UK Business Tax Calculator
🏢 Business Profit Details
📊 Business Tax Results
Enter your business profit details above and click "Calculate Business Tax" to see your estimated tax.
We'll show you the applicable rate and estimated Corporation Tax for your business.
What Is Corporation Tax for UK Businesses?
Corporation Tax is a tax on the profits of UK limited companies and other incorporated organisations. It is charged on:
- Trading profits from business activities
- Investment income (including interest and rental income)
- Chargeable gains from selling assets
Unlike Income Tax, which is paid by individuals, Corporation Tax is paid by companies directly to HMRC. The rate depends on the company's taxable profit for the accounting period.
This UK Business Tax Calculator helps company directors, business owners and accountants estimate Corporation Tax liabilities based on business profits. It uses the current UK Corporation Tax rates and thresholds to provide an accurate estimate.
How Corporation Tax Is Calculated for Your Business
Corporation Tax is calculated by applying the applicable tax rate to the company's taxable profit. The taxable profit is calculated as:
The tax rate applied depends on the level of taxable profit [citation:10]:
- Small Profits Rate (19%) — applies to profits of £50,000 or less
- Marginal Relief — applies to profits between £50,000 and £250,000
- Main Rate (25%) — applies to profits of £250,000 or more
This calculator automatically determines which rate applies and calculates the Corporation Tax liability accordingly.
UK Corporation Tax Rates for Businesses
For the 2025-2026 tax year, the Corporation Tax rates are [citation:9][citation:6]:
- Small Profits Rate: 19% on profits up to £50,000.00
- Main Rate: 25% on profits over £250,000.00
- Marginal Relief: Applies to profits between £50,000.00 and £250,000.00
These rates apply from 1 April 2023 onwards. For detailed and authoritative information, visit the official GOV.UK Corporation Tax Rates page.
Small Profits Rate and Main Rate for Businesses
The Small Profits Rate (19%) applies to companies with taxable profits of £50,000 or less. This lower rate is designed to support smaller businesses by reducing their Corporation Tax burden.
The Main Rate (25%) applies to companies with taxable profits of £250,000 or more. Companies with profits above this threshold pay the higher rate on all their taxable profits [citation:1].
For companies with profits between £50,000 and £250,000, Marginal Relief reduces the effective tax rate, creating a gradual transition between the two rates.
For comparison, you might also want to check the UK Tax Rate Calculator for personal tax rates.
What Is Marginal Relief?
Marginal Relief is a tax relief that applies when a company's taxable profits fall between the lower and upper limits (£50,000 to £250,000) [citation:10]. It gradually increases the effective tax rate from the Small Profits Rate (19%) to the Main Rate (25%) as profits increase.
The relief effectively reduces the Corporation Tax bill for companies that would otherwise face a sudden jump in tax when their profits exceed the lower limit. This ensures a smoother transition between the two rates.
If your company has associated companies, these thresholds are divided by the number of associated companies. This calculator provides an estimate for standard companies without associated companies.
For more detailed information, refer to GOV.UK's guidance on Corporation Tax rates and reliefs.
What Counts as Taxable Business Profit?
Taxable profit is not the same as accounting profit. Several adjustments are made to accounting profit to arrive at the taxable profit figure for Corporation Tax purposes.
Key components of taxable profit include:
- Trading income — profits from the company's main business activities
- Non-trading income — interest, rental income, and other investment income
- Chargeable gains — profits from selling business assets
- Less: allowable business expenses
- Less: capital allowances
- Plus: certain disallowable expenses (e.g., entertainment costs)
If you're self-employed or a sole trader, you might be interested in our UK Self Employed Tax Calculator instead.
Allowable Expenses and Corporation Tax
Allowable expenses are costs that can be deducted from business income before calculating Corporation Tax [citation:10]. These typically include:
- Staff salaries and wages
- Office costs and utilities
- Travel and subsistence (business-related)
- Marketing and advertising costs
- Professional fees (accountants, solicitors)
- Rent and business rates
- Insurance premiums
- Repairs and maintenance
Not all business costs are allowable. For example, entertainment expenses and fines are generally not deductible for tax purposes. This calculator allows you to enter your allowable expenses to estimate your taxable profit.
Capital Allowances and Corporation Tax
Capital allowances are tax deductions for the cost of qualifying business assets (capital expenditure). Instead of deducting the full cost of an asset in one year, you can claim capital allowances over time.
Common capital allowances include [citation:10]:
- Annual Investment Allowance (AIA) — 100% relief on qualifying plant and machinery up to £1 million
- Writing Down Allowance — relief on assets not covered by AIA
- Full Expensing — 100% relief on certain new plant and machinery
This calculator includes a capital allowances field to help you estimate your taxable profit. However, calculating the exact capital allowance claim can be complex, and you should consult a qualified accountant for detailed advice.
Corporation Tax vs Income Tax for Business Owners
Corporation Tax and Income Tax are different taxes charged on different entities:
- Corporation Tax is paid by companies on their company profits.
- Income Tax is paid by individuals (including sole traders, partners, and employees) on their personal income.
Company directors who take a salary from their company will pay Income Tax and National Insurance on that salary. However, dividends received from the company may also be subject to Income Tax (though at different rates).
Use our UK Income Tax Calculator for personal income tax calculations.
Example Business Tax Calculations
Example 1: Small Profits Rate
Business: ABC Trading Ltd
Taxable Profit: £40,000
Tax Rate: Small Profits Rate (19%)
Corporation Tax: £40,000 × 19% = £7,600
Profit After Tax: £40,000 − £7,600 = £32,400
Example 2: Marginal Relief
Business: XYZ Solutions Ltd
Taxable Profit: £120,000
Tax Rate: Marginal Relief Applied
Corporation Tax: Approximately £21,000
Profit After Tax: £120,000 − £21,000 = £99,000
Effective Rate: Approximately 17.5%
Example 3: Main Rate
Business: Global Industries Ltd
Taxable Profit: £300,000
Tax Rate: Main Rate (25%)
Corporation Tax: £300,000 × 25% = £75,000
Profit After Tax: £300,000 − £75,000 = £225,000
These examples illustrate how Corporation Tax varies based on the level of taxable profits. Use this calculator to estimate your own business tax liability.
Who Pays Corporation Tax?
Corporation Tax is paid by:
- UK limited companies — all profits from UK and non-UK sources (depending on residency)
- Foreign companies with a UK branch or office
- Members' clubs and associations
- Co-operatives and other incorporated organisations
- Certain charities on trading income (though charities have special reliefs)
Sole traders, partnerships, and LLPs (Limited Liability Partnerships) are generally subject to Income Tax rather than Corporation Tax. If you're a sole trader, you may want to use our UK Self Assessment Tax Calculator.
For comprehensive information on who pays Corporation Tax, visit the GOV.UK Corporation Tax guidance.
When Does a Business Pay Corporation Tax?
Corporation Tax is typically due 9 months and 1 day after the end of your company's accounting period [citation:1]. For example, if your accounting period ends on 31 March, your Corporation Tax is due on 1 January the following year.
You must also:
- Notify HMRC if your company is liable for Corporation Tax
- File a Company Tax Return (CT600) within 12 months of the accounting period end
- Pay any Corporation Tax due by the payment deadline
Large companies may need to pay Corporation Tax in instalments. This calculator provides an estimate of your Corporation Tax liability, but you should confirm payment deadlines and obligations with HMRC.
For up-to-date information on payment deadlines, see the GOV.UK Corporation Tax deadlines page.
If you run a business and need to estimate employer taxes, our UK Employer Tax Calculator may also be useful.
Frequently Asked Questions
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