The 19% small profits rate and marginal relief are not per company in the way many owners assume. If you control more than one company, the profit limits are shared between them. Here is who counts as associated, who is ignored, and what it does to the bill for 2026/27.
Written by James Whitfield · Last checked 19 October 2026 · Checked against 2026/27 HMRC rates · Editorial standards · Methodology
For 2026/27 the £50,000 lower limit and £250,000 upper limit are divided by one plus the number of associated companies. A company with one associate has limits of £25,000 and £125,000; with two associates, £16,667 and £83,333. They are also reduced for accounting periods shorter than 12 months.
Two companies are associated if one controls the other or both are controlled by the same person or persons at any time in the accounting period. A company that carries on no trade or business in the period, and a qualifying passive holding company, are ignored.
Enter the company's taxable profit for the accounting period. The calculator applies HMRC's 3/200 formula and adjusts the £50,000 and £250,000 limits for associated companies and short periods.
Your profit is inside the marginal relief band, so each extra £1 of profit costs 26.5p.
Assumes no dividends received from companies outside a 51% group (they raise "augmented profits" and reduce the relief). For the official check, use HMRC's own marginal relief calculator on GOV.UK.
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Under the Corporation Tax Act 2010, a company is associated with another at any time when one of them controls the other, or both are under the control of the same person or persons.1 Control has the close-company meaning: broadly, the power over more than half the shares, votes, income or assets on a winding up.
The test looks at the whole accounting period. If two companies are associated for any part of it, each counts the other for the whole period.1
The rights of a spouse, civil partner, relative or business partner can be attributed to you when deciding control, but only where there is substantial commercial interdependence between the companies: financial, economic or organisational links.2 Two unrelated businesses owned by a married couple are not automatically associated.
An associated company is ignored if it has not carried on a trade or business at any time in the accounting period, such as a genuinely dormant company.1
A passive holding company is also ignored. It must carry on no trade, have one or more 51% subsidiaries, hold no assets other than shares in those subsidiaries, have no income other than dividends from them that it passes on to its own shareholders, and have no chargeable gains, management expenses or charitable donations.3
Dan owns 100% of Alpha Ltd and 100% of Beta Ltd, both trading for the whole year to 31 March 2027. Each has one associated company, so each company's limits are £50,000 ÷ 2 = £25,000 and £250,000 ÷ 2 = £125,000.
| Alpha Ltd taxable profit | £60,000.00 |
| Alpha: 25% × £60,000 | £15,000.00 |
| Alpha: less 3/200 × (£125,000 − £60,000) | −£975.00 |
| Alpha corporation taxAs a standalone company it would be £12,150 | £14,025.00 |
| Beta Ltd taxable profit | £20,000.00 |
| Beta corporation tax at 19%Below its £25,000 lower limit | £3,800.00 |
| Extra tax for Alpha from the association | £1,875.00 |
The calculator at the top of this page uses the same formula: enter Alpha's £60,000 and one associated company to see £14,025.
For an accounting period of less than 12 months, the limits are reduced in proportion before they are divided by the number of associated companies.4 A company with no associates and a 6-month first period has limits of £25,000 and £125,000.
The same divisor applies to the quarterly instalment rules. For accounting periods beginning on or after 1 April 2023, the £1.5 million large-company threshold (and the £10 million threshold that decides whether a company is large in its first year) is divided by the number of associated companies.5 Otherwise corporation tax is due 9 months and 1 day after the end of the accounting period.
1. List every company you, your spouse or civil partner, relatives or business partners control, or that controls yours.
2. Remove any that did not trade or carry on a business at any point in the accounting period, and any passive holding company.
3. For relatives' and partners' companies, ask whether there is substantial financial, economic or organisational interdependence with yours. If not, their rights are not attributed to you.
4. Enter the number of associated companies in your Company Tax Return (CT600) and use the reduced limits.
They share the profit limits. The £50,000 lower limit and £250,000 upper limit are divided by one plus the number of associated companies, so with one associate each company has limits of £25,000 and £125,000 for 2026/27.
Only if there is substantial commercial interdependence between the companies. Without financial, economic or organisational links, your spouse's rights are not attributed to you and the companies are not associated through them.
No. A company that has not carried on a trade or business at any time in the accounting period is ignored.
A passive holding company is ignored if it carries on no trade, holds only shares in its 51% subsidiaries, and its only income is dividends from them that it passes on to its shareholders.
With two associated companies (three in total) the limits are about £16,667 and £83,333 each for a 12-month period.
The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.
The limited company tax calculator turns this guidance into a concrete estimate for corporation tax, dividends and personal take-home, based on 2026/27 HMRC rates.