Corporation tax calculator
See the marginal relief calculation in full — the main rate charge, the relief deducted, your effective rate, and why the next £1,000 of profit costs more than the headline rate.
Calculator
Profit, not turnover. This is what is left after allowable expenses and capital allowances — the figure at the bottom of your CT600 computation, before any tax.
Usually zero. Leave it at zero unless your company received dividends from a company it is not grouped with — see the note below.
What this is, and why a calculator asks for it. HMRC calls these exempt distributions, or franked investment income. They are dividends and similar distributions your company received from another company. They are not taxed again in your company — that is what “exempt” means — but they are added to your taxable profit to give augmented profits, and it is augmented profits, not your taxable profit, that decide which rate applies and how much marginal relief you get. Dividends from within your own group do not count and must be left out. HMRC excludes anything received from a 51% subsidiary of your company, from a company your company is a 51% subsidiary of, or from a quasi-subsidiary. So this box is for dividends from genuinely outside companies — an investment holding, a minority stake — and for most companies it is £0. Getting it wrong by leaving it out understates the tax.
Corporation tax rates and limits are the same in both years this page offers, so this choice does not change the figure below. It is here so a shared link still means the same thing after a Budget moves one of them.
Count this company plus every company associated with it. A company with no associates is 1.
HMRC counts this differently, and the difference is the whole answer. “Associated companies” in HMRC’s guidance means the other companies, and the limits are divided by one plus that number. So a company with two associates is a 3 in this box, not a 2. Enter the total, including this company.
One company, so the full £50,000 and £250,000 limits apply.
Your corporation tax, and how it is worked out
Corporation tax: £22,750.00
An effective rate of 22.75% on the profits you entered. That is the number to compare against another year or another company — not the headline rate, which almost nobody actually pays in full.
How that figure is built
| Taxable profit | £100,000.00 |
|---|---|
| Main rate (25.00%) on all of the profit | £25,000.00 |
| Less marginal relief — 3/200 of the £150,000.00 by which profit falls short of £250,000.00 | −£2,250.00 |
| Corporation tax due | £22,750.00 |
| Effective rate on the whole profit | 22.75% |
Basis of charge: Main rate, less marginal relief. Marginal relief is not a band. The main rate is charged on every pound of profit and a single deduction is then made, sized by how far below the upper limit the profit fell. That is why the relief shrinks to nothing exactly at £250,000.00, and why the two rates meet without a step at either end.
What the next £1,000 of profit costs
Another £1,000 of profit would add £265.00 of tax — a marginal rate of 26.50%.
That is higher than the 25.00% main rate, and it is not a mistake. Every extra pound of profit is charged at the main rate and takes 3/200 of a pound of marginal relief away with it. Both happen, so the cost of the pound is the sum of the two. A company sitting in this band pays more on its next pound of profit than a company earning ten times as much — which is the single most counter-intuitive thing about UK corporation tax, and the thing worth knowing before deciding when to invoice.
The effective rate climbs from 19.00% to 25.00% across the band
Between £50,000.00 and £250,000.00 of profit, marginal relief tapers away. The effective rate rises smoothly between the two headline rates — there is no cliff edge at either end, and no band in which the small profits rate applies to part of the profit.
| Taxable profit | Charge before relief | Marginal relief | Tax due | Effective rate | Charged at |
|---|---|---|---|---|---|
| £50,000 | £9,500.00 | — | £9,500.00 | 19.00% | Small profits |
| £100,000 | £25,000.00 | −£2,250.00 | £22,750.00 | 22.75% | With relief |
| £150,000 | £37,500.00 | −£1,500.00 | £36,000.00 | 24.00% | With relief |
| £200,000 | £50,000.00 | −£750.00 | £49,250.00 | 24.63% | With relief |
| £250,000 | £62,500.00 | — | £62,500.00 | 25.00% | Main rate |
The first row is the small profits limit and the last is the main rate limit, both adjusted for the single company you entered. Read down the effective rate column: it never falls, and it never leaves the two headline rates. The first row is charged at the small profits rate outright, which is why its charge before relief is smaller than the row’s main-rate equivalent would be and why it has no relief to deduct.
Four things this figure does not know
It does not work your profit out for you
You supply the taxable profit; this page charges tax on it. Allowable expenses, capital allowances, the annual investment allowance, disallowed entertaining, losses brought forward and R&D relief all sit before the number you typed, and none of them happen here. If you entered turnover, every figure above is wrong and far too high.
It does not apportion an accounting period across a rate change
Corporation tax rates are set by financial year, which runs 1 April to 31 March. An accounting period that straddles 1 April falls in two financial years, and if a rate or a limit changed between them the profits have to be time-apportioned and charged separately in each part. This calculator has no accounting period dates and does no apportionment: it charges one set of figures to the whole profit. No rate or limit differs between the years this page offers, so today that changes nothing. The moment a Budget moves one, a straddling period will need splitting and this page will not do it for you.
