Corporation Tax Marginal Relief Calculator
Estimate UK Corporation Tax for a company with profits around the small profits and main rate thresholds. It calculates the 19% small profits rate, 25% main rate, marginal relief, adjusted limits for associated companies, and short accounting periods.
Work out Corporation Tax and marginal relief
Use taxable total profits after allowable expenses and reliefs. Add non-group dividends only if they count in augmented profits.
Corporation Tax financial years start on 1 April.
Some companies cannot claim marginal relief.
Your Corporation Tax profits after allowable deductions.
For example, relevant non-group dividends.
Enter other companies. This company is added automatically.
Oil and gas ring fence rates are not calculated here.
Small profits rate
19%
Normally applies when augmented profits do not exceed the adjusted lower limit.
Marginal band
GBP 50k-250k
Limits reduce for short periods and associated companies.
Main rate
25%
Applies above the adjusted upper limit, or where marginal relief is not available.
Why Corporation Tax marginal relief catches people out
Corporation Tax looks simple at first: 19% for smaller profits and 25% for bigger profits. The awkward bit is the space in the middle. Once profits move above the lower limit, the company is charged at the main rate and then gets marginal relief. That relief gradually disappears as augmented profits move towards the upper limit.
This matters for ordinary small companies, not just large groups. A freelance limited company, family trading company or small agency can move into the marginal band after a strong year, a one-off project, a delayed invoice, or a taxable gain. If there are associated companies, the limits can shrink quickly. With three other associated companies, for example, the ordinary GBP 50,000 lower limit becomes GBP 12,500 and the GBP 250,000 upper limit becomes GBP 62,500 before any short-period adjustment.
The calculator is designed to make those adjustments visible. It shows the adjusted lower and upper limits, the augmented profit figure used for relief, the marginal relief amount, and the effective tax rate on the taxable profits you entered.
| Profit position | Usual treatment |
|---|---|
| At or below lower limit | Small profits rate, 19% |
| Between limits | Main rate less marginal relief |
| Above upper limit | Main rate, 25% |
| Relief blocked | Main rate may apply even in the band |
How this Corporation Tax calculator works
Inputs used
- Financial year basis, because Corporation Tax financial years run from 1 April.
- Taxable total profits after allowable deductions, capital allowances and relevant reliefs.
- Augmented profit additions, such as relevant non-group distributions.
- Accounting period start and end dates for short-period limit reductions.
- Other associated companies, so the lower and upper limits can be divided correctly.
Calculation method
- Calculate the accounting period length and reduce the GBP 50,000 and GBP 250,000 limits if the period is shorter than 12 months.
- Divide those limits by the total number of associated companies, including this company.
- Calculate augmented profits as taxable total profits plus the entered additions.
- Apply 19% if augmented profits are at or below the adjusted lower limit.
- Apply 25% less marginal relief if augmented profits are between the adjusted lower and upper limits.
- Apply 25% if augmented profits exceed the adjusted upper limit or if marginal relief is not available.
Assumptions
- The calculator covers normal UK non-ring-fence company profits for financial years 2023, 2024, 2025 and 2026, where the small profits rate is 19%, the main rate is 25%, and the standard fraction is 3/200.
- Accounting periods are treated as one Corporation Tax period. If your accounts cover more than 12 months, companies normally need more than one Corporation Tax accounting period.
- The associated-company input is a simplified count. It does not decide whether another company is associated under the control rules.
- The calculation assumes the entered taxable profits are already after normal accounting and tax adjustments.
What this does not cover
- It does not calculate ring fence oil and gas Corporation Tax rates, bank surcharge, diverted profits, unassessed transfer pricing profits, or close investment holding company special treatment.
- It does not prepare a CT600, iXBRL accounts, loss claims, group relief, R&D relief, capital allowance computations, or chargeable gains schedules.
- It does not replace the Director Salary and Dividend Calculator, Dividend Tax Calculator, R&D Tax Credit Calculator, or advice from an accountant.
Worked example: a company with GBP 100,000 profit
Suppose a company has GBP 100,000 taxable profits, no relevant dividend additions and no associated companies. The ordinary lower limit is GBP 50,000 and the upper limit is GBP 250,000, so the company sits in the marginal relief band.
The starting point is 25% of taxable profits, which is GBP 25,000. Marginal relief is then calculated using the standard fraction of 3/200, the upper limit, augmented profits and taxable total profits. With no augmented-profit additions, the relief is GBP 2,250, leaving Corporation Tax of GBP 22,750. The effective rate is 22.75%.
That is why the marginal band often feels like a 26.5% slice on profits above GBP 50,000. The first GBP 50,000 is effectively taxed at 19%, and the next part of the band is dragged upwards until the overall rate reaches 25% at the upper limit.
Three checks before filing
First, check the profit figure. This calculator needs taxable total profits, not turnover, bank balance or accounting profit before tax adjustments. Capital allowances, disallowable costs, losses and other reliefs can all change the number.
Second, check associated companies. If the same person or people control more than one company, the limits may be divided. This can push what looks like a modest company into the marginal band or main-rate territory.
Third, check the accounting period length. A new company, a shortened year-end, or a cessation period can reduce the thresholds. It is a small detail that can make the tax bill look surprisingly high if missed.
Common mistakes with marginal relief
Using accounting profit instead of taxable profit
Corporation Tax is based on taxable profits after tax adjustments. Your accounts profit may not be the right input.
Forgetting augmented profits
The marginal relief formula uses augmented profits. Relevant distributions can reduce or remove relief.
Missing associated companies
The limits are divided by associated companies, including this company. One extra company can halve the limits.
Assuming a long period is one calculation
Company tax accounting periods are normally capped at 12 months. Longer accounts may need split returns.
Corporation Tax marginal relief FAQs
What is the Corporation Tax marginal relief formula?
What are augmented profits?
Why does the calculator ask about associated companies?
Can every company claim marginal relief?
Does this calculate the Corporation Tax payment deadline?
Official sources
Last verified: May 9 2026. Calculations are estimates based on the published rules and assumptions shown on this page.
- GOV.UK Corporation Tax rates and allowances - small profits rate, main rate, marginal relief limits and standard fraction for financial years 2025 and 2026
- GOV.UK Corporation Tax rates guide - threshold reduction for short accounting periods and associated companies
- GOV.UK Marginal Relief for Corporation Tax - who can claim marginal relief and when it is not available
- HMRC Company Taxation Manual CTM03925 - marginal relief formula using standard fraction, upper limit, augmented profits and taxable total profits
- HMRC Company Taxation Manual CTM03900 - small profits rate guidance for financial year 2023 onwards