For the financial year beginning 1 April 2026, the small-profits rate is 19% and the main rate is 25%. Companies between the two profit limits calculate tax at the main rate and deduct marginal relief.
The current profit limits
The limits are not always available in full. They are proportionately reduced for short accounting periods and divided by the number of associated companies, including the company itself.
Why associated companies matter
Common control can bring companies into the associated-company rules even where they operate different trades. A group or owner-managed structure should therefore be reviewed before the tax rate is estimated or a dividend plan is finalised.
Useful review points
- Confirm the accounting period and whether it is shorter than 12 months.
- Identify associated companies for the relevant period.
- Check taxable total profits rather than relying only on accounting profit.
- Model marginal relief before dividends, bonuses or pension contributions are decided.
- Reconcile the final computation to the CT600 and accounts.
The 19% rate is not a universal small-company rate. The profit limits, period length and associated-company position must all be checked.
This article is general information, not UK tax, accounting or legal advice. Check the linked official guidance and obtain advice for the relevant facts.