Marginal relief and associated companies
How it works for your company and any associated companies
Corporation Tax is 19% on profits up to £50,000 and 25% above £250,000. In between, marginal relief applies, and the effective rate on the middle slice is higher than most people expect.
How marginal relief works
Profits between the thresholds pay 25% reduced by marginal relief, which works out at an effective 26.5% on each pound between £50,000 and £250,000. This makes planning, such as pension contributions or timing expenditure, most valuable when profits sit in that band.
Associated companies
The thresholds are divided by the number of companies under common control. Where there are two associated companies, the bands become £25,000 and £125,000 each. Tell us about any other company you own or control, as it directly changes your rate.
💡 Good to know: A company with £75,000 of profit does not get to pay tax at 19% on any of this: the whole calculation shifts once you cross £50,000. Ask us for a projection before your year-end.
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