What is marginal relief and does it apply to me?
My company's profits are somewhere between £50,000 and £250,000 and I've heard this affects the tax rate I pay.
Asked by Anonymous on 31 August 2025
1 Answer
Marginal relief smooths the jump between the 19% small profits rate and the 25% main rate, so if your profits fall between £50,000 and £250,000 you pay an effective rate somewhere in between rather than the full 25% straight away. HMRC provides an online marginal relief calculator, and your accountant will apply it automatically when preparing your Corporation Tax computation. Note that these thresholds are shared between associated companies, so if you own more than one company the £50,000 and £250,000 bands are divided between them.