Corporation Tax · 2025/26
Corporation Tax on £100,000 Profit — UK 2025/26
A standalone UK company with £100,000 of taxable profit for the 2025/26 financial year pays £22,750 in corporation tax — an effective rate of 22.75%. This profit sits in the marginal-relief band (19% → 25%).
Calculation Breakdown
How UK corporation tax works in 2025/26
From April 2023, UK corporation tax has operated under a tiered structure. Companies with taxable profits up to £50,000 pay the small-profits rate of 19%. Companies with profits at or above £250,000 pay the main rate of 25% on every pound. Between those two limits the company pays the main rate but then deducts marginal relief, calculated as (Upper Limit − Profit) × 3/200. This produces a smooth effective curve from 19% to 25% across the £200,000 marginal band.
For £100,000 of profit specifically, the company falls in the marginal-relief band (19% → 25%). Marginal relief reduces the headline £25,000 bill by £2,250, leaving £22,750 payable. Within the marginal band, every extra £1 of profit attracts roughly 26.5p of tax — the highest effective marginal rate in the corporation tax system.
Corporation tax is paid nine months and one day after the company's accounting period ends for small and medium companies; very large companies pay in quarterly instalments. Profits can be reduced by capital allowances (including the 100% Full Expensing relief for qualifying plant and machinery), R&D tax relief, group relief from loss-making associates, and the Patent Box for qualifying IP income. These reliefs can materially change the £22,750 headline figure shown here.