Tax & Compliance
Marginal Relief Explained: How the 25% Corporation Tax Rate Really Works Between £50,000 and £250,000 Profit
Profits above £50,000 do not trigger an automatic 25% corporation tax rate. A mechanism called marginal relief smooths the transition up to £250,000, and this article breaks down the formula, a full worked example, and the accounting journal entry so you can check your own figures and avoid over-provisioning.
