Corporation Tax Rates for UK Companies (2025/26)

Corporation Tax is the main tax paid by UK limited companies on their taxable profits. Whether you’re a small business or a large enterprise, understanding how the 2025/26 Corporation Tax rates apply helps ensure compliance and efficient tax planning.

Corporation Tax Rates for 2025/26

As of April 2025, Corporation Tax rates remain consistent with those introduced in April 2023.

• Small Profits Rate: 19% — applies to companies with taxable profits of £50,000 or less.
• Main Rate: 25% — applies to companies with taxable profits of £250,000 or more.
• Marginal Relief: applies to companies with taxable profits between £50,001 and £250,000, providing a gradual increase between 19% and 25%.

The marginal relief, introduced in 2023, offers a sliding scale so that companies with profits in this middle range don’t face a sudden jump from 19% to 25%. HMRC uses a specific formula to calculate this relief, based on your taxable profits and the number of associated companies.

Marginal Relief Calculation Example

Suppose a company has taxable profits of £150,000 for a 12-month accounting period and no associated companies.

• Main Rate: 25%
• Marginal Relief Fraction: 3/200
• Upper Limit: £250,000

Step 1: Calculate Corporation Tax at the main rate:
£150,000 × 25% = £37,500

Step 2: Calculate the amount of Marginal Relief:
(3/200) × (£250,000 − £150,000) = 0.015 × £100,000 = £1,500

Step 3: Deduct Marginal Relief from the main rate tax:
£37,500 − £1,500 = £36,000