If you’re running a limited company in the UK, understanding how Corporation Tax works in 2025 is essential to managing your cash flow and tax planning. With the government keeping the main rate of Corporation Tax at 25%, many small and medium-sized businesses are wondering what this means for their bottom line.
🔍 The Current Corporation Tax Structure (As of 2025)
Taxable Profits Corporation Tax Rate
£0 – £50,000 19% (Small Profits Rate)
£50,001 – £250,000 Marginal Relief applies
Over £250,000 25% (Main Rate)
🧮 What is Marginal Relief?
If your business earns between £50,001 and £250,000, you won’t pay the full 25% right away. Instead, marginal relief tapers the rate between 19% and 25%, effectively giving you a blended rate depending on your exact profit level.
👉 Example: A company with profits of £100,000 may pay an effective rate of around 22.75%, not the full 25%.
💡 Tax Planning Tips for 2025
● Split Profits: If you run multiple companies, check if you’re “associated” under HMRC rules, as this affects your threshold.
● Accelerate or Delay Costs: Move deductible expenses into this tax year to reduce taxable profits.
● Make Use of Capital Allowances: Maximise claims under the Full Expensing regime.
📌 Don’t Forget Deadlines
Corporation Tax is due 9 months and 1 day after your accounting year-end. File your return within 12 months or face penalties.
👉 Need personalised tax advice? Contact Bolton Accounting Consultants Ltd today for a consultation tailored to your business.