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ACCA Strategic Professional · Advanced Taxation (UK) · Tax administration and the UK tax system

For the financial year 2025, which of the following correctly states the corporation tax rates and limits that apply to a stand-alone company with no associated companies?

The small profits rate of 19% applies to profits up to £50,000 and the main rate of 25% applies above £250,000. Profits between the limits pay the main rate less marginal relief. The £1,500,000 figure relates to quarterly instalment payments, not to the rate limits.

  1. ASmall profits rate 19% up to £50,000; main rate 25% above £250,000; marginal relief between £50,000 and £250,000Correct
  2. BSmall profits rate 19% up to £250,000; main rate 25% above £250,000; no marginal relief
  3. CSmall profits rate 20% up to £50,000; main rate 25% above £250,000; marginal relief between the limits
  4. DSmall profits rate 19% up to £50,000; main rate 25% above £1,500,000; marginal relief between the limits

Explanation

For FY2025 the small profits rate is 19% with a lower limit of £50,000, and the main rate is 25% with an upper limit of £250,000. Marginal relief applies to augmented profits between those limits. The £1,500,000 figure is the profit threshold for quarterly instalments, not a rate limit.

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