Corporation Tax Act 2010 section 19

Marginal relief

Section 19 sets out the conditions under which a company qualifies for marginal relief, which provides a gradual transition between the small profits rate and the main rate of corporation tax.

• Marginal relief applies where a company meets the same first two conditions as for the small profits rate, plus two additional conditions relating to the level of its augmented profits.
• The company's augmented profits must fall between a lower limit and an upper limit, both of which are specified in section 24 of the Act.
• The company must have no ring fence profits (typically profits from oil extraction activities in the UK and UK continental shelf) in order for marginal relief to apply.
• Unlike the previous legislation, a company does not need to make a formal claim in order to receive marginal relief — it applies automatically where the conditions are met.