From 1 April 2023 a new set of corporation tax (CT) rates came into effect. Companies with profits of up to £50,000 (the lower limit) will continue to pay CT at 19%, whilst those with profits exceeding £250,000 (the upper limit) will pay at 25%.
For companies with profits between these two amounts, the full 25% is charged, but the tax payable is then reduced by marginal relief. This leads to an effective overall tax rate which steadily climbs from 19% to 25% as profits increase.