Corporation Tax calculator
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Work out your Corporation Tax, including marginal relief and the associated companies rule that most calculators ignore. Enter your profit, your accounting period and how many other companies you control, and see your bill, your effective rate, and your payment and filing deadlines.
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Figures are correct at the date of review. Always check GOV.UK for the latest, and confirm your figure before you pay.
How Corporation Tax is actually calculated
Corporation Tax is charged on your taxable profit, not your turnover, and there are three bands.
- Up to £50,000: the small profits rate, 19%.
- Over £250,000: the main rate, 25%.
- Between £50,000 and £250,000: the main rate, less Marginal Relief, which tapers the rate so it climbs smoothly from 19% to 25%.
Here is the arithmetic for a company with £100,000 of profit and no associated companies, which sits in the marginal band:
- Start at the main rate: £100,000 x 25% = £25,000.
- Marginal Relief: (£250,000 - £100,000) x 3/200 = £150,000 x 0.015 = £2,250.
- Corporation Tax due: £25,000 - £2,250 = £22,750. An effective rate of 22.75%.
One quirk worth knowing: each extra pound of profit in that middle band is effectively taxed at 26.5%, even though your average rate is lower. That is Marginal Relief being withdrawn as you climb.
What most Corporation Tax calculators get wrong
Associated companies. Almost every calculator online assumes the limits are £50,000 and £250,000 and never asks whether you have another company. If you do, the limits divide by the number of associated companies, including this one. One associate and your small-profits threshold halves to £25,000. Three, and it drops to £12,500, with the upper limit down to £62,500.
A director with two companies gets a materially wrong answer and has no idea. Take £45,000 of profit and one associated company. Ignore the associate and a naive calculator sees £45,000, under £50,000, and charges 19%: £8,550. Include it and the lower limit halves to £25,000, so £45,000 is now in the marginal band, and the real bill is £10,050. That is £1,500 a careless calculator would have hidden from you, and it is HMRC's money, not yours.
Not sure whether a second company counts? Broadly it does if the same person or people control both, worldwide, unless it is dormant. If in doubt, it is worth a quick check with us.
Payment is due before the return
This surprises almost everybody. Your Corporation Tax payment is due 9 months and 1 day after your period ends. Your return is not due until 12 months. That is a three month gap, and the money is due first. You work out what you owe, pay it, and file afterwards. Full detail on how to pay your Corporation Tax bill.
Corporation Tax calculator: frequently asked questions
How is Corporation Tax calculated?+
On taxable profit, not turnover. Up to £50,000 the rate is 19%. Over £250,000 it is 25%. Between the two you pay 25% less Marginal Relief, which tapers the rate. The £50,000 and £250,000 limits are divided by the number of associated companies and reduced for periods shorter than 12 months.
What is Marginal Relief?+
A reduction that eases the jump from 19% to 25% for profits between £50,000 and £250,000. It is the upper limit minus your profit, multiplied by 3/200. On £100,000 with no associated companies that is (£250,000 - £100,000) x 3/200 = £2,250, so the bill is £25,000 - £2,250 = £22,750.
What counts as an associated company?+
Broadly, another company that controls yours, that yours controls, or that is under the same control as yours, worldwide, excluding dormant companies. Each one divides your limits. One associate halves them to £25,000 and £125,000. This is the input most calculators leave out.
Does the length of my accounting period matter?+
Yes. For a period shorter than 12 months the £50,000 and £250,000 limits are reduced in proportion (days divided by 365), so a six-month period roughly halves them.
When do I have to pay?+
Nine months and one day after your accounting period ends, if taxable profits are £1.5m or less. The payment is due before your return, which is due at 12 months. Profits over £1.5 million are paid in quarterly instalments instead.
Is this calculator accurate?+
It applies the same rules as HMRC’s own Marginal Relief calculator: the 19% and 25% rates, the 3/200 fraction, associated companies, short periods and periods straddling 1 April. It assumes no exempt distributions from non-group companies, which is the case for almost every small company. Always confirm your figure on GOV.UK before you pay.
Related and next steps
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