Corporation tax calculator, 2026/27

How corporation tax works for a limited company

Corporation tax is charged on your company's taxable profit, accounting profit adjusted for disallowable costs such as client entertaining, plus capital allowances on qualifying equipment, and reduced by reliefs such as R&D or pension contributions actually paid.

Since April 2023 there have been two rates. Profits up to £50,000 are taxed at 19%. Profits over £250,000 are taxed at 25% on the whole amount. Between those figures the 25% rate applies with marginal relief, which produces a sliding effective rate, and a marginal rate of 26.5% on the profits in that band.

The thresholds are divided by the number of associated companies, so two companies under common control each get a £25,000 lower limit rather than £50,000 apiece. This catches a lot of directors who set up a second company without advice.

Dates that matter

Payment is due nine months and one day after the end of the accounting period. The CT600 return is not due until twelve months after the period end, so most companies pay before they file.

Companies with profits above £1.5 million pay in quarterly instalments instead, and very large companies pay earlier still.

Interest runs from the payment date, so filing early does not help cash flow, knowing the number early does.

Ways the bill legitimately comes down

Employer pension contributions paid before the year end, capital allowances including full expensing on qualifying new plant and machinery, R&D relief on genuine technical development, and correctly claimed employment allowance all reduce taxable profit.

Timing matters more than most directors expect. A cost incurred a week before your year end lands in this period; a week after and it waits a year.

What is the corporation tax rate for a small company in 2026/27?

19% on taxable profits up to £50,000. Between £50,000 and £250,000 the 25% rate applies with marginal relief, and above £250,000 the full 25% main rate applies.

When do I pay corporation tax?

Nine months and one day after your accounting period ends, unless your profits exceed £1.5 million, in which case quarterly instalments apply.

Does a dormant company pay corporation tax?

No. A genuinely dormant company has no taxable profit, but you still need to tell HMRC it is dormant and keep filing accounts and a confirmation statement at Companies House.

Can I reduce my corporation tax bill legitimately?

Yes, by claiming everything the company is entitled to: capital allowances on equipment, employer pension contributions, genuine business expenses, and reliefs such as R&D where the work qualifies. Timing a purchase before the year end can also move the deduction into the current period.