UK Corporation Tax for small companies: the 19% and 25% rates, Marginal Relief, and filing
A UK limited company pays Corporation Tax on its profits: 19% up to £50,000, 25% above £250,000, and a tapered rate in between via Marginal Relief (a 3/200 fraction for 2026). Both thresholds shrink if you have associated companies. Pay within 9 months and a day of your year-end, and file your CT600 within 12 months. Here's how it fits together.
This article is general information, not tax advice. Regulations change — verify the current rules with the official sources below before acting.
If you run a UK limited company, Corporation Tax is the one bill you cannot outsource your understanding of. The rate you actually pay depends on your profit — and on a rule many owners miss.
Three rates, not one
For the 2026 financial year, Corporation Tax has a small profits rate and a main rate, with a taper in between:
- Taxable profit £50,000 or less → 19% (the small profits rate).
- Taxable profit £250,000 or more → 25% (the main rate).
- Between £50,000 and £250,000 → the 25% main rate, reduced by Marginal Relief, so the effective rate climbs gradually from 19% toward 25%.
Marginal Relief in plain terms
Marginal Relief stops profits in the middle band from jumping straight to 25%. For the 2026 financial year it is calculated with a standard fraction of 3/200. You don't have to compute it by hand — HMRC publishes a Marginal Relief calculator, and accounting software applies it for you — but it is worth knowing it exists, because it changes your effective rate.
Watch out for associated companies
The £50,000 and £250,000 thresholds are divided by the number of "associated companies" you have, and reduced for accounting periods shorter than 12 months. Two associated companies halve the thresholds; three divide them by three. If you run more than one company, this rule can quietly push you into a higher rate — plan for it before year-end.
Pay and file
Corporation Tax has its own rhythm, separate from filing your annual accounts:
- Pay your Corporation Tax 9 months and 1 day after the end of your accounting period (very large companies pay in quarterly instalments).
- File your CT600 company tax return 12 months after the period end.
- Tell HMRC you are liable within 3 months of starting to trade.
HMRC has signalled that Making Tax Digital will eventually extend to Corporation Tax, but it is not yet mandated — for now, clean digital records simply make the return faster.
General information about UK Corporation Tax, current as of the review date above, and not tax advice. Rates, thresholds and deadlines change — confirm current figures with HMRC (gov.uk) or a qualified accountant.
Frequently asked questions
What Corporation Tax rate will my company pay?
For the 2026 financial year: 19% (the small profits rate) if your taxable profit is £50,000 or less, and 25% (the main rate) if it is £250,000 or more. Between those figures you pay the 25% main rate reduced by Marginal Relief, so the effective rate rises gradually from 19% toward 25%. The £50,000 and £250,000 thresholds are divided by the number of associated companies and reduced for accounting periods shorter than 12 months.
When do I pay and file my Corporation Tax?
Corporation Tax is normally due 9 months and 1 day after the end of your accounting period (very large companies pay in quarterly instalments), and your CT600 company tax return is due 12 months after the period end. You must also tell HMRC you are liable within 3 months of starting to trade. HMRC has signalled Making Tax Digital will eventually extend to Corporation Tax, but it is not yet mandated.