Has the 25% Corporation Tax rate changed for 2026?

No — the main rate remains 25% for profits above £250,000, with the 19% small profits rate below £50,000 and marginal relief in between. HMRC has not signalled a rate change in the current fiscal cycle.

Do I have to pay Corporation Tax if my company made a loss?

No — no profit means no Corporation Tax. But you still need to file a CT600 to declare the loss, and you can carry the loss back one year or forward against future profits.

How do associated companies affect my Corporation Tax bill?

They divide the £50k and £250k thresholds equally. Two associated UK companies each get bands of £25k and £125k. Dormant companies count. This often pushes founder-led groups into the marginal band unexpectedly.

When is Corporation Tax due?

9 months and 1 day after the end of the accounting period for non-large companies. The CT600 return is due 12 months after period-end. Interest accrues from the payment date, not the filing date.

Can I claim R&D tax credits alongside marginal relief?

Yes. R&D credits reduce taxable profits (or generate a payable credit for loss-makers) before marginal relief is calculated, so eligible SMEs can meaningfully reduce their effective rate.

Tax· United Kingdom

UK Corporation Tax Rate 2026: Rates, Marginal Relief & Filing Guide

The UK Corporation Tax rate is 25% for profits above £250,000 and 19% below £50,000 — but the marginal band in between catches most SMEs off guard. Here's how it really works in 2026.

8 min read · 11 July 2026

UK Corporation Tax rates for 2026 at a glance

For accounting periods ending in the 2026 tax year, UK Corporation Tax has three effective bands. Companies with taxable profits up to £50,000 pay the small profits rate of 19%. Companies above £250,000 pay the main rate of 25%. Between £50,000 and £250,000, marginal relief applies — producing an effective marginal rate of 26.5% on profits inside the band.

The bands are pro-rated for short accounting periods and reduced where you have associated companies (see below). The £90,000 VAT registration threshold is unrelated — VAT and Corporation Tax use different thresholds and different filing cycles.

How marginal relief actually works

Marginal relief tapers the small profits rate up to the main rate across the £50,000–£250,000 band. The formula HMRC uses is: marginal relief = (upper limit − profits) × (standard fraction) × (basic profits ÷ profits). The standard fraction for FY2026 is 3/200.

In practice: a company with £150,000 of taxable profits pays £34,750 in Corporation Tax — an effective rate of 23.17%. Because the marginal-band effective rate is 26.5%, the last pound of profit added inside the band costs more than a pound would at the main rate. That matters for bonus timing and R&D relief decisions.

Associated companies: the trap that catches groups

The £50,000 and £250,000 thresholds are divided by the number of associated companies. Two associated UK companies each get thresholds of £25,000 and £125,000. Five associated companies each get £10,000 and £50,000 — meaning even modest profits land in the marginal band or above.

Associated companies are broadly any UK or overseas companies under common control (>50% shareholding or the same controlling group). Founders with multiple SPVs, holding companies or dormant sister entities often miscalculate the bands because they forget to include them. Dormant companies count.

Filing deadlines and payment dates

The Corporation Tax return (CT600) is due 12 months after the end of the accounting period. The tax itself is due earlier — 9 months and 1 day after period end for companies not required to pay by quarterly instalments.

Large companies (profits > £1.5m, divided by associated companies) pay by quarterly instalments in months 7, 10, 13 and 16 of the accounting period. Very large companies (profits > £20m) pay earlier still. Missing the payment date triggers HMRC interest immediately — the return deadline is the ceiling, not the payment date.

Reliefs that reduce the effective rate

The three highest-ROI Corporation Tax reliefs for UK SMEs in 2026 are: R&D tax credits (SME scheme now merged with RDEC — an above-the-line credit at 20%), the Annual Investment Allowance (£1m of 100% first-year relief on plant and machinery), and full expensing (100% first-year allowance on new main-rate plant, uncapped).

Loss relief also matters — trading losses can be carried back one year, or set against total profits going forward. Groups can surrender losses between UK members. Modelling these reliefs before the year-end (not after) is where most of the saving is captured.

How to file your Corporation Tax return

The CT600 is filed online through HMRC's Corporation Tax service or via commercial software (Xero Tax, TaxCalc, IRIS, Alphatax). You'll also submit iXBRL-tagged statutory accounts and computations alongside the return.

NovaLedge prepares statutory accounts, tags them in iXBRL, computes the Corporation Tax liability with marginal relief and associated companies applied correctly, and submits the CT600 to HMRC on your behalf — usually as part of a bundled year-end + tax service. Try our free UK Corporation Tax calculator to model your liability before we get to work.

Frequently asked questions

Has the 25% Corporation Tax rate changed for 2026?: No — the main rate remains 25% for profits above £250,000, with the 19% small profits rate below £50,000 and marginal relief in between. HMRC has not signalled a rate change in the current fiscal cycle.
Do I have to pay Corporation Tax if my company made a loss?: No — no profit means no Corporation Tax. But you still need to file a CT600 to declare the loss, and you can carry the loss back one year or forward against future profits.
How do associated companies affect my Corporation Tax bill?: They divide the £50k and £250k thresholds equally. Two associated UK companies each get bands of £25k and £125k. Dormant companies count. This often pushes founder-led groups into the marginal band unexpectedly.
When is Corporation Tax due?: 9 months and 1 day after the end of the accounting period for non-large companies. The CT600 return is due 12 months after period-end. Interest accrues from the payment date, not the filing date.
Can I claim R&D tax credits alongside marginal relief?: Yes. R&D credits reduce taxable profits (or generate a payable credit for loss-makers) before marginal relief is calculated, so eligible SMEs can meaningfully reduce their effective rate.