Corporation Tax
What is Corporation Tax?
Corporation tax is payable on the profits of limited companies and certain other organisations, such as co-operatives, clubs and associations.
Corporation tax is chargeable on:
- trading profits (income from business activities),
- capital gains (profits from selling assets such as property or shares), and
- investment income (interest earned on investments and savings).
What are the Rates of Corporation Tax?
What are the Rates of Corporation Tax?
For the financial year beginning 1 April 2026:
Small Profits Rate – 19%
Companies with taxable profits of £50,000 or less may qualify for the Small Profits Rate of 19%.
Main Rate – 25%
Companies with taxable profits above £250,000 normally pay Corporation Tax at the main rate of 25%.
Marginal Relief
Where taxable profits are between £50,000 and £250,000, Corporation Tax is calculated at the 25% main rate, with Marginal Relief reducing the amount payable. This results in a gradual increase in the effective rate of Corporation Tax between 19% and 25%.
The £50,000 and £250,000 thresholds are reduced where a company has associated companies and may also need to be adjusted for accounting periods shorter than 12 months.
What is a CT600?
A CT600 is the Company Tax Return submitted to HMRC to report a company’s taxable profits and Corporation Tax liability.
It includes details of income, allowable expenses, tax adjustments, capital allowances and relevant tax reliefs. A Company Tax Return is normally required for each accounting period where HMRC has issued a notice to deliver one, including where no Corporation Tax is ultimately payable.
The return is submitted together with the company’s accounts and tax computations.