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Guide

Corporation Tax marginal relief

Corporation Tax is 19% on profits up to £50,000 and 25% from £250,000. Marginal relief tapers the bill for profits in between. The company calculator assumes a 12-month period.

Step by step

  1. 1Profits up to £50,000 are taxed at 19%
  2. 2Profits of £250,000 or more are taxed at 25%
  3. 3Between those limits, marginal relief reduces the main-rate bill. The relief comes from the gap between the two rates
  4. 4Associated companies split both limits. One associated company halves them
  5. 5HMRC pro-rates the limits for a short period and splits a first period over 12 months. This estimate assumes a 12-month period
  6. 6Use the company calculator for a figure, then check it before you rely on it

Common questions

When does Corporation Tax marginal relief apply?

When taxable profits are between £50,000 and £250,000. Profits up to £50,000 are taxed at 19%, and profits of £250,000 or more at 25%. Associated companies split those limits.

Common mistakes

  • Applying 19% all the way up to £250,000
  • Forgetting associated companies
  • Using a 12-month estimate for a short first accounting period

Related guides

Corporation Tax marginal relief calculator

Last checked against GOV.UK: 28 October 2026. Tax year 2026/27.

Not affiliated with HMRC. General information, not professional tax advice. Check GOV.UK or speak to a qualified adviser for your situation.