It assumes a full twelve-month accounting period
The £50,000.00 and £250,000.00 limits are annual figures, and a period shorter than twelve months has them reduced in proportion — a six-month period is measured against half of each. This page always uses the full-year limits, so a short period is measured against limits that are too generous and the tax shown is too low.
It does not decide who is associated with whom
You told it one company, and it believed you. Association turns on control and on substantial commercial interdependence, it reaches through common shareholders and their relatives, and it counts dormant and non-UK companies in some circumstances and not others. Getting the count wrong by one moves the limits by tens of thousands of pounds. If there is any group structure at all, check the count with an accountant before relying on the figure above.
Worked example
Two companies in 2026/27, both with a full twelve-month accounting period and neither with any associated company.
Northgate Ltd makes £100,000 of taxable profit. That is above the £50,000 small profits limit and below the £250,000 main rate limit, so the main rate is charged on all of it and marginal relief is then deducted:
| Main rate (25.00%) on £100,000 | £25,000.00 |
|---|---|
| Less marginal relief: 3/200 of £150,000 | −£2,250.00 |
| Corporation tax | £22,750.00 |
| Effective rate | 22.75% |
Southgate Ltd makes £400,000. That is above the main rate limit, so there is no relief at all: £100,000.00, an effective rate of 25.00%.
Now give each of them £1,000 more profit.
| Company | Profit | Effective rate | Tax on the next £1,000 | Marginal rate |
|---|---|---|---|---|
| Northgate | £100,000 | 22.75% | £265.00 | 26.50% |
| Southgate | £400,000 | 25.00% | £250.00 | 25.00% |
Northgate pays a lower effective rate and a higher marginal one. The extra profit is charged at the main rate and simultaneously destroys 3/200 of a pound of relief for each pound earned, and the company bears both. This is the fact that a calculator showing only a total hides, and it is the one that changes decisions — about a director’s bonus, about when to raise an invoice, about whether to bring a capital purchase forward.
Associated companies move the whole picture. If Northgate had one associated company — two companies in the group, including itself — both limits would halve, to £25,000.00 and £125,000.00. Its £100,000 of profit would sit much closer to the top of a much narrower band, so far less relief would be due and the bill would be £24,625.00 instead of £22,750.00 — £1,875.00 more, for a fact about its shareholders rather than about its trade. A third company in the group would take the upper limit below the profit altogether, at £83,333.33, and the full main rate would apply: £25,000.00.
Methodology and sources
The calculation, in order
- Start from the taxable profit you entered. This page does not work the profit out — expenses, capital allowances and losses all come before it.
- Divide both limits by the number of companies in the group, including this one, and round down to the penny. One company leaves them at £50,000 and £250,000.
- Add any dividends received from companies outside the group to the taxable profit. That total is augmented profits, and it is the figure compared against the limits — the tax itself is charged only on the taxable profit. For a company with no such dividends the two are the same number.
- Augmented profits at or below the lower limit: the small profits rate, and that is the whole calculation.
- Augmented profits at or above the upper limit: the main rate, with no relief.
- In between, the main rate is charged on all of the taxable profit and marginal relief is deducted. The relief is the standard fraction 3/200 multiplied by the amount by which augmented profits fall short of the upper limit, and then apportioned by taxable profit ÷ augmented profits.
The consequence of step 5 is the effective rate. At the lower limit the relief exactly cancels the difference between the two rates, so the charge is continuous; at the upper limit the relief has shrunk to nothing. Between them the effective rate rises from 19.00% to 25.00%, and the rate on the next pound is higher than either.
Rates and limits
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Main rate | 25.00% | 25.00% |
| Small profits rate | 19.00% | 19.00% |
| Lower limit (small profits rate up to) | £50,000 | £50,000 |
| Upper limit (main rate from) | £250,000 | £250,000 |
| Marginal relief standard fraction | 3/200 | 3/200 |
Every figure in that table is the same in both years, which is why the tax year selector does not change the answer. It is offered anyway, because a share link should keep meaning the same thing after a Budget that makes them differ.
What this page does not do
- It does not apportion an accounting period. Rates are set by financial year, 1 April to 31 March. A period straddling 1 April sits in two financial years and, if a figure changed between them, must be time-apportioned and charged in each part separately. There are no period dates on this page and no apportionment in the engine behind it.
- It does not reduce the limits for a short period. The limits above are annual. A period shorter than twelve months has them scaled down in proportion, which would raise the tax; this page always applies the full-year figures.
- It does not decide which companies are associated. The count is yours to get right, and it turns on control and substantial commercial interdependence rather than on anything visible in the accounts.
- It has no ring fence, patent box or creative industry rates, no quarterly instalment payments, and no arithmetic for close investment-holding companies — which are denied the small profits rate entirely.
