Corporation tax rates
| Year from 1 April | 2023 | 2022 |
| Main rate | 25% | 19% |
| Small profits rate | 19% | – |
| Small profits rate where profits don’t exceed: | £50,000 | – |
| Marginal relief lower limit | £50,000 | – |
| Marginal relief upper limit | £250,000 | – |
| Standard fraction | 3/200 | – |
Example:
Accounting period 1 April 2023 to 31 March 2024
Company’s profit £100,000
Corporation Tax liability
£22,750
Reduced from £25,000 after £2,250 Marginal Relief
| Corporation Tax liability before Marginal Relief | £25,000.00 |
|---|---|
| Marginal Relief | -£2,250.00 |
| Corporation Tax liability after Marginal Relief | £22,750.00 |
How it’s calculated Marginal Relief for your accounting period
For financial year 2023 to 2024 (366 days)
| No header | Calculation variables | Calculation | Result |
|---|---|---|---|
| Step 1 | Adjusted upper limit | £250,000 upper limit × (366 days ÷ 366 days) ÷ (0 associated companies + 1 original company) | £250,000 |
| Step 2 | Taxable profit | £100,000 × (366 days ÷ 366 days) | £100,000 |
| Step 3 | Taxable profit including distributions | (£100,000 + £0) × (366 days ÷ 366 days) | £100,000 |
| Step 4 | Marginal Relief fraction | The set fraction used by HMRC to provide a gradual increase in rate | 3 ÷ 200 |
| Step 5 | Full calculation | (£250,000 – £100,000) × (£100,000 ÷ £100,000) × (3 ÷ 200) | £2,250 |