UK Corporation Tax & Marginal Relief Calculator
Estimate your company’s Corporation Tax liability, marginal relief savings, and effective tax rate under HMRC’s tiered tax brackets.
Your liability is reduced from a flat 25% rate because profits fall under the £250,000 upper limit.
Tax Band Visualizer
Tax Liability Calculation Schedule
HMRC Marginal Relief Rules & Guidance
What is HMRC Marginal Relief?
Marginal Relief bridges the gap between the Small Profits Rate (19% for profits up to £50,000) and the Main Rate (25% for profits over £250,000). It ensures that a company’s effective tax rate scales up gradually from 19% to 25%, preventing a sudden tax penalty when profit exceeds the small profits limit.
How is the 3/200 fraction applied?
The marginal relief deduction is calculated using the formula: (Upper Limit - Profit) * (3/200). This fraction (0.015) mathematically lowers the effective corporation tax liability so that the profit between the lower and upper limits is taxed at a marginal rate of exactly 26.5%.
What is an Associated Company?
A company is associated with another if one has control of the other, or both are under control of the same person or persons (including spouses or close relatives). Associated companies divide the lower and upper limits, which prevents business owners from splitting profits across multiple entities to exploit the 19% small profits rate.
What is excluded from marginal relief?
Non-UK resident companies and close investment-holding companies (e.g. companies holding passive residential property portfolios) are generally excluded from the Small Profits Rate and are taxed at a flat 25% regardless of profit.
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