UK Corporation Tax Rates 2026: 19%, 25% and Marginal Relief

Ask a founder what UK corporation tax is and most will answer "19%". That answer has been wrong since 1 April 2023 for any company making more than £50,000 of profit, yet it survives in a lot of what is still circulating. The 2026 answer is three numbers: 19%, 25%, and a 26.5% most owners have never heard of.

This guide covers how UK corporation tax actually works as of August 2026: the two headline rates, the marginal relief calculation with worked examples, the associated companies trap for founders with more than one company, what the Budget of 26 November 2025 changed, and the counterintuitive deadline where you pay the tax before you file the return.

• The short version. Profits up to £50,000 are taxed at 19%. Profits above £250,000 are taxed at 25%. In between, marginal relief applies, and every extra pound in that band costs you 26.5% at the margin. Payment is due 9 months and 1 day after your year end; the return itself is due 3 months later. And if you own more than one company, those thresholds shrink.

This is general information, not tax advice. All figures were checked against gov.uk in August 2026; confirm current rates with HMRC or a qualified UK accountant before relying on them.

UK corporation tax rates at a glance

The rates for the financial year starting 1 April 2026, confirmed unchanged by the Budget of 26 November 2025:

Three qualifications that the simple table hides, each covered below:

• The £50,000 and £250,000 thresholds are divided by the number of associated companies plus one, and prorated for accounting periods shorter than 12 months.
• The rate your company pays is determined by its augmented profits, which include most dividends it receives, even though those dividends are not themselves taxed.
• Within the marginal relief band, the marginal rate on each additional pound is 26.5%, higher than the main rate. This is arithmetic, not a typo.

This structure has been in place since 1 April 2023 and applies to every UK company, wherever its shareholders live. What it costs to set the company up in the first place is a different subject, covered in the UK formation cost guide.

19%small profits rate, on profits up to £50,000

25%main rate, on profits above £250,000

26.5%what every extra pound inside the £50,000 to £250,000 band actually costs

Is UK corporation tax still 19%?

No. The flat 19% rate for all companies ended on 1 April 2023. Since then, 19% is the small profits rate, reserved for companies with taxable profits of £50,000 or less (and fewer, if you have associated companies).

The myth persists for two reasons. First, incorporation marketing: "low 19% corporate tax" is still a selling line on formation sites written before 2023 and never updated. Second, most UK microbusinesses genuinely do pay 19%, because most make under £50,000, so the number keeps circulating as if it were the general rate.

For a founder planning around real numbers, the honest framing is this: 19% is the floor, 25% is the ceiling, and the band between them is more expensive at the margin than either. A company making £100,000 pays an effective 22.75%, as the next section shows, and every pound of growth between £50,000 and £250,000 is taxed at 26.5%.

How marginal relief works (and the 26.5% nobody mentions)

Companies with profits between £50,000 and £250,000 pay the 25% main rate on all profits, then subtract marginal relief:

Marginal relief = 3/200 × (£250,000 minus your augmented profits)

(When the company has distribution income, the result is also multiplied by the ratio of taxable profits to augmented profits; for a simple trading company the two are the same, so we leave that factor out of the examples.)

Two worked examples, side by side:

Now the number that rarely gets printed. At £50,000 the tax is £9,500. At £250,000 it is £62,500. The difference, £53,000 of tax on £200,000 of extra profit, works out to 26.5% on every pound inside the band. The effective rate glides smoothly from 19% to 25%, but the marginal rate, the tax on the next pound you earn, jumps to 26.5% the moment you cross £50,000 and stays there until £250,000.

That has a practical flip side: anything that deductibly removes a pound of profit from the band, a director's salary, a pension contribution, saves 26.5p, not 25p. For a non-resident owner deciding between salary and dividends, that deduction math is half the equation; the other half, how the salary and the dividends are taxed in your hands, lives in taxes for non-resident owners.

£50,000 profit19.0%

£100,000 profit22.75%

£150,000 profit24.0%

£250,000+ profit25.0%

Marginal rate inside the band26.5%

• Corporation tax due£22,750
• Left in the company£77,250

Associated companies: how the thresholds shrink

The £50,000 and £250,000 thresholds are per group of associated companies, not per company. If your company has associated companies, both thresholds are divided by the total number of associated companies plus one.

