Welcome to the Marginal Rate Relief Calculator for companies
Marginal starting rate relief and marginal small companies’ relief ease the transition between the rates of corporation tax.
Marginal starting rate relief was available from 1 April 2000 and ended on 31 March 2006. Most UK companies could claim marginal starting rate relief if their profits were at an annual rate of between £10,001 and £50,000.
Marginal small companies’ relief continues to apply. Most UK companies can claim marginal small companies’ relief if their profits are at an annual rate of between £300,001 and £1,500,000.
If a company has associated companies, the limits shown above are shared equally between all the associated companies. A company is associated with another company if they are under common control. In most cases, two companies are under common control if one owns the other, or the same people own them both or are able to direct the affairs of both of them.
The latest changes to small companies’ rate and the fraction for marginal small companies’ relief took effect from 1 April 2008. We have made software changes to the calculator to reflect those changes.
The calculator does not handle calculations for companies with ring fence profits. Ring fence means income and gains from extraction activities or oil rights in the UK and the UK Continental Shelf.
There are companies that are not eligible to claim marginal rate relief. Companies that are close investment-holding companies (as defined by Section 13A ICTA 1988) at the end of the accounting period cannot claim either relief, and investment trusts having eligible rental income (within the meaning of S508A ICTA 1988) cannot claim marginal starting rate relief.
If you need to check the rates of tax and limits for relief, see Rates and Allowances - Corporation Tax
To use the calculator, you need to enter details of your accounting period, profits and the number of associated companies (if any). If you need help on the meaning of a term when you are using the calculator, click on the Glossary link.
When you have entered all the necessary details, the calculator will show the amount of any marginal starting rate relief or marginal small companies’ relief that you can claim, or tell you that none is due.
If the company was liable to pay corporation tax at the starting rate or was eligible to claim marginal starting rate relief, and made distributions (such as dividends) after 31 March 2004 and before 1 April 2006 to anyone other than a company, you may need to calculate tax at the non-corporate distributions and underlying rates. The calculator does not calculate tax at these rates. There are examples to show you how to calculate tax at non-corporate distributions and underlying rates in How do I calculate the tax the company has to pay.
