{"id":101,"date":"2026-09-11T09:00:00","date_gmt":"2026-09-11T09:00:00","guid":{"rendered":"https:\/\/payslp.com\/blog\/?p=101"},"modified":"2026-07-04T17:48:44","modified_gmt":"2026-07-04T17:48:44","slug":"corporation-tax-marginal-relief-explained","status":"publish","type":"post","link":"https:\/\/payslp.com\/blog\/guides\/corporation-tax-marginal-relief-explained\/","title":{"rendered":"Corporation Tax Marginal Relief Explained"},"content":{"rendered":"

How Corporation Tax marginal relief tapers the rate between 19% and 25%, with a worked example.<\/p>\n

The two headline rates<\/h2>\n

Companies with profits up to \u00a350,000 pay the small profits rate of 19%. Companies with profits over \u00a3250,000 pay the main rate of 25%.<\/p>\n

The gap in between<\/h2>\n

Between \u00a350,000 and \u00a3250,000, marginal relief tapers the effective rate smoothly between 19% and 25%, rather than jumping straight from one rate to the other \u2014 preventing a company just over \u00a350,000 profit from suddenly facing a much higher overall tax bill.<\/p>\n

Why it matters for planning<\/h2>\n

Understanding where your company sits within this taper genuinely affects decisions like the timing of expenditure or dividend planning \u2014 worth calculating properly rather than assuming a flat rate applies.<\/p>\n

Work out your effective rate with the Payslp Corporation Tax calculator<\/a>.<\/p>\n

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Seeing the taper visually<\/h2>\n

\"Corporation<\/p>\n

The smooth curve between \u00a350,000 and \u00a3250,000 profit is deliberate \u2014 it prevents a company from facing a sudden jump in tax rate purely for crossing the small profits threshold by a small margin.<\/p>\n

Frequently asked questions<\/h2>\n

Does marginal relief require a separate claim?<\/strong>
\nNo \u2014 it’s calculated automatically as part of your Corporation Tax return, based on your actual profit for the period.<\/p>\n

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Related reading<\/h2>\n