Question 1

How much UK corporation tax will my company pay in 2026?

Accepted Answer

UK corporation tax in 2026 is 19% on profits up to GBP 50,000, 25% on profits over GBP 250,000, and a sliding marginal-relief band between (effective marginal rate of roughly 26.5%). Thresholds are divided by the number of associated companies and pro-rated for accounting periods shorter than 12 months.

Question 2

What is marginal relief for UK corporation tax?

Accepted Answer

Marginal relief reduces the corporation tax bill for companies with profits between the small-profits threshold (GBP 50,000) and the upper threshold (GBP 250,000), so the effective rate climbs smoothly from 19% to 25% rather than jumping. The standard fraction is 3/200, applied to the difference between the upper threshold and the company's augmented profits.

Question 3

How do associated companies affect corporation tax?

Accepted Answer

If your company controls or is controlled by another company (including overseas), the GBP 50,000 small-profits threshold and GBP 250,000 upper threshold are divided by the total number of associated companies (including yours). Two associated companies share thresholds of GBP 25,000 and GBP 125,000 each.

Question 4

Are dividends taxed at the corporation tax level?

Accepted Answer

No. Dividends are paid out of post-tax profit and are not deductible against corporation tax. The individual receiving the dividend pays personal dividend tax separately at their marginal rate after the dividend allowance.

UK Corporation Tax Calculator 2026

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