UK Corporation Tax 2026/27: Rates, Marginal Relief and Key Deadlines

UK corporation tax for 2026/27 has two main rates: 19% for companies with taxable profits up to £50,000 (the small profits rate) and 25% for profits above £250,000 (the main rate). Companies with profits between £50,000 and £250,000 pay an effective rate between 19% and 25% through the marginal relief mechanism. These rates have been unchanged since April 2023.

Corporation tax rates at a glance

• Small profits rate: 19% on profits up to £50,000.

• Main rate: 25% on profits above £250,000.

• Marginal relief band: profits between £50,001 and £250,000.

• Marginal relief fraction: 3/200 applied to profits above £50,000 within the band.

How marginal relief is calculated

A company with taxable profits of £150,000 pays the main rate of 25% on all profits (£37,500), then deducts marginal relief. Marginal relief = 3/200 × (£250,000 − £150,000) × (£150,000/£150,000) = £1,500. The effective corporation tax payable is £37,500 minus £1,500 = £36,000. The effective rate is 24%. The precise calculation can be modelled to confirm the exact liability.

Associated companies

Where a company has associated companies under common control, the £50,000 and £250,000 thresholds are divided by the number of associated companies plus one. A director who controls two companies has thresholds of £25,000 and £125,000 respectively. This is a common area where directors underestimate their corporation tax rate.

CT600 and payment deadlines

The corporation tax return (CT600) must be filed within 12 months of the end of the accounting period. Tax is payable nine months and one day after the accounting period end for most companies. Large companies with profits above £1.5 million pay quarterly instalment payments in the period itself. Missing the payment date attracts HMRC interest at the current late payment rate.

Annual Investment Allowance

The Annual Investment Allowance allows companies to deduct the full cost of qualifying plant and machinery in the year of purchase, up to £1,000,000. This significantly reduces the taxable profit in years of capital expenditure and is particularly valuable for companies investing in equipment, vehicles, or IT infrastructure.

Use our corporation tax calculator to calculate your 2026/27 liability including marginal relief, and contact Countify for CT600 preparation and tax planning.