The Corporation Tax rate in the UK depends on the amount of profit a company makes. The current main rate of Corporation Tax is 25% for all companies with taxable profits above £250,000, and a small profits rate (SPR) of 19% for companies with profits of £50,000 or below. Companies with taxable profits between £50,000 and £250,000 will pay the main rate reduced by a marginal relief providing a gradual increase in the average Corporation Tax rate. The £50,000 and £250,000 profit thresholds are proportionately reduced for short accounting periods and by the total number of ‘associated companies’ your company has.

For periods up to 31 March 2023, there was a single rate of Corporation Tax applied to all companies, which was 19% . However, from 1 April 2023, the main rate of Corporation Tax for non-ring fence profits increased to 25% for profits above £250,000, and a small profits rate of 19% was introduced for companies with profits of £50,000 or less. Companies with profits between £50,000 and £250,000 will pay tax at the main rate, reduced by a marginal relief.

It is important to note that there is no Corporation Tax threshold, and all limited companies are required to pay Corporation Tax on their annual profits.