How corporation tax works now
Since April 2023 there are two rates. Profits up to £50,000 are taxed at the 19% small-profits rate; profits of £250,000 or more at the 25% main rate. Between the two, you pay 25% reduced by marginal relief, which produces an effective rate that climbs smoothly from 19% to 25%. The relief is 3/200 of the gap between the upper limit and your profit.
Associated companies and short periods
The £50,000 and £250,000 limits are shared. They're divided by the number of associated companies plus one — so a group of two halves them to £25,000 and £125,000 — and they're also pro-rated for accounting periods shorter than 12 months. Both push you into marginal relief or the main rate sooner, which this calculator handles.
Frequently asked questions
What rate will my company pay?
19% if profits are £50,000 or less, 25% if £250,000 or more, and an effective rate in between when marginal relief applies. Enter your figures above to see which band you're in.
What counts as an associated company?
Broadly, another company under the same control. Each one reduces the £50,000 and £250,000 limits, so it's an important figure to get right.
What is the marginal rate?
Between the limits, each extra £1 of profit is effectively taxed at 26.5% — higher than the headline 25% — because marginal relief is being withdrawn. The calculator shows this.
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Educational estimate — not tax advice. UK financial year 2025: small-profits rate 19% (to £50,000), main rate 25% (from £250,000), marginal relief 3/200 between, with limits divided by associated companies + 1 and pro-rated for short periods. It doesn't model trading losses, R&D relief, group relief, augmented profits (dividends received), or the 50%/instalment payment timing for large companies. Confirm with HMRC and an accountant.