Corporation tax rates 2026/27

Which rate applies

A company with profits at or below the lower limit pays the small profits rate. Above the upper limit, the main rate applies to all of the profit. Between the two limits the company starts from the main rate and claims marginal relief, which reduces the bill so that the rate rises gradually from the small profits rate to the main rate as profit grows.

Some companies cannot claim marginal relief, including companies that are not resident in the UK and close investment holding companies. Profits from oil rights or extraction in the UK and on the UK continental shelf, known as ring fence profits, have rates of their own.

Short periods and associated companies

Both profit limits shrink in proportion when an accounting period is shorter than twelve months. They are also divided when a company has associated companies: the divisor is the number of associated companies plus one. A company with three associated companies divides each limit by four, so the main rate reaches it at a much lower profit.

Corporation tax rates are set for financial years, which begin on the first of April. When an accounting period falls across two financial years with different rates, the company counts the days that fall in each year and works out the tax on each part separately.

Working out a bill

The corporation tax calculator takes a profit figure, the length of the accounting period and the number of associated companies, and shows the tax, any marginal relief and the effective rate. Shareholders then pay dividend tax on any profit paid out to them as dividends, and the dividend tax calculator covers that step. The rates and thresholds page gathers the other figures for 2026/27.