Corporation Tax Rates for UK Companies (2025/26)
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
