A worked example
The company's accounting year runs from 1 April 2027 to 31 March 2028, its taxable profit is £400,000 and it has no associated companies.
| Year to 31 March 2028 | Before the Budget | After the Budget | Difference |
|---|---|---|---|
| Taxable profit | £400,000.00 | £400,000.00 | |
| Rate: profit is above the £250,000 upper limit, so 25% on all of it, with no marginal relief | 25% | 25% | |
| Corporation tax | £100,000.00 | £100,000.00 | £0.00 |
The rates and limits are unchanged, so a company with profit between £50,000 and £250,000 still pays the 19% small profits rate with marginal relief, and one at £50,000 or less still pays 19%.
One change does reach the corporation tax bill of many companies: the main-rate writing-down allowance falls from 14% to 12% from 1 April 2027, so relief on assets in the main pool comes more slowly. The capital allowances page shows what that means for £190,000 of equipment.
When it takes effect
Nothing changes in the rates: 25% and 19%, with the same limits, apply for the financial years from 1 April 2027 and 1 April 2028. The writing-down allowance cut starts on 1 April 2027.
Who it doesn't affect
Every company apart from banks pays corporation tax at the same rates as before. Only banks see a rate change, through the Bank Corporation Tax Surcharge, which rises from 3% to 6% from 1 January 2027 to 31 March 2028.
Where this comes from
- Budget 2026 (HM Treasury), "Keeping the government's tax commitments": the commitments in the 2024 Corporate Tax Roadmap maintained
- Budget 2026: Overview of Tax Legislation and Rates (HMRC), sections 1.37 and 1.38: the bank surcharge, and the main rate kept at 25% and the small profits rate at 19% for the financial year from 1 April 2028
- Budget 2026 OOTLAR, Annex A, Corporation Tax rates: 25% and 19%, the £50,000 and £250,000 limits and the 3/200 fraction, for the financial years from April 2026, 2027 and 2028
- Budget 2026 (HM Treasury), "Making fair choices on revenue raising": the headline rate of corporation tax capped at 25%, and the writing-down allowance cut
- Budget 2026 (HM Treasury), Table 6.1 (policy decisions): no change to the main rate, the small profits rate or marginal relief; the Bank Corporation Tax Surcharge at 6% from 1 January 2027 to 31 March 2028
- Budget 2025: Overview of Tax Legislation and Rates (HMRC), section 1.30: corporation tax at 25% (main rate) and 19% (small profits rate) for the financial year beginning 1 April 2027
- Corporation Tax rates (GOV.UK): 25% on profits over £250,000, 19% at £50,000 or less, marginal relief between, and the limits divided by associated companies
Every figure on this page comes from the Budget documents published on GOV.UK on , and was checked by Alan Davidson FCA. Last updated . It is general information, not advice on your own position.