Corporation Tax rates and reliefs
Printable version
1. Rates
The Corporation Tax rate for company profits is 25%
You pay Corporation Tax at the rates that applied in your company’s accounting period for Corporation Tax.
If your company made more than £250,000 profit, you’ll pay the main rate of Corporation Tax.
If your company made a profit of £50,000 or less, you’ll pay the ‘small profits rate’, which is 19%.
You may be entitled to ‘Marginal Relief’ if your profits were between £50,000 and £250,000.
The £50,000 and £250,000 profit thresholds are proportionately reduced for short accounting periods and by the total number of ‘associated companies’ your company has.
There are different rates for ‘ring fence’ profits of companies involved in oil rights or extraction in the UK or UK continental shelf.
You may be able to get deductions or claim tax credits on your Corporation Tax. These are known as allowances and reliefs.
Previous rates
From 1 April 2015 to 31 March 2023, a single rate of Corporation Tax applied to all companies.
The rate you pay on profits from before 1 April 2015 depends on the size of your profits.
Work out your profits when you prepare your Company Tax Return.
If more than one rate applies in your accounting period
Work out how many days each rate applied, then work out the tax due for each.
For example, if your accounting period is 1 January 2023 to 31 December 2023 you pay:
- the rate for the financial year starting 1 April 2022 for 90 days (1 January 2023 to 31 March 2023)
- the rate for the financial year starting 1 April 2023 for 275 days (1 April 2023 to 31 December 2023)
2. Allowances and reliefs
You can deduct the costs of running your business from your profits before tax when you prepare your company’s accounts.
Anything you or your employees get personal use from must be treated as a benefit.
Some expenses are not allowed for Corporation Tax, for example entertaining clients - add these back to your profits when you prepare your Company Tax Return.
Capital allowances
Claim capital allowances if you buy assets that you keep to use in your business, for example:
- equipment
- machinery
- business vehicles, for example cars, vans, lorries
Other reliefs
You may be able to make a claim for:
- Research and Development (R&D) Relief
- The Patent Box if your company makes a profit from patented inventions
- reliefs for creative industries (CITR) if your company makes a profit from theatre, film, television, animation or video games
- relief on goodwill and other relevant assets, such as customer relationships and unregistered trade marks
- Disincorporation Relief if you’re closing your company and becoming a sole trader, ordinary business partnership or limited partnership
- terminal, capital and property income losses
- trading losses
Marginal Relief
Your company or organisation may be entitled to ‘Marginal Relief’ if its taxable profits from 1 April 2023 are between £50,000 and £250,000.