UK 2028 Corporation Tax
UK 2028 Corp Tax: 19% to £50k, 25% above £250k. £50k-£250k tapered (effective 26.5% marginal). Associated companies divide thresholds.
| Profit | — |
| Lower threshold (÷ assoc) | — |
| Upper threshold (÷ assoc) | — |
| UK 2028 Corp Tax | — |
| Effective rate | — |
| Net profit | — |
UK 2028 Corporation Tax: 19% small profits rate to £50,000, 25% main rate above £250,000. Marginal relief on £50k-£250k profits creates effective 26.5% rate in the marginal band (a penalty of being in the gap). Associated companies divide the thresholds. Same as 2024-2026 unless Budget 2027 changes.
Marginal Band Penalty
Profits £50k-£250k effective rate 26.5% (worse than 25% main rate). Mathematically: 25% - (250k - profit) × 3/200. The system encourages businesses to stay just under £50k or push well above £250k. Mid-range = highest marginal cost.
Associated Companies Divide Thresholds
Two associated companies = thresholds halve: £25k lower, £125k upper, each. Five associates = thresholds /5. 'Associated' = common control or substantial commercial interdependence. Many small group structures hit higher rates earlier than expected.
Capital Allowances + R&D
Full Expensing 100% First-Year Allowance (made permanent April 2023) gives full deduction on plant + machinery. R&D scheme: merged regime from April 2024 — 20% above-the-line credit on qualifying R&D spend. Patent Box 10% rate on patent profits. Strategic structuring can drop effective rate significantly.
Last updated May 2026. Sources: HMRC Corp Tax.