How fast the band compresses:

• Two companies under common control: each gets thresholds of £25,000 and £125,000.
• Three companies: £16,667 and £83,333.
• The trap is the word "worldwide". Broadly, companies count as associated when one controls the other or both are controlled by the same person, and foreign companies count.
• Short accounting periods compress the thresholds the same way: a 6 month period gets half the limits. First-year companies often have a short or split first period, so check your actual dates before assuming the full thresholds.

What counts as taxable profits (and the augmented profits trap)

Corporation tax is charged on the company's taxable total profits: trading profits, investment income such as interest, and chargeable gains on assets the company sells. Deductible business expenses, including salaries paid to directors wherever they live, come off before tax.

Dividends the company receives are different. Most dividends from other companies are exempt from corporation tax, but they still count toward augmented profits, the figure used to decide which rate band you are in and how much marginal relief you get.

The trap: a company with £45,000 of trading profit and £30,000 of dividend income pays tax only on the £45,000, but its augmented profits are £75,000, so it is priced in the marginal relief band rather than at the pure 19% small profits rate. Holding shares inside a trading company can silently raise the rate on the trading profit. If your UK company is meant to hold stakes in other companies, model this before assuming 19%.

When and how you pay: 9 months and 1 day, before you file

UK corporation tax runs on a calendar that surprises everyone who meets it: you pay before you declare.

• Payment is due 9 months and 1 day after the end of the accounting period.
• The CT600 return is due 12 months after the end of the accounting period.

For a company with a 31 December 2026 year end, the tax must be paid by 1 October 2027, while the return itself is not due until 31 December 2027. In practice, this means your accounts and tax computation need to exist well before the filing deadline, because you cannot pay an amount nobody has calculated. Treat the 9 month date, not the 12 month date, as the actual deadline.

Two edge cases for completeness. Companies with augmented profits above £1.5 million (again divided by associated companies plus one) pay in quarterly instalments that start during the accounting period itself. And there is no UK equivalent of a flat minimum tax: a company with zero profit owes zero corporation tax, though it still files.

Miss the deadlines and two separate penalty regimes engage, one from HMRC for the return and one from Companies House for the accounts; the merged calendar and both penalty tables live in the compliance guide. The headline you need here: a late CT600 costs £200 immediately under the rates in force since 1 April 2026, and unpaid tax accrues interest from day one.

31 Dec 2026Year end

1 Oct 2027Pay the corporation tax (9 months and 1 day)

31 Dec 2027File the CT600 (12 months)

1. 31 Dec 2026Year end
2. 1 Oct 2027Pay the corporation tax (9 months and 1 day)
3. 31 Dec 2027File the CT600 (12 months)

What the November 2025 Budget changed (and what it didn't)

Guidance written in mid 2026 often still says "no changes announced". Here is what the Budget of 26 November 2025 actually did, as reflected on gov.uk as of August 2026:

• What did not change: the rates. 19%, 25% and the 3/200 marginal relief fraction were all confirmed for the financial year starting 1 April 2026.

What changed:

• Late filing penalties for the CT600 doubled on 1 April 2026. The flat penalty is now £200 from day one, a further £200 at 3 months, then 10% of the unpaid tax at 6 months and another 10% at 12 months. File late three accounting periods in a row and the flat penalties quintuple to £1,000 each. Older guidance still quotes £100.
• Capital allowances were reshaped. A 40% first year allowance applies to qualifying main rate expenditure from 1 January 2026, while the writing down allowance main rate drops from 18% to 14% from 1 April 2026. Net effect: more relief up front, slower relief on the remainder.
• Dividend tax rates rise by 2 points from 6 April 2026 for UK resident individuals. That is an owner-level change, not a company one, and for non-resident owners it mostly does not bite, for reasons explained in taxes for non-resident owners.

Corporation tax when the owner lives abroad

A question none of the domestic UK tax blogs answers: does any of this change if the shareholder lives in Dubai, Paris or Tbilisi?

For the company, no. A UK incorporated company is UK tax resident by incorporation and pays corporation tax on its worldwide profits at exactly the rates above, whether its owner lives in London or has never set foot in the country. There is no non-resident discount and no non-resident surcharge at company level.

What changes is the layer on top: how you extract money as dividends or salary, what the UK withholds on the way out (spoiler: on dividends, nothing), and what your own country of residence taxes. That entire layer, including the disregarded income rule that usually reduces UK tax on a non-resident's dividends to zero, is the subject of UK company taxes for non-resident owners. Whether you can set the company up from abroad at all, and what it requires, is covered in the non-resident guide.