Corporation Tax

When your year straddles 1 April

The Corporation Tax financial year turns over on 1 April. If your accounting period spans it, HMRC splits the profit across two financial years — and the marginal-relief limits split with it. Here's the exact working.

A worked example, from the real engine

A 12-month period from 1 October 2024 to 30 September 2025, with £100,000 of taxable profit, straddles 1 April 2025 — so it's split across financial years 2024 and 2025:

Financial year	Days	Profit	Rate	Tax
FY2024	182	£49,863.01	25% − MR	£11,343.83
FY2025	183	£50,136.99	25% − MR	£11,406.17
Total Corporation Tax				£22,750.00

The profit is apportioned by days into each financial year, and the marginal-relief limits are apportioned the same way — so each slice is computed on its own share of the £50,000 and £250,000 thresholds.

Why the split matters

The financial year runs 1 April to 31 March. Most companies don't have a 31 March year-end, so most accounting periods cross a financial-year boundary. Usually the rates on both sides match and the only effect is how the marginal-relief limits are divided — but when rates change on 1 April, the split decides real money.

1 April 2023 is the cautionary tale

On that date the flat 19% rate became a 19%–25% band with marginal relief. A company whose year straddled it paid 19% on the days before and the new banded rate on the days after — a split every hand calculation of that year had to get right, and many didn't.

How WrenTax handles it

WrenTax's engine slices every period at each 1 April automatically, applies each financial year's own rates and apportioned limits, and sums the parts — the same computation whether you're checking a number on the calculator or filing the CT600. The full corporation tax calculator lets you run your own period and profit through it.

Common questions

What happens if my accounting period crosses 1 April?

The UK Corporation Tax financial year runs from 1 April to 31 March. If your accounting period spans 1 April, it falls into two financial years, and each part is taxed under that year's rules. Profits are apportioned across the two by the number of days in each.

Does straddling 1 April change my tax?

When the rates or thresholds differ between the two financial years — as they did dramatically on 1 April 2023, when the flat 19% rate became 19%–25% with marginal relief — each slice is taxed under its own year's rules. Even when the rates match, the £50,000 and £250,000 marginal-relief limits are apportioned across the two years by days.

Why do calculators get this wrong?

It's easy to get wrong by hand, and many free calculators assume a single financial year and don't model it. The apportionment has to be done on a daily basis and the marginal-relief calculation run separately for each part.

General information about UK Corporation Tax financial years, not tax advice. The worked example assumes a straightforward trading company with no reliefs or associated companies.