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# UK corporation tax calculator (2025/26)

UK corporation tax is 19% on profits up to £50,000 and 25% on profits over £250,000. Between those points, marginal relief produces an effective rate of 26.5% on the slice in the middle. Enter your company's profit below to see the tax due and your effective rate.

      CB

        [Charlie Bailey](https://www.linkedin.com/in/charliebaileyy/) · Founder, Take Home · 6 years in UK accountancy
        Published 2026-05-30 · Updated 2026-05-30 · 3-min read

    On this page
- [Calculator](#calc)

      - [The rates](#rates)

      - [How marginal relief works](#marginal)

      - [Associated companies](#associated)

      - [FAQ](#faq)

##

Key takeaways
- Corporation tax is 19% up to £50,000 of profit and 25% above £250,000.

- Between £50,000 and £250,000, marginal relief gives an effective 26.5% on that slice.

- The £50,000 and £250,000 thresholds are divided by the number of associated companies.

- The effective 26.5% band is higher than the 25% main rate, which surprises many directors.

- Pension contributions and other allowable costs reduce the profit the tax is calculated on.

## Calculator

  Corporation tax calculator (2025/26)

      Company taxable profit (£)

    19% up to £50,000, 25% above £250,000, with marginal relief (an effective 26.5% on the slice between). Assumes one associated company and a 12-month period. Estimate, not advice.

## The rates

For 2025/26 (financial year from 1 April 2025), corporation tax has three zones:

- Small profits rate, 19% : taxable profit up to £50,000

- Marginal relief band : profit between £50,000 and £250,000, with an effective marginal rate of 26.5%

- Main rate, 25% : profit above £250,000

## How marginal relief works

In the middle band, you start from the 25% main rate and subtract marginal relief, calculated as (£250,000 minus your profit) times a fraction of 3/200. The arithmetic produces a strange result: the *extra* tax on each pound between £50,000 and £250,000 is effectively 26.5%, higher than the 25% main rate itself.

So a company with £80,000 of profit pays 19% on the first £50,000 and an effective 26.5% on the next £30,000. That counter-intuitive 26.5% band is exactly why directors with profits in this range pay close attention to pension contributions and timing.

## Associated companies

The £50,000 and £250,000 thresholds are shared. If you control more than one company, the thresholds are divided by the number of associated companies. Two associated companies, for example, drop the small profits ceiling to £25,000 each and the upper limit to £125,000 each.

This catches founders who run several companies, and it is easy to overlook. Take Home models corporation tax across all the companies you own, so the associated-company effect is built in rather than a nasty surprise.

**Information, not advice.** Take Home provides information and calculations, not regulated financial or tax advice. Your circumstances may differ and the figures here are illustrative for the 2025/26 tax year. Speak to a qualified adviser or accountant before acting on anything you read here.

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    FAQ

## Frequently asked

      What is the corporation tax rate for 2025/26?

19% on taxable profits up to £50,000, 25% on profits above £250,000, and an effective 26.5% on the slice between £50,000 and £250,000 due to marginal relief.

      How does marginal relief work?

You take the 25% main rate and subtract marginal relief of (£250,000 minus your profit) times 3/200. The effect is that each pound of profit between £50,000 and £250,000 is taxed at an effective 26.5%, which is higher than the 25% main rate.

      Why is the effective rate 26.5% higher than 25%?

Because marginal relief tapers away the benefit of the 19% rate as profits rise towards £250,000. The withdrawal of that benefit, on top of the 25% rate, produces an effective marginal rate of 26.5% across the middle band.

      What are associated companies?

Companies under common control. The £50,000 and £250,000 corporation tax thresholds are divided by the number of associated companies, so owning several companies lowers the point at which higher rates apply to each.

      Can I reduce my corporation tax?

Corporation tax is charged on taxable profit, so allowable costs reduce it. Company pension contributions for directors are a common example, as they are deductible and not subject to National Insurance. This is information, not advice; speak to your accountant.