Corporation Tax Calculator UK 2026
Calculate your corporation tax liability for the 2026 tax year
How Your Corporation Tax is Calculated
Tax Rates for 2026:
• Profits under £50,000: 19% (Small Profits Rate)
• Profits £50,000 - £250,000: 25% with Marginal Relief
• Profits over £250,000: 25% (Main Rate)
What is Corporation Tax?
Corporation Tax is a tax on the profits your limited company makes. If you run a limited company in the UK, you must pay Corporation Tax on your taxable profits, which include your trading profits and any money you make from investments or selling assets for more than they cost.
The current Corporation Tax rates in the UK are:
- 19% for companies with profits up to £50,000 (small profits rate)
- 25% for companies with profits over £250,000 (main rate)
- Marginal relief applies if your profits fall between £50,000 and £250,000
Every limited company must pay Corporation Tax, even if you’ve made only a small profit. Sole traders and partnerships don’t pay Corporation Tax—they pay Income Tax instead through Self Assessment.
How do I calculate corporation tax?
Calculating Corporation Tax involves working out your company’s taxable profits and applying the correct tax rate.
Step 1: Calculate your taxable profit Start with your total income and subtract allowable business expenses. Your taxable profit is what’s left after deducting costs like salaries, rent, equipment, professional fees, and other day-to-day running costs.
Step 2: Apply the correct tax rate Once you know your profit, apply the relevant rate:
- Profits up to £50,000: 19%
- Profits between £50,000 and £250,000: You’ll pay 25% but can claim marginal relief, which reduces your bill
- Profits above £250,000: 25%
Example calculation: If your company makes £60,000 profit, you fall into the marginal relief band. Your Corporation Tax would be approximately £11,750 after marginal relief is applied (not the full 25%).
The profit thresholds are divided by the number of associated companies you have, so if you control multiple companies, your limits will be lower.
When do I need to pay my Corporation tax by?
You must pay your Corporation Tax 9 months and 1 day after the end of your accounting period (your company’s financial year).
For example, if your accounting period ends on 31 March 2025, your Corporation Tax payment is due by 1 January 2026.
Filing your Corporation Tax return is different While you pay 9 months after your year-end, you must file your Company Tax Return (CT600) within 12 months of the end of your accounting period. Don’t confuse the payment deadline with the filing deadline, they’re not the same.
If you’re a large company (profits over £1.5 million), you’ll need to pay Corporation Tax in quarterly instalments, which have different deadlines.
Missing the payment deadline means HMRC will charge you interest on the unpaid amount from the due date until you pay.
How to pay Corporation Tax
HMRC offers several ways to pay your Corporation Tax bill:
Online or telephone banking: This is the quickest method. You’ll need your 17-character Corporation Tax payment reference, which HMRC sends you when you register for Corporation Tax. Payments can take 3-5 working days to reach HMRC.
Direct Debit: Set up a Direct Debit through your HMRC online account. This lets you choose a payment date, but you need to set it up at least 5 working days before you want to pay.
Debit or corporate credit card online: Pay directly through HMRC’s website using a debit or corporate credit card. The payment shows in your account within 3 working days. Personal credit cards aren’t accepted.
By cheque: Send a cheque made payable to ‘HM Revenue and Customs only’ with your payment reference. Post it to: HM Revenue and Customs, Direct, BX5 5BD. Allow at least 3 working days for delivery.
At your bank or building society Use a paying-in slip from HMRC with your payment reference. Take it to your bank with your cheque or cash.
Always use your unique Corporation Tax payment reference, without it, HMRC won’t know the payment is from you, and you could face late payment penalties.
How do I know if HMRC got my Corporation Tax bill payment?
After you make a payment, you can check if HMRC received it through your Corporation Tax online account.
Log into your account and look at your payment history. Payments typically appear within:
- 3-5 working days for online or telephone banking
- 3 working days for debit/credit card payments
- Up to 7 working days for cheque payments
If your payment doesn’t show: Wait until the processing time has passed, then check again. If it’s still not there after the expected timeframe, contact HMRC’s Corporation Tax helpline on 0300 200 3410.
Keep proof of payment (bank statement, transaction reference) in case there’s any dispute. If you paid by cheque, keep a copy of the cheque and the posting receipt.
You can also check for any outstanding balance in your Corporation Tax account. If the balance shows as nil after your payment date, HMRC has received and processed your payment.
How can I be more tax-efficient?
Reducing your Corporation Tax legally means maximising your allowable deductions and reliefs.
