Corporation Tax & Marginal Relief 2026/27
Between £50k and £250k of taxable profit, HMRC's marginal relief produces a 26.5% effective tax rate, the band growing companies cross before the headline 25% rate kicks in.
This tool models associated companies, shows where you sit in the band, and estimates the pension contribution that would bring you back to 19%.
Your Inputs
What this changes
Profit after all allowable expenses, capital allowances and pension contributions but before Corporation Tax. Below £50,000 the rate is 19%. Between £50,000 and £250,000 the marginal-relief band applies, giving a 26.5% effective rate. Above £250,000 the headline rate is 25%.
What this changes
Other companies under common control. The £50,000 lower and £250,000 upper limits are divided by (1 + number of associates), pulling the marginal-relief band downward. With one associate the band runs from £25,000 to £125,000; with three it runs from £12,500 to £62,500.
What this changes
Default 12 months. Short or long accounting periods scale the £50,000 and £250,000 thresholds proportionally, a 6-month period halves them, raising the chance of falling into the 26.5% band.
Corporation Tax liability
Rates current for tax year 2026/27
These calculators are diagnostic tools intended to give you an initial estimate. They are not a substitute for personalised advice on your specific circumstances. Figures depend on the inputs you provide and on tax rules that change over time. Speak to us before acting on any result.
A CIMA Chartered Management Accountant will review your details and send you a tailored breakdown.
Limits are reduced proportionally by number of associated companies and short accounting periods. Relief calculation uses HMRC's 3/200 marginal fraction.
Check the profit figure first
Corporation Tax is charged on taxable profit, not the cash left in the bank. The figure should already allow for salary, employer pension contributions, capital allowances, disallowable costs, any losses brought forward and timing differences at year-end.
The marginal relief limits are also reduced when the company has associated companies. One associated company halves the £50,000 and £250,000 thresholds; more associated companies reduce them further. That can pull a company into the 26.5% effective band sooner than the director expects.
Use the calculator to test the size of the Corporation Tax bill, then check the working against the accounts before making pension, dividend or capital spending decisions.