As 2026 unfolds, UK limited companies continue to navigate a stable but tiered Corporation Tax system that has been in place since April 2023. The government has confirmed no major rate changes for the financial year starting 1 April 2026, with the main rate capped at 25% for the duration of the current parliament. This predictability helps directors and accountants plan ahead, especially alongside other 2026 updates like reduced writing down allowances from April and mandatory identity verification at Companies House.

Understanding your Corporation Tax liability is essential for budgeting, cash flow, and avoiding penalties. This guide explains the current rates, key thresholds, how to calculate your tax bill, and practical steps to stay compliant.

Corporation Tax Rates in 2026

The structure remains unchanged from previous years:

  • Small profits rate: 19% applies if your taxable profits (also called augmented profits, including exempt dividends) are £50,000 or less.
  • Main rate: 25% applies if profits exceed £250,000.
  • Marginal relief: For profits between £50,001 and £250,000, you pay the main 25% rate but receive marginal relief, creating an effective gradual increase from 19% to 25%.

These thresholds are divided by the number of associated companies (worldwide active companies under common control), so a group of two companies sees limits halved to £25,000 and £125,000. Short accounting periods also reduce them proportionately.

Note that while core rates stay the same, related changes include a drop in the main writing down allowance for capital assets from 18% to 14% starting 1 April 2026 (with hybrid rates for straddling periods) and a new 40% first-year allowance for certain main pool expenditure from January 2026. These affect deductions and effective tax burdens but not the headline rates.

How to Calculate Your Corporation Tax Liability

Start with your taxable profits: this is your accounting profit after allowable deductions, adjustments for capital allowances, and adding back non-deductible expenses.

  1. Determine your profit band Check augmented profits against the thresholds (adjusted for associated companies or short periods).
  2. Apply the appropriate rate
    • If £50,000 or below: Tax = profits × 19%.
    • If over £250,000: Tax = profits × 25%.
    • If between £50,001 and £250,000: Tax = profits × 25%, minus marginal relief.
  3. Calculate marginal relief The formula is: Marginal relief = (Upper limit – augmented profits) × (Basic profits / Augmented profits) × Fraction (3/200). For example, a standalone company with £150,000 taxable profits: Tax at main rate = £150,000 × 25% = £37,500. Marginal relief = (£250,000 – £150,000) × (3/200) = £100,000 × 0.015 = £1,500. Final tax = £37,500 – £1,500 = £36,000 (effective rate around 24%).

HMRC provides an online marginal relief calculator for precision. Always factor in associated companies, as they lower thresholds and can push you into higher effective rates.

Payment and Filing Deadlines

Corporation Tax payment is due 9 months and 1 day after your accounting period ends. For a 31 March 2026 year-end, pay by 1 January 2027. The Company Tax Return (CT600) follows within 12 months, so by 31 March 2027 in this case. Large companies (profits over £1.5 million) pay in quarterly instalments.

Late payment attracts interest (currently around 7.75%), and late filing penalties start at £100, rising over time. From April 2026, some late filing penalties double, adding urgency.

Why Staying on Top of Compliance Helps in 2026

With stable rates but evolving rules around capital allowances, Making Tax Digital expansions, and Companies House requirements (like identity verification deadlines), monitoring your company’s status and linked obligations prevents surprises.

The UK Companies House On The Go app supports this by delivering real-time notifications for filing deadlines, company updates, officer details, and compliance changes directly from Companies House data. It simplifies tracking multiple companies or clients through quick searches, favourites, and priority lists, all in a secure, GDPR-compliant mobile format.

Whether calculating your tax liability or ensuring filings align, having instant alerts reduces risk and saves time.

Final Thoughts: Plan Smart for 2026

Corporation Tax rates hold steady in 2026 at 19% for small profits, 25% main rate, and marginal relief in between, offering certainty for budgeting. Calculate accurately using the steps above, claim all reliefs, and prepare for payment well in advance.

Tools like the UK Companies House On The Go app keep your broader compliance in check with real-time reminders, making it easier to focus on growth.

Download the UK Companies House On The Go app today for seamless tracking and alerts.

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