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Corporation Tax Explained: Rates, Computation and CT600 Filing
How Corporation Tax works for UK limited companies in 2025/26 — rates, marginal relief, what to deduct, and how to file your CT600.
Quick answers
What is the UK Corporation Tax rate?
For 2025/26 the UK Corporation Tax rate is 19% on taxable profits up to £50,000 and 25% on profits of £250,000 or more, with marginal relief tapering the effective rate between those thresholds. Companies with profits over £1.5m must pay in quarterly instalments.
When is Corporation Tax due?
Corporation Tax is due 9 months and 1 day after the end of your company's accounting period, which is usually before the CT600 return itself is filed. The CT600 return is due 12 months after the end of the period.
What is the AIA and how much is it?
The Annual Investment Allowance lets most businesses deduct 100% of qualifying plant and machinery purchases from taxable profits in the year of purchase, up to £1 million per year. It applies to companies, sole traders and partnerships.
Corporation Tax Explained
Corporation Tax is the tax UK limited companies pay on their taxable profits. It applies to trading profits, investment income and chargeable gains. Unincorporated businesses (sole traders, partnerships) don't pay Corporation Tax — they pay Income Tax via Self Assessment instead.
Rates for 2025/26
- Small profits rate: 19% for profits up to £50,000.
- Main rate: 25% for profits of £250,000 or more.
- Marginal relief applies between £50,000 and £250,000, giving an effective rate that rises smoothly from 19% to 25%.
The thresholds are reduced if you have associated companies (broadly, companies under common control) — divide the limits by the total number of associated companies plus one.
How to calculate taxable profits
Start with your accounting profit, then apply tax adjustments:
Accounting profit
+ add back: depreciation, entertaining, fines, non-allowable expenses
- capital allowances (AIA, full expensing, WDA)
- trading loss relief brought forward
- R&D relief (if eligible)
= Taxable profit
× Corporation Tax rate
= Tax due
The CT600 return
You must file a Company Tax Return (CT600) with HMRC for every accounting period. It includes:
- Profit and loss summary
- Tax computation
- iXBRL-tagged accounts and computations
- Any supplementary pages (R&D, loans to participators, etc.)
Filing is online only via HMRC's portal or compatible software.
Deadlines
- Pay Corporation Tax: 9 months and 1 day after the end of the accounting period.
- File CT600: 12 months after the end of the accounting period.
So for a year ending 31 March 2026: pay by 1 January 2027, file by 31 March 2027.
Companies with profits over £1.5 million pay in quarterly instalments.
Common reliefs and allowances
- Annual Investment Allowance (AIA): 100% deduction on plant and machinery up to £1 million.
- Full expensing: 100% first-year deduction for new qualifying plant and machinery (no cap, companies only).
- R&D tax relief: enhanced deduction or payable credit for qualifying R&D activity.
- Loss relief: carry losses back 1 year, sideways against other profits, or forward indefinitely.
Penalties
- £100 for filing CT600 1 day late, another £100 at 3 months.
- 10% of unpaid tax at 6 months, another 10% at 12 months.
- Daily interest on late-paid tax (currently around 7.75%).
This is general guidance for the 2025/26 UK tax year and is not personal tax advice. Always check the latest figures on GOV.UK or speak to a qualified accountant for your situation.
Frequently asked questions
Related guides
Example: Corporation Tax Calculation with Marginal Relief
A worked example of a UK Corporation Tax calculation for 2025/26 showing taxable profit, marginal relief and the final tax due.
Capital Allowances, AIA and Full Expensing
How UK businesses claim tax relief on plant, machinery and equipment in 2025/26 — Annual Investment Allowance, full expensing, FYAs and writing-down allowances.
Reference: UK Tax Rates 2025/26
All the headline UK tax rates and bands for 2025/26 in one place — Income Tax, NI, Corporation Tax, VAT, dividends, CGT.
The Complete UK Tax Guide for Small Businesses (2025/26)
Everything a UK small business or limited company needs to know about Corporation Tax, Self Assessment, VAT, PAYE, National Insurance and Making Tax Digital — in one place.
How to Pay Corporation Tax to HMRC (UK 2025/26)
A practical walkthrough of paying Corporation Tax to HMRC — the exact deadline, where to find your 17-character payment reference, every payment method (Faster Payments, CHAPS, BACS, Direct Debit, card, at bank) and what to do if you can't pay.