Claim all allowable expenses: Make sure you’re claiming every business expense you’re entitled to: office costs, travel, staff salaries, professional subscriptions, software, marketing, and training. The more legitimate expenses you claim, the lower your taxable profit.
Use capital allowances: When you buy equipment, vehicles, or machinery, you can claim capital allowances. The Annual Investment Allowance lets you deduct 100% of qualifying spending up to £1 million in the year you buy it.
Pay yourself a salary: Directors’ salaries are a business expense that reduces your profit. There’s a tax-efficient balance between salary and dividends—many accountants recommend a small salary (around the National Insurance threshold) topped up with dividends.
Contribute to a pension: Company pension contributions are allowable expenses. Paying into a pension reduces your Corporation Tax bill while building retirement savings.
Claim R&D tax relief: If your company develops new products, processes, or services, you might qualify for Research and Development tax relief, which gives you extra deductions on qualifying spending.
Time your expenses: If you’re near a tax threshold, consider whether to make purchases before or after your year-end to manage which year’s profit they reduce.
Get professional advice: A qualified accountant can identify reliefs and allowances specific to your business that you might miss. They’ll also ensure you stay compliant while minimising your tax bill.
FAQs: Corporation Tax Calculator UK
How do I calculate corporation tax in the UK?
Calculate your taxable profit (income minus allowable expenses), then apply the Corporation Tax rate. Companies with profits up to £50,000 pay 19%, those over £250,000 pay 25%, and those in between get marginal relief.
Who will pay the 25% corporation tax?
Companies with taxable profits above £250,000 pay the 25% Corporation Tax rate. If you have associated companies, this threshold is divided between them.
How do I avoid 25% corporation tax?
You can’t avoid it if your profits exceed £250,000, but you can reduce taxable profit by claiming all allowable expenses, capital allowances, pension contributions, and R&D relief. Profits between £50,000 and £250,000 receive marginal relief, lowering the effective rate.
How much corporation tax would you pay on £60,000 a year in the UK?
On £60,000 profit, you’d pay approximately £11,750 in Corporation Tax after marginal relief is applied. This works out to an effective rate of around 19.6%, not the full 25%.
Do I need to pay Corporation Tax if I make no profit?
No. If your company makes no profit or makes a loss, you pay no Corporation Tax. You still need to file your Company Tax Return to tell HMRC about your loss.
What happens if I pay my Corporation Tax late?
HMRC charges interest on late payments from the due date until you pay. The interest rate varies, currently around 7.25%. You won’t get a penalty for late payment, but you will for late filing.
Can I pay Corporation Tax in instalments?
Only very large companies (profits over £1.5 million) must pay in quarterly instalments. Smaller companies pay the full amount in one payment. If you’re struggling, contact HMRC to discuss a payment plan.
What's the difference between Corporation Tax and Income Tax?
Corporation Tax is paid by limited companies on their profits. Income Tax is paid by individuals (including sole traders) on their personal income. If you’re a company director, your company pays Corporation Tax, and you pay Income Tax on your salary and dividends.
Do I need an accountant to calculate Corporation Tax?
No, you can calculate and file it yourself. However, an accountant can identify tax reliefs you might miss, ensure accuracy, and save you time. For many businesses, the tax savings cover the accountant’s fees.
What counts as an allowable expense for Corporation Tax?
Any cost incurred “wholly and exclusively” for business purposes: salaries, rent, utilities, equipment, travel, professional fees, marketing, insurance, and subscriptions. Personal expenses don’t count.
How far back can HMRC investigate my Corporation Tax?
Normally 4 years, but if they suspect serious errors or deliberate mistakes, they can go back 6 years. In cases of deliberate tax evasion, there’s no time limit.
Can I carry forward a Corporation Tax loss?
Yes. If your company makes a loss, you can carry it forward to reduce profits (and therefore Corporation Tax) in future years. You can also carry back losses to the previous year in some cases.
Do I pay Corporation Tax on dividends I receive?
If your company receives dividends from another UK company, these are usually exempt from Corporation Tax. However, you personally pay tax on dividends you take from your own company through Self Assessment.
What is marginal relief and how does it work?
Marginal relief is a gradual transition between the 19% and 25% rates for companies with profits between £50,000 and £250,000. It means you don’t suddenly jump from 19% to 25%, the rate increases gradually.
When do I need to register for Corporation Tax?
You must register within 3 months of starting to trade or starting your business. HMRC will send you a Unique Taxpayer Reference (UTR) which you need for filing returns and paying tax.