Key facts
- The main Corporation Tax rate was cut from 28% in 2010 to 19% in 2017 — one of the lowest rates in the G7.
- A single flat rate of 19% applied to all profits from April 2017 to March 2023.
- From April 2023, rates reverted to a two-tier system: 19% small profits rate and 25% main rate.
- Marginal relief applies to profits between £50,000 and £250,000 (from April 2023).
- Thresholds are divided by the number of associated companies.
Corporation Tax Rates: 2010–2026
The table below shows the main Corporation Tax rates for financial years (FY) running from 1 April to 31 March. Where a company’s accounting period straddles two financial years, the profits are apportioned and each portion is taxed at the rate for the relevant FY.[1]
| Financial Year | Period | Main Rate | Small Companies / Profits Rate | Lower Limit | Upper Limit | Marginal Fraction |
|---|---|---|---|---|---|---|
| FY2010 | 1 Apr 2010 – 31 Mar 2011 | 28% | 21% | £300,000 | £1,500,000 | 7/400 |
| FY2011 | 1 Apr 2011 – 31 Mar 2012 | 26% | 20% | £300,000 | £1,500,000 | 3/200 |
| FY2012 | 1 Apr 2012 – 31 Mar 2013 | 24% | 20% | £300,000 | £1,500,000 | 1/100 |
| FY2013 | 1 Apr 2013 – 31 Mar 2014 | 23% | 20% | £300,000 | £1,500,000 | 3/400 |
| FY2014 | 1 Apr 2014 – 31 Mar 2015 | 21% | 20% | £300,000 | £1,500,000 | 1/400 |
| FY2015 | 1 Apr 2015 – 31 Mar 2016 | 20% | N/A (unified rate) | N/A | N/A | N/A |
| FY2016 | 1 Apr 2016 – 31 Mar 2017 | 20% | N/A | N/A | N/A | N/A |
| FY2017 | 1 Apr 2017 – 31 Mar 2018 | 19% | N/A | N/A | N/A | N/A |
| FY2018 | 1 Apr 2018 – 31 Mar 2019 | 19% | N/A | N/A | N/A | N/A |
| FY2019 | 1 Apr 2019 – 31 Mar 2020 | 19% | N/A | N/A | N/A | N/A |
| FY2020 | 1 Apr 2020 – 31 Mar 2021 | 19% | N/A | N/A | N/A | N/A |
| FY2021 | 1 Apr 2021 – 31 Mar 2022 | 19% | N/A | N/A | N/A | N/A |
| FY2022 | 1 Apr 2022 – 31 Mar 2023 | 19% | N/A | N/A | N/A | N/A |
| FY2023 | 1 Apr 2023 – 31 Mar 2024 | 25% | 19% | £50,000 | £250,000 | 3/200 |
| FY2024 | 1 Apr 2024 – 31 Mar 2025 | 25% | 19% | £50,000 | £250,000 | 3/200 |
| FY2025 | 1 Apr 2025 – 31 Mar 2026 | 25% | 19% | £50,000 | £250,000 | 3/200 |
Key Changes Over the Period
Several significant shifts have taken place since 2010:[1][2]
2010–2014: Gradual Reduction
The main rate was reduced from 28% to 21% over four years. The small companies’ rate also fell, from 21% to 20%. The two rates converged at 20% in FY2014.
2015–2022: Single Flat Rate
From FY2015, the small companies’ rate was abolished and a single unified rate applied to all companies. The rate was cut to 19% from FY2017 and remained there for six years — making the UK one of the most competitive corporate tax jurisdictions in the developed world.
2023 Onwards: Two-Tier System Returns
From FY2023, the main rate increased to 25% for companies with profits over £250,000. A new small profits rate of 19% was introduced for profits up to £50,000, with marginal relief for profits between £50,000 and £250,000.
Marginal relief ensures there is no cliff-edge at £250,000. The effective rate tapers smoothly from 19% to 25% across the marginal band. The fraction of 3/200 is used in the calculation. See Marginal Relief for the formula and worked examples.[2]
Impact of Associated Companies
The £50,000 and £250,000 thresholds are divided by the number of associated companies. This means a company with (say) four associated companies has effective thresholds of £12,500 and £62,500.[3]
Before FY2023, the old small companies’ rate thresholds (£300,000 / £1,500,000) were also divided by associated companies.
Straddling Financial Years
If a company’s accounting period straddles 1 April (the date the financial year changes), its profits are time-apportioned between the two financial years, and each portion is taxed at the applicable rate.[1] Corporation Tax software handles this apportionment automatically when you prepare the CT600.
For example, a company with a 31 December year end for the period ending 31 December 2023 would have:
- 3 months (1 Jan – 31 Mar 2023) in FY2022 at 19% flat rate
- 9 months (1 Apr – 31 Dec 2023) in FY2023 at 25% / 19% two-tier rates
Frequently Asked Questions
What was the Corporation Tax rate before April 2023?
A single flat rate of 19% applied to all company profits from April 2017 to March 2023, regardless of profit level. There was no small profits rate or marginal relief during this period.
When did Corporation Tax increase to 25%?
The main rate increased to 25% from 1 April 2023. At the same time, a 19% small profits rate was reintroduced for companies with profits up to £50,000, with marginal relief for profits between £50,000 and £250,000.
What happens if my accounting period straddles 1 April?
If an accounting period straddles 1 April, profits are time-apportioned between the two financial years and each portion is taxed at the rate applicable to that financial year.
What was the lowest UK Corporation Tax rate?
The lowest main rate was 19%, which applied from April 2017 to March 2023. This made the UK one of the most competitive corporate tax jurisdictions in the G7 during that period.
Further Reading
- Corporation Tax Rates — current rates and thresholds in detail
- Marginal Relief — the formula and worked examples
- Associated Companies — how associated companies divide the thresholds
- Key Corporation Tax Dates — important deadlines for every accounting period
- Corporation Tax Glossary — definitions of key terms
Looking for simple Corporation Tax software?
#GoFile is HMRC-recognised and trusted by 50,000+ UK businesses. Set up in minutes, file with confidence.
Get Started For FreeNo credit card required · Cancel anytime
Sources
- Corporation Tax rates — GOV.UK
- Corporation Tax rates and reliefs — GOV.UK
- Associated companies — GOV.UK