Corporation Tax rates and allowances
Updated 4 April 2024
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Corporation Tax rates
The rate of Corporation Tax you pay depends on how much profit your company makes.
Rates for Corporation Tax years starting 1 April
There are different rates for ring fence companies.
| Rate | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|---|
| Small profits rate (companies with profits under £50,000) | 19 % | 19% | — | — | — | — | — | — |
| Main rate (companies with profits over £250,000) | 25% | 25% | — | — | — | — | — | — |
| Main rate (all profits except ring fence profits) | — | — | 19% | 19% | 19% | 19% | 19% | 19% |
| Marginal Relief lower limit | £50,000 | £50,000 | — | — | — | — | — | — |
| Marginal Relief upper limit | £250,000 | £250,000 | — | — | — | — | — | — |
| Standard fraction | 3/200 | 3/200 | — | — | — | — | — | — |
| Special rate for unit trusts and open-ended, investment companies | 20% | 20% | 20% | 20% | 20% | 20% | 20% | 20% |
From 1 April 2023, there is no longer a single Corporation Tax rate for non-ring fence profits.
At the Spring Budget 2021, the government announced that the Corporation Tax main rate for non-ring fence profits would increase to 25% for profits above £250,000.
A small profits rate of 19% was also announced 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. This provides a gradual increase in the effective Corporation Tax rate.
For profits from 1 April 2023, use the Marginal Relief calculator to work out how much Marginal Relief you can claim on your Corporation Tax.
Ring fence companies
There are different Corporation Tax rates for companies that make profits from oil extraction or oil rights in the UK or UK continental shelf. These are known as ‘ring fence’ companies.
For periods up to 31 March 2023, ring fence companies can claim Marginal Relief on profits between £300,000 and £1.5 million. From 1 April 2023, Marginal Relief is available for companies with profits between £50,000 and £250,000.
| Rate | 2023 to 2024 | 2015 to 2022 |
|---|---|---|
| Small ring fence profits rate (companies with profits under £50,000) |
19% | — |
| Main ring fence profits rate (companies with profits over £250,000) |
30% | — |
| Small ring fence profits rate (companies with profits under £300,000) |
— | 19% |
| Main rate ring fence (companies with profits over £1,500,000) |
— | 30% |
| Ring fence fraction | 11/400 | 11/400 |
Corporation Tax on chargeable gains
If you sell or dispose of a business asset, you’ll need to pay Corporation Tax on any profits (or ‘chargeable gains’).
When working out your chargeable gain, you can use Indexation Allowance rates to reflect the increase in value of the asset between the time it was acquired and 31 December 2017.
From 1 January 2018, Indexation Allowance is frozen.
If an asset is acquired before 1 January 2018, but disposed of on of after that date, the Indexation Allowance will be calculated using either the:
- Retail Prices Index
- factor for December 2017
This is regardless of the date when the asset is disposed of.