Marginal Relief
From 1 April 2023, the Corporation Tax main rate increased to 25% applying to profits over the upper limit of £250,000.
A small profits rate of 19% has also been introduced for companies with profits below the lower limit of £50,000.
Where profits are between the upper and lower limits, tax is charged at the main rate reduced by marginal relief.
The small profits rate and marginal relief do not apply to certain types of company, including close investment holding companies and companies in liquidation.
The upper and lower limits will be proportionately reduced for short accounting periods and where there are associated companies.
Marginal relief is calculated as:
(Upper limit - Augmented profits) x (Total taxable profits/Augmented profits) x Standard fraction
Where:
Augmented profits = Total taxable profits + Non-group UK dividends received
Standard fraction = 3/200
The amount of marginal relief being claimed is entered in box 435 on the CT600 and the supporting computations are included in the attached iXBRL report in schedule A2 - Tax Calculation.