Introduction
This free corporation tax calculator helps you work out how much tax your company owes on its profits. Enter your profit before tax and pick your tax year to get instant results. The tool covers tax years from 2022–23 through 2025–26 and handles all three rate bands: the small profits rate, the main rate, and marginal relief.
In Stage 1, you will see your total corporation tax, your effective tax rate, and your profit after tax. You can also compare two tax years side by side to see how rate changes affect your bill. The calculator checks if quarterly installment payments apply based on the £1,500,000 profit threshold.
In Stage 2, you can model the cost of financing your tax bill with a loan. It shows the total interest you would pay, the tax relief you can claim on that interest, and the true net cost of borrowing. A full step-by-step breakdown shows exactly how each number is calculated so you can follow the math yourself.
How to Use Our Corporation Tax Calculator
Enter your company's profit and tax year details below. The calculator will show your corporation tax owed, your effective tax rate, and the cost of financing your tax bill.
Profit Before Tax: Type in your company's total taxable profit before any corporation tax is taken off. This must be between $0 and $999,999,999.
Tax Year: Pick the tax year that applies to your company. The calculator uses this to find the correct tax rates and thresholds for that year.
Compare Tax Years: Turn this on if you want to see your tax bill side by side for two different tax years. When switched on, pick a second tax year from the dropdown that appears.
Corporation Tax Amount to Finance: This field auto-fills with your tax bill from Stage 1. Change it if you only want to finance part of your tax or a different amount.
Annual Interest Rate (%): Enter the yearly interest rate your lender charges. This must be between 0% and 50%.
Loan Term (Months): Enter how many months you plan to repay the loan. This must be between 1 and 60 months.
Press Calculate to see your results, or press Reset to clear all fields back to their starting values. Results also update as you type.
What Is Corporation Tax?
Corporation tax is a tax that companies pay on their profits. If your business makes money, the government takes a share of that profit. This is not the same as income tax, which people pay on their own earnings. Corporation tax is only for businesses like limited companies.
How Corporation Tax Rates Work
Not all companies pay the same rate. The rate you pay depends on how much profit your company makes. There are two main rates. The small profits rate is 19% and applies to companies with profits of £50,000 or less. The main rate is 25% and applies to companies with profits of £250,000 or more.
If your profit falls between £50,000 and £250,000, you are in the marginal relief band. In this band, you pay the 25% main rate, but you get a discount called marginal relief. This lowers your actual tax bill so you pay somewhere between 19% and 25%. The exact amount depends on your profit level. You can use our effective tax rate calculator to see your true rate after relief is applied.
When You Must Pay
Most companies must pay their corporation tax bill in one lump sum. This payment is due 9 months and 1 day after the end of your accounting period. However, if your profits are above £1,500,000, you must pay in four quarterly installments spread across the year instead of one single payment.
Financing Your Tax Bill
Some businesses choose to borrow money to pay their corporation tax. When you take out a business loan to pay tax, you pay interest on that loan. The good news is that loan interest is a business expense. This means it can reduce your taxable profit, which lowers your tax bill slightly. The calculator above helps you see exactly how much you could save this way. You can also use our loan payment calculator to estimate monthly repayments on any financing you arrange.
Why Your Effective Tax Rate Matters
Your effective tax rate is the true percentage of your profit that goes to tax. It is found by dividing your total tax bill by your total profit. This number is often more useful than the headline rate because it shows what you actually pay after any relief is applied. Understanding your effective rate also helps when planning dividend distributions, calculating your company's return on investment, or deciding whether to reinvest profits back into the business.