HMRC Corporation Tax Calculator (UK)
Estimate Corporation Tax using the current HMRC rate structure (small profits rate, main rate, and marginal relief).
How this HMRC corporation tax calculator works
This calculator is designed for UK limited companies that want a quick estimate of Corporation Tax before filing. It follows the current HMRC framework introduced from April 2023: a 19% small profits rate, a 25% main rate, and marginal relief between the lower and upper thresholds.
You enter your taxable total profits, any exempt distributions, associated companies, and period length. The tool then estimates whether your company falls into small profits, marginal relief, or main rate.
Current HMRC corporation tax bands (summary)
- 19% small profits rate (up to lower limit)
- 25% main rate (at or above upper limit)
- Marginal relief applies between those limits
The standard annual limits are usually £50,000 (lower) and £250,000 (upper), but they are reduced if:
- Your accounting period is shorter than 12 months, and/or
- You have associated companies.
What are “associated companies”?
Associated companies can reduce your available limits for small profits and marginal relief. In practical terms, HMRC divides the limits by the number of associated companies plus your own company.
Example: if you have 1 associated company, limits are divided by 2. If your accounting period is 12 months, your lower limit becomes £25,000 and upper limit £125,000.
Marginal relief in plain English
If your augmented profits are between the limits, tax is not a flat 19% or 25%. HMRC applies marginal relief, which smooths the transition between rates.
Formula used in this calculator
Corporation Tax = (Taxable Profits × 25%) − Marginal Relief
Marginal Relief = (Upper Limit − Augmented Profits) × (Taxable Profits / Augmented Profits) × (3/200)
Augmented profits are taxable profits plus exempt distributions.
Worked examples
1) Small profits rate example
Taxable profits £40,000, no associated companies, 12-month period: profits are below £50,000, so tax is estimated at 19% = £7,600.
2) Marginal relief example
Taxable profits £90,000, no associated companies, 12-month period: this falls between £50,000 and £250,000, so the calculator applies marginal relief and returns an effective rate between 19% and 25%.
3) Main rate example
Taxable profits £300,000, no associated companies, 12-month period: profits exceed the upper limit, so tax is estimated at 25%.
Important notes before filing with HMRC
- This is an estimate tool for planning, not a formal submission.
- Very complex cases (ring fence profits, relief claims, losses, group scenarios) need specialist advice.
- Long accounting periods are normally split for Corporation Tax purposes.
- Always confirm final figures with your accountant or tax adviser.
FAQ
Does this calculator submit my Corporation Tax return?
No. It only estimates your liability.
Can I use this for budgeting monthly tax provisions?
Yes, it is useful for forecasting and setting aside cash.
What if exempt distributions are zero?
Enter zero. In that case, augmented profits equal taxable profits.