250,000. The small profits rate is 19% for profits up to £50,000. Marginal relief applies for profits between £50,000 and £250,000.
What is Marginal Relief?
Marginal Relief reduces the effective rate of Corporation Tax for companies with profits between £50,000 and £250,000. It gradually increases the rate from 19% to 25%.
When is Corporation Tax due?
For companies with profits up to £1.5 million, CT is due 9 months and 1 day after the accounting period ends. Larger companies pay quarterly instalments based on estimated current-year profits. The CT600 return itself must be filed within 12 months of the period end. Late payment triggers interest at the HMRC rate; late filing triggers escalating penalties from £100.
How do associated companies affect CT?
The £50,000 small profits and £250,000 main rate thresholds are divided by the number of associated companies (those under common 51%+ control). Two associates share £25,000 and £125,000 each, three share £16,667 and £83,333 etc. This can drag smaller companies into the marginal relief band or 25% main rate. Dormant companies generally do not count.
Is Corporation Tax different in Scotland or Wales?
No. Corporation Tax is a reserved tax controlled by Westminster, so rates and thresholds are identical across England, Scotland, Wales and Northern Ireland. Northern Ireland was given legislative power to set its own rate, but this has not been activated. So a Scottish-registered company pays the same CT as an English one on equivalent profits.
Can I deduct director salary against Corporation Tax?
Yes — director salaries are an allowable expense against trading profit, provided they reflect genuine work and are reasonable in amount. Employer NI on the salary is also deductible. Dividends are NOT deductible — they are paid from post-tax profit. This asymmetry shapes most owner-managed company tax planning, alongside pension contributions which are also deductible.
What is the Annual Investment Allowance?
The AIA gives 100% tax relief on the first £1 million of qualifying plant and machinery purchases each year. Most business equipment qualifies — computers, vans, machinery, fixtures and fittings, integral building features. Cars usually do not qualify but new electric and zero-emission cars get 100% first-year allowance separately. Full expensing (permanent from April 2026) extends 100% relief on most new equipment.
How are losses treated?
Trading losses can be carried back 12 months against the previous period's profits (for a refund), set against other current-year income, or carried forward to offset future trading profits indefinitely. Group relief allows losses to be surrendered between 75%-owned group companies. From April 2017 a 50% restriction applies to carried-forward losses above £5 million per group.
Does R&D tax relief reduce my CT bill?
Yes. Most companies now claim under the merged RDEC scheme — a 20% above-the-line credit on qualifying R&D expenditure, which itself is taxable at corporation tax, giving a net benefit of around 15-16% of R&D spend. Loss-making R&D-intensive SMEs (≥30% of total spend on R&D) get a 14.5% payable cash credit under ERIS. See the R&D Tax Relief calculator.
How do dividends affect my Corporation Tax bill?
They do not. Dividends are paid from post-tax profit, so they have no impact on the Corporation Tax calculation. The company pays CT on full taxable profit; only then can dividends be declared from the post-tax reserves. This is why salary (deductible against CT) and dividends (post-CT) need to be compared on a total tax cost basis when planning director remuneration.