Corporation Tax Calculator (UK 2026)
Calculate UK Corporation Tax on company profits. Applies the small profits rate (19%), main rate (25%), and marginal relief calculation.
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Corporation Tax Guide 2026/27
What's the key thing to understand about Three-Tier System (Since April 2023)?
Profits up to £50,000: 19% (small profits rate). Profits £50,001 to £250,000: marginal relief — effective rate gradually increases from 19% to 25%. Profits over £250,000: 25% flat rate. The marginal relief formula: (£250,000 − profit) × (profit / profit) × 3/200. This creates a smooth transition without a 'cliff edge' at £50,000. Effective rates within marginal band: £75,000 profit: ~22% effective. £100,000: ~23%. £150,000: ~23.7%. £200,000: ~24.4%. £250,000: 25%. Important: thresholds DIVIDE by the number of associated companies, so group structures with multiple companies lose access to the lower small-profits rate proportionally.
What do I need to know about Associated Companies Rule?
Companies are 'associated' if: one controls the other, or the same person/group controls both. Includes: parent and subsidiaries. Companies under common ownership. Companies linked through family relationships in some cases. Impact: thresholds divided by number of associated companies. Example: holding company plus 4 trading subsidiaries = 5 associated. Lower threshold per company: £50,000 / 5 = £10,000. Upper threshold: £250,000 / 5 = £50,000. Each company hits marginal relief and the main rate at lower absolute profit levels than a standalone company would, which is why group structures need careful tax planning.
What Counts as Taxable Profit?
Start with accounting profit. Adjustments to arrive at taxable profit: ADD: depreciation (not allowable). Capital allowances claimed elsewhere. Disallowable expenses (entertainment except staff, fines, etc.). DEDUCT: capital allowances (instead of depreciation — typically more generous). Loss relief. R&D enhanced deductions (SME scheme: 86% additional deduction since April 2023). Patent Box rate: 10% on qualifying patent income. Capital allowances 2026/27: full expensing of qualifying plant and machinery remains available for most companies, allowing 100% of the cost to be deducted from taxable profit in the year of purchase. Keeping clean, categorised records throughout the year makes this figure far more accurate at filing time — QuickBooks tracks income and expenses for limited companies and supports Making Tax Digital for Corporation Tax.
What should I know about R&D Tax Credits?
R&D tax credit scheme: significant relief for innovating companies. SME scheme (from April 2023): qualifying R&D expenditure gets 86% additional deduction (so total deduction = 186% of cost). For loss-making SMEs: surrender losses for cash credit (10% from April 2023). RDEC scheme (large companies and some SMEs): 20% taxable credit. Qualifying activities: scientific or technological advance. Must seek to resolve scientific or technological uncertainty. Software development qualifies if creating genuinely new or improved functionality, not routine bug fixes or using existing tools in a standard way.