Corporation Tax Rates
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What your company needs to know
Corporation tax rates determine how much tax UK companies pay on their taxable profits. The main rate can differ depending on your level of profit and on whether you qualify for marginal relief or the small profits rate. This guide sets out the current UK corporation tax rates, who they apply to and how they work, so that your business can plan ahead and stay compliant with HMRC.
What Are Corporation Tax Rates?
Corporation tax rates decide how much tax UK companies pay on their taxable profits. Everyday business expenses and capital allowances reduce the amount of profit that gets taxed, whereas corporation tax rates set the percentage of tax charged on the profit that remains. The UK applies different rates according to profit level. Many companies pay the main rate on all of their taxable profits, while smaller companies with lower profits may qualify for a reduced small profits rate or for marginal relief. Knowing which rate applies to your business, and how to calculate it properly, helps you plan ahead, stay compliant and make full use of any reliefs that can reduce your final tax bill.
How to Work Out and Pay Corporation Tax Rates
Paying these taxes involves working out your company’s taxable profits, applying the correct rates and paying HMRC by the deadline. Here is how it works:
Limited Companies
If you run a limited company, you calculate your tax when completing your Company Tax Return (CT600). You work out your taxable profits, check which rate applies (the main rate, the small profits rate or marginal relief) and show how you arrived at the final amount due.
Foreign Companies with a UK Branch
If you run a foreign company with a UK branch or office, you also need to calculate UK taxable profits separately and apply the right corporation tax rate when completing your return.
Getting Started with Corporation Tax Rates
Before calculating Corporation Tax, identify whether your business qualifies for the main rate, small profits rate or marginal relief based on its taxable profits. Understanding the relevant rates, thresholds and available deductions helps you calculate your liability accurately and plan ahead. Rates apply by Financial Year, running from 1 April to 31 March. If your accounting period spans two Financial Years, profits are apportioned between them on a time basis.
Year to 31.3.27
Report and Pay Capital Gains Tax
Most UK companies, and some other organisations, must pay tax at the applicable rates on their taxable profits. This includes:
Limited Companies
All UK limited companies pay corporation tax on profits from trading, investments and chargeable gains. The rate depends on the company's level of profit and on whether it qualifies for the small profits rate or marginal relief.
Foreign Companies with a UK Branch
Overseas companies with a permanent establishment or branch in the UK must also pay UK corporation tax on the profits they earn here.
Clubs, Societies, and Associations
Unincorporated associations, such as sports clubs, community groups and some co-operatives, may be liable for corporation tax and must apply the correct rate when working out what they owe.
Foreign Companies with a UK Branch
Businesses in special categories, such as charities with non-charitable trading profits, may also have corporation tax liabilities.
Exclusions to Note
Sole traders and partnerships do not pay corporation tax. They pay Income Tax and National Insurance on their profits through Self Assessment instead.