Limited companies pay Corporation Tax on their profits. Here are the 2026/27 rates, how marginal relief works between £50,000 and £250,000, the allowances that cut your bill, and how and when to file the CT600 and pay.
The rates and thresholds, marginal relief with a worked example, the main allowances, and how to file the CT600 and pay on time.
The UK has a two-rate Corporation Tax system, in place since 1 April 2023 and confirmed to continue for the financial year beginning 1 April 2026. The rate your company pays depends on its augmented profits (broadly, taxable profits plus certain dividends from non-group companies).
| Profit level | Rate | Notes |
|---|---|---|
| Up to £50,000 | 19% | Small profits rate |
| £50,000 – £250,000 | Tapered | Marginal relief applies |
| Over £250,000 | 25% | Main rate |
The £50,000 and £250,000 thresholds are divided by the number of associated companies plus one, and reduced proportionally for accounting periods shorter than 12 months. So a company with two associated companies has thresholds of roughly £16,667 and £83,333.
Companies with profits between £50,000 and £250,000 are first charged at 25%, then claim marginal relief to taper the effective rate down towards 19%. The relief uses a standard fraction of 3/200. In practice your accounting software does this automatically, but the maths is worth seeing.
That is an effective rate of 24%. The marginal rate on each extra pound of profit between £50,000 and £250,000 is 26.5% — higher than the headline 25% — which is why profit timing and pension contributions can matter near the upper threshold. You can check figures with the HMRC marginal relief calculator or our Corporation Tax calculator.
You pay Corporation Tax on profit after allowable expenses and capital allowances. Key reliefs for 2026/27:
Salaries paid to directors and staff are deductible for the company, reducing Corporation Tax; dividends are not. Most owner-directors use a salary-plus-dividend mix — model it with our director salary calculator and read the Income Tax guide.
If a director borrows from the company and the loan is not repaid within nine months and one day of the year end, the company pays a temporary s455 charge of 33.75% on the outstanding balance, refundable when the loan is repaid. Estimate it with our s455 calculator.
The compliance cycle for a company has three fixed dates:
gov.uk Corporation Tax rates · pay Corporation Tax · Company Tax Returns.
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Rates, marginal relief, allowances, the CT600 and payment dates — answered for 2026/27.
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Find an expert →UK Tax Hero provides general tax guidance and a free expert-matching service for the 2026/27 tax year. It is not personal tax, legal or financial advice. Figures are based on published HMRC rates and may change. Always confirm details on GOV.UK or with a qualified professional before acting.
