Corporation tax calculator
A company pays 19% on small profits and 25% on large ones, with a marginal band in between that is often misunderstood. Enter your profit to see the bill and the real rate you pay.
How the bill is worked out
Corporation tax has two headline rates. Profits up to £50,000 are taxed at the small-profits rate of 19%. Profits of £250,000 or more are taxed at the main rate of 25% on the whole amount. The awkward part is the band between them, where the main rate is charged and then reduced by marginal relief so the effective rate rises smoothly rather than jumping.
Marginal relief equals 3/200 of the difference between the £250,000 upper limit and your profit. Because of the way this tapers, every extra pound of profit in the £50,000 to £250,000 band actually costs 26.5% in tax, higher than the 25% main rate. That marginal rate is worth knowing before you decide whether to bring income forward or push it into the next year.
Worked example
Take a company with £90,000 of taxable profit. It sits in the marginal band, so the calculation is 25% of £90,000, which is £22,500, less marginal relief of 3/200 of the £160,000 gap up to £250,000. That leaves a bill of about £20,100, an effective rate of 22.3%. The company keeps £69,900 to reinvest or pay out.
Common questions
What are the corporation tax rates?
A small-profits rate of 19% applies to taxable profits up to £50,000. The main rate of 25% applies from £250,000. Between those two figures the main rate is charged and then cut by marginal relief, which produces a gradual climb from 19% up to 25%.
How does marginal relief work?
For profits between £50,000 and £250,000 you calculate tax at 25%, then subtract relief equal to 3/200 of the gap between £250,000 and your profit. The effect is a marginal rate of 26.5% on each pound in that band, which is why the effective rate rises faster than you might expect.
How much corporation tax on £90,000 profit?
A £90,000 profit falls in the marginal relief band. The bill is about £20,100, an effective rate of 22.3%. Each extra £1 of profit in this band is taxed at 26.5%.
What are associated companies?
If you control other companies, the £50,000 and £250,000 limits are divided between them. Two associated companies each get a £25,000 lower limit and a £125,000 upper limit, so profits hit the higher rates sooner. This tool assumes a single company with no associates.
Is this the same across the UK?
Yes. Corporation tax is set by the UK government and applies to companies in all four nations. Unlike income tax, there is no separate Scottish rate.