Guidance

Corporation Tax: Marginal Relief

If your profits are between £300,000 and £1.5 million you can reduce your tax bill by claiming Marginal Relief.

Overview

Your company or organisation may be able to claim Marginal Relief and pay less Corporation Tax if its taxable profits before 1 April 2015 are between:

  • £300,000 (the lower limit)
  • £1.5 million (the upper limit)

However, if your company has associated companies, the Marginal Relief limits for all the associated companies must be reduced. You can read about how to calculate the reduced limits in the Company Taxation Manual.

For the purposes of CTA10, section 25 (4), formerly ICTA88, section 13(4), a company is an associated company of another at a given time, if at that time:

  • one of the companies has control of the other
  • both of the companies are under the control of the same person or persons

Control for this purpose is construed in accordance with the close company provisions in CTA10, Part 10 (sections 450 and 451), formerly ICTA88, section 416.

You can see how much relief you may able to claim by using an online tool to calculate Marginal Relief.

If your company has profits from ring fence activities (some UK Continental Shelf oil-related activities) you won’t be able to use the Marginal Relief calculator.

Companies that are close investment-holding companies at the end of a Corporation Tax accounting period can’t claim Marginal Relief.

How to claim Marginal Relief

To claim Marginal Relief, you’ll need to give details in your online Company Tax Return (your filing software should work it out for you), or amend your return if you’re within the time limits.

Published 1 January 2007
Last updated 2 February 2017 + show all updates
  1. The overview section has been updated to show the new rules 'before 1 April 2015'.
  2. First published.