Where the figures come from
- Corporation tax rates and allowances
- Corporation tax rates
- Marginal relief for corporation tax
- Associated companies — CTM03900 onwards
The rates, limits and standard fraction in the table above were verified against gov.uk on 12 August 2026. That check covers the published figures this page computes with. It does not verify any result the page produces, and it has not yet been signed off by a person — the verification recorded in the source repository is an automated one. Check anything that matters against gov.uk or with an accountant.
Everything is calculated in your browser. There is no application server and no database, so nothing you type here is transmitted or stored. A share link is the exception: it puts your figures in the URL, and opening one is an ordinary request that carries them to the host. More on what that means. Information, not advice.
Frequently asked questions
- What is marginal relief and how is it worked out?
Marginal relief is a deduction that smooths the step between the 19.00% small profits rate and the 25.00% main rate. It is not a band: the main rate is charged on all of your taxable profit, and then the standard fraction — 3/200 — of the amount by which your augmented profits fall short of the £250,000 upper limit is taken off. If you received dividends from outside your group, that deduction is then apportioned by taxable profit ÷ augmented profits, so you get relief only on the share of profit actually chargeable to tax; with no such dividends, augmented profits are just your taxable profit and the apportionment does nothing. At the lower limit the deduction is large enough to bring the charge back to the small profits rate exactly; at the upper limit it is nothing.
- Why is my marginal rate higher than the 25% main rate?
Because an extra pound of profit inside the marginal relief band does two things at once: it is charged at the main rate, and it destroys 3/200 of a pound of relief. Both apply, so the cost of that pound is 26.50%. A company with profits between the two limits pays more tax on its next pound than a company with ten times the profit — which is why the effective rate on the page and the marginal rate on the page are different numbers, and why only one of them is useful for deciding whether to take another pound of profit this year.
- What is an exempt distribution, and why does the calculator ask about dividends I received?
An exempt distribution — HMRC also calls it franked investment income — is a dividend or similar distribution your company received from another company. It is not taxed again in your company, which is what "exempt" means. But it is added to your taxable profit to give your augmented profits, and it is augmented profits, not your taxable profit, that decide which corporation tax rate applies and how much marginal relief you get. Dividends from within your own group are excluded and must be left out: anything from a 51% subsidiary of your company, from a company yours is a 51% subsidiary of, or from a quasi-subsidiary. So the box is for dividends from genuinely outside companies, and for most companies the answer is zero. HMRC's own worked example at CTM03925 has £90,000 of profit and £8,000 of exempt distributions: augmented profits of £98,000 cut the marginal relief from £2,400 to £2,093.88 and raise the tax by £306.12.
- What counts as an associated company?
Broadly, another company under the same control as yours, or one your company controls, or one that controls it — including through people connected to a shareholder, such as a spouse or a business partner, where there is substantial commercial interdependence between the two. Dormant companies are usually excluded and non-UK companies are usually included. Note the counting: HMRC divides the limits by one plus the number of associated companies, so this calculator asks for the total number of companies including yours. A company with two associates is a 3 here.
- How do associated companies change the tax?
They divide both limits. With one associated company the small profits limit falls from £50,000 to £25,000 and the main rate limit from £250,000 to £125,000. A company on £100,000 of profit pays £22,750.00 on its own and £24,625.00 with one associate — the same trade, the same profit, £1,875.00 more tax. Getting the count wrong is one of the most expensive mistakes available on a CT600.
- Does this handle an accounting period that straddles 1 April?
No. Corporation tax rates are set by financial year, which runs from 1 April to 31 March, so an accounting period that spans that date falls in two financial years. If a rate or limit changed between them, the profits must be time-apportioned and charged separately in each part. This calculator has no accounting period dates and does not apportion anything — it applies one year’s figures to the whole profit. It also does not reduce the limits for an accounting period shorter than twelve months, which would raise the tax.
- Do I enter turnover or profit?
Profit. Specifically the taxable total profits for the accounting period: turnover less allowable expenses, less capital allowances, less any losses you are setting against it. This page taxes the number you give it and does not work that number out, so entering turnover produces a bill that is far too high and looks perfectly plausible.
- What is my effective rate and why is it not 19% or 25%?
The effective rate is the tax due divided by the profit — what you actually pay across the whole of it. Below £50,000 it is the small profits rate and above £250,000 it is the main rate, but between them marginal relief puts it somewhere in the middle. At £100,000 of profit it is 22.75%. That is the figure to compare between years or between companies; the marginal rate is the figure for deciding what an extra pound of profit costs.
- Is the tax the same everywhere in the UK?
Yes. Corporation tax is not devolved: the same rates, limits and marginal relief apply in England, Scotland, Wales and Northern Ireland. That is unlike income tax, where Scottish rates and bands differ, so a director comparing salary against dividends needs the devolved position on the personal side and this UK-wide one on the company side.