For this current 2025/26 tax year, Corporation Tax rates have not changed from the previous 2024/25 tax year. However, there are a few changes in other areas of business tax in the UK from last tax year. So Limited company owners very much still need to be informed and updated on the latest tax rules.

In the 2025/26 tax year, Corporation Tax continues to be a key consideration for company directors when planning profits, expenses, and take-home pay.

With that in mind, let's learn how the rates for 2025/26 apply to different profit levels, and what you can do to manage your Corporation Tax bill more efficiently.

What is Corporation Tax?

If you don't know, Corporation Tax is the tax your limited company pays on its profits. This includes trading profits, investment income, and any gains from selling assets like property or shares.

Unlike Income Tax, there’s no personal allowance - every penny of profit is taxable. You’ll need to calculate how much Corporation Tax you owe, report it to HMRC, and pay it by your company’s deadline (usually nine months and one day after the end of your accounting period).

Don’t worry, Crunch can help you handle it all.
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Corporation Tax rates for 2025/26

Note: If your company has associated companies, these thresholds may be divided between them.

How tapering works

If your company’s profits fall between £50,001 and £250,000, you won’t pay the full 25% rate on everything. Instead, marginal relief reduces the effective rate, so you pay somewhere between 19% and 25%.

The exact amount depends on your profits and the number of associated companies you have. It can get a bit fiddly, but Crunch’s accounting software and expert team make sure it’s all calculated correctly for you.
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Key thresholds and rules to know

Associated companies

If your company is connected to others under common control, the profit thresholds (£50k and £250k) are split between them. For example, two associated companies would each have a lower threshold of £25k and £125k.

Corporation Tax deadlines

You must pay your Corporation Tax nine months and one day after your accounting period ends. The deadline for filing your Company Tax Return is 12 months after your year-end.

Penalties

Late filing or payment can lead to HMRC penalties and interest charges, so it’s important to stay organised.

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How to reduce your Corporation Tax bill

There are several legitimate ways to lower your Corporation Tax:

• Claim all allowable business expenses – from office costs to insurance and travel

• Take a tax-efficient mix of salary and dividends

• Contribute to a pension – employer contributions are deductible

• Claim R&D tax credits if your company is eligible

• Invest in business assets that qualify for capital allowances

Crunch can help you identify the best opportunities to keep more of your hard-earned profits.

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What else has changed in business tax for 2025/26?

Alongside Corporation Tax rates, there are a few other updates worth knowing about for the 2025/26 tax year:

National Insurance

The threshold at which employers start paying employers NI has been reduced, which may impact how much directors take in salary and dividends.

The rate at which employers pay NI has been increased which increases the cost of employment to businesses

Annual Investment Allowance (AIA)

The £1 million limit remains in place, allowing businesses to deduct the full value of qualifying equipment or machinery.

Full expensing

Companies can continue to claim 100% first-year relief on qualifying capital purchases like IT and plant & machinery.

Dividend allowance cut

The tax-free dividend allowance has been maintained at £500, meaning more dividend income may now be taxable.

Keeping up with these changes can make a real difference to your tax bill, Crunch is here to help you make the most of them.
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Corporation Tax rates unchanged - but stay on the ball

The main takeaway is that Corporation Tax rates for 2025/26 remain the same from the previous tax year. 

But even so, company owners should still read up on the latest tax legislation to stay compliant, as tax-efficient as possible, and to keep HMRC off their backs.

In business, it always pays to plan ahead.

Need a hand with Corporation Tax? Crunch’s powerful software and expert accountants take the stress out of tax and help you stay on top of your finances. Get started with Crunch today

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