Marginal Relief Calculator
Corporation Tax 2025/26
Calculate your corporation tax marginal relief for profits between £50,000 and £250,000. Uses the official HMRC formula: Relief = (3/200) × (Upper Limit − Augmented Profits). Includes associated companies adjustment.
| Taxable profit | — |
| Upper limit (adjusted) | — |
| Lower limit (adjusted) | — |
| Tax at 25% Main Rate | — |
| Marginal relief: (3/200) × (UL − Profit) | — |
| Corporation tax due | — |
| Effective tax rate | — |
Marginal Relief Calculator — Free HMRC Tool for 2025/26
Our free marginal relief calculator is the only UK tool that applies the exact HMRC formula for 2025/26 — including the associated companies adjustment and short accounting period reduction. Use this marginal relief calculator if your company profits fall between £50,000 and £250,000 and you want to know your precise corporation tax liability. The marginal relief calculator shows you exactly how much relief you receive and what your effective tax rate is — in seconds, with no sign-up required.
What Is Corporation Tax Marginal Relief?
Marginal relief was reintroduced in April 2023 when the UK corporation tax Main Rate increased from 19% to 25%. Without it, a company earning £50,001 would immediately pay 25% on all profit — a sudden jump. Marginal relief prevents this by gradually increasing the effective rate from 19% to 25% as profits rise through the £50,000–£250,000 band.
The HMRC Marginal Relief Calculator Formula
The official HMRC marginal relief formula is:
Marginal Relief = (3/200) × (Upper Limit − Augmented Profits)
Where: Upper Limit = £250,000 (divided by associated companies + 1). Augmented Profits = taxable profits + dividends from non-group companies (usually equal to taxable profits).
Apply this relief against the 25% Main Rate calculation to get your actual corporation tax due. Our marginal relief calculator applies this formula automatically — including the associated companies adjustment.
📊 How to use this marginal relief calculator
This marginal relief calculator requires three inputs: your taxable profit (between £50,000 and £249,999), your accounting period in months (usually 12), and the number of associated companies. If your profit is outside the £50,000–£250,000 band, the marginal relief calculator will alert you — use our corporation tax calculator instead. The HMRC marginal relief calculator formula (3/200 × (Upper Limit − Profit)) is applied automatically.
Worked Example — Marginal Relief on £120,000 Profit
For a company with £120,000 taxable profit and no associated companies:
| Step | Calculation | Result |
|---|---|---|
| Step 1: Apply 25% Main Rate | £120,000 × 25% | £30,000 |
| Step 2: Calculate marginal relief | (3/200) × (£250,000 − £120,000) | £1,950 |
| Step 3: Deduct relief | £30,000 − £1,950 | £28,050 |
| Effective rate | £28,050 ÷ £120,000 | 23.375% |
How Associated Companies Affect the Marginal Relief Calculator
The £50,000 and £250,000 thresholds are divided equally by the number of associated companies plus one. For example, with two associated companies, there are three companies in total, so the thresholds become £16,667 and £83,333. A company generating £60,000 profit in a group of three would pay 25% (Main Rate) — not benefit from marginal relief — because its profit exceeds the adjusted upper limit.
Using the Marginal Relief Calculator for Short Accounting Periods
For accounting periods shorter than 12 months, both the lower (£50,000) and upper (£250,000) limits are reduced proportionally. For a six-month accounting period, the limits become £25,000 and £125,000 respectively. Enter your accounting period months in the marginal relief calculator above and the adjustment is applied automatically.
To see the full picture of your company's tax — including how the marginal relief calculator result feeds into your total position as a director — use our limited company tax calculator. For a complete corporation tax bill including marginal relief, try our corporation tax calculator.