Corporation Tax Calculator UK 2026 HMRC style
Instantly calculate your corporation tax liability, marginal relief, and effective tax rate. Updated for the 2026 financial year — designed for UK limited companies, accountants, and business owners.
UK corporation tax estimator
Based on current UK rates: 19% (profits ≤ £50k), 25% (≥ £250k), marginal relief for profits between £50k–£250k.
Understanding corporation tax calculation is essential for every UK limited company director. Unlike income tax, corporation tax is levied directly on company profits (trading income, investments, and chargeable gains). As of 2026, the main rate stands at 25% for profits above £250,000, while the small profits rate remains 19% for profits up to £50,000. If your annual taxable profit falls between these thresholds, marginal relief gradually tapers the effective rate. Our corporation tax calculator UK replicates the exact HMRC methodology, ensuring you can plan ahead for your next tax return.
Current corporation tax rates and thresholds (2026)
| Taxable profit range | Corporation tax rate | Marginal relief available? |
|---|---|---|
| £0 – £50,000 | 19% | No – small profits rate applies |
| £50,001 – £250,000 | Variable (19% → 25%) | Yes – marginal relief reduces effective rate |
| Over £250,000 | 25% | No – main rate applies |
Marginal relief formula (2026): Tax = (Profits × 25%) – Relief, where Relief = (Upper Limit – Profits) × (25% – 19%) × (Profits / Upper Limit). Upper limit = £250,000. This calculation ensures a smooth transition, preventing a steep “cliff edge” tax jump.
Step-by-step: How to calculate corporation tax for your business
Follow these steps to compute your corporation tax liability accurately. Whether you're using our corporation tax marginal relief calculator or preparing CT600, the logic remains consistent.
- Step 1 – Determine accounting period: Usually 12 months. If your company’s year-end falls after 1 April, apportionment may apply.
- Step 2 – Compute taxable total profits: Trading profits + capital gains – allowable deductions (capital allowances, trading losses, charitable donations).
- Step 3 – Identify the applicable rate band: Compare profit against £50k and £250k thresholds.
- Step 4 – Apply marginal relief (if profit between £50k–£250k): Use the formula above to reduce the 25% baseline tax.
- Step 5 – Deduct any reliefs or R&D credits: These reduce the final tax payable.
- Step 6 – File & pay: Deadline is 9 months and 1 day after the accounting period end (or 12 months for filing).
Example: Corporation tax calculation with marginal relief
Assume your company has taxable profits of £145,000 in the financial year 2026. Main rate would give £36,250, but marginal relief applies. Relief = (£250,000 – £145,000) × 6% × (£145,000/£250,000) = £105,000 × 0.06 × 0.58 = £3,654. So final tax = (£145,000 × 25%) – £3,654 = £36,250 – £3,654 = £32,596. Effective rate = 22.48%.
100% first-year allowance on new zero-emission vehicles – a powerful way to reduce taxable profit.
If your accounting period straddles 1 April, use split-year rates. Our calculator uses standard FY2026 rates for simplicity.
Corporation tax is due 9 months and 1 day after the year-end. Late payment interest accrues daily (HMRC rate ~7.25%).
Exclusive 2026 tax planning insights
Many business owners overlook the impact of associated companies rules. If you control other companies, the £50k and £250k thresholds are divided by the number of associated firms. For example, with one associated company, the small profits limit shrinks to £25k, and the upper limit to £125k. This can dramatically change your corporate income tax calculator outcome. Always check if your group structure triggers these restrictions.
Another strategic lever: pension contributions. Employer pension payments are an allowable expense, reducing taxable profit while rewarding directors. Additionally, R&D tax relief remains generous in 2026: SMEs can claim up to 27% enhancement, further lowering corporation tax. Use our calculator to test different profit scenarios before year-end.
Corporation tax vs. dividend tax: what’s the difference?
While corporation tax is paid by the company on its profits, shareholders pay dividend tax on any distributions received. A common question is “dividend and corporation tax calculator” — after corporation tax is settled, net profits can be distributed, and individuals then pay dividend tax above the £1,000 allowance (2026). Combining both helps with total tax efficiency. Our tool focuses solely on the corporate layer, the essential first step.
| Key aspect | Corporation tax | Dividend tax (personal) |
|---|---|---|
| Paid by | Limited company | Individual shareholders |
| Rate (2026) | 19%–25% (marginal relief) | 8.75% (basic), 33.75% (higher), 39.35% (additional) |
| Allowance | N/A – profits above threshold taxed | £1,000 tax-free dividend allowance |
Frequently asked questions about UK corporation tax
For profits under £50,000, the rate is flat 19%. Use our corporation tax calculator uk above to get an instant result — no complex formulas needed.
Marginal relief applies if your taxable profits are between £50,000 and £250,000. It reduces the tax liability gradually so you don't face a full 25% rate on all profits.
Payment deadline is 9 months and 1 day after your accounting period ends. Late payment interest accrues from the due date.
Yes, chargeable gains are added to your taxable profits and taxed at the corporation tax rate, not separate capital gains tax.
This tool reflects the 2026 rates and marginal relief thresholds. For previous years, rates differ slightly, but the calculation method remains similar.
Absolutely – 100% first-year allowance for zero-emission cars purchased new, significantly lowering corporation tax.
Profits are apportioned between financial years, using the rate for each period. Our calculator assumes a single FY2026 for clarity.
Important disclaimer
TotalCalcHub's corporation tax calculator provides estimates based on current UK legislation (2026). It does not constitute official HMRC advice. Tax results may vary depending on specific allowances, capital allowances, associated companies, or loss relief. Always consult a qualified accountant or tax advisor before filing your CT600 return. Accuracy is not guaranteed for complex group structures. Updated for financial year 2026.