Corporation Tax Calculator 2025/26

Corporation Tax is the tax limited companies pay on their taxable profits. Since April 2023, the UK has operated a two-rate system: a small profits rate of 19% for companies with profits up to £50,000, and a main rate of 25% for profits over £250,000. Companies with profits between these thresholds benefit from marginal relief, which creates an effective rate that gradually increases from 19% to 25% across that band.

Understanding Corporation Tax is vital for company directors making decisions about profit extraction, investment timing, and dividend planning. The marginal relief formula means profits between £50,000 and £250,000 face an effective marginal rate of 26.5% — actually higher than the main rate. This creates a tax planning sweet spot: if your profits are near £50,000, pension contributions or other allowable expenses can keep you in the small profits band and save significant tax.

How to Use This Calculator

1. Enter your company's taxable profit for the accounting period
2. Specify the number of associated companies (this divides the thresholds)
3. Select the accounting period dates
4. View the tax due, effective rate, and marginal rate on the next pound of profit
5. Experiment with different profit levels to find optimal extraction strategies

Key Facts

Corporation Tax is due 9 months and 1 day after your accounting period ends. Companies with profits over £1.5 million must pay in quarterly instalments. If you have associated companies (those under common control), the £50,000 and £250,000 thresholds are divided equally between them. Capital allowances, R&D tax credits, and pension contributions all reduce taxable profits before Corporation Tax is calculated.