Corporation Tax Rates and Reliefs for 2025/26
Corporation tax is the tax charged on the profits of UK limited companies. Understanding the rates and available reliefs is essential for company tax planning.
**The main rate**
For the 2025/26 tax year, the main rate of corporation tax is 25%. This applies to companies with profits over £250,000. However, smaller companies benefit from a lower rate.
**The small profits rate**
Companies with profits of £50,000 or less pay corporation tax at 19%. This is significantly lower than the main rate and is designed to support smaller businesses.
**Marginal relief**
For companies with profits between £50,000 and £250,000, marginal relief applies. This means the tax rate gradually increases from 19% to 25% as profits rise. The effective rate is calculated to ensure there's no sudden jump in tax liability at the £50,000 threshold.
**Available reliefs**
Companies can claim various reliefs to reduce their taxable profit. These include capital allowances on plant and machinery, research and development relief, and losses carried forward from previous years. Understanding these reliefs is crucial for minimising your tax bill.
**Losses**
If your company makes a loss, you can carry it forward to offset against future profits. You can also carry losses back to the previous year, though this is subject to restrictions. Losses can also be offset against other income in certain circumstances.
**Timing of relief**
The timing of when you claim relief can affect your tax bill. For example, if you're expecting profits to increase, it might be beneficial to claim certain reliefs in the current year rather than carrying them forward.
**Learn more:** For professional guidance on this topic, visit [Accounted For Ltd](https://accountedforltd.co.uk/corporation-tax).
Learn more: For professional guidance on this topic, visit Accounted For Ltd