The two main rates
If your profits are £50,000 or less, you pay the small profits rate of 19%.
If your profits are £250,000 or more, you pay the main rate of 25%.
Most small companies fall comfortably within the 19% band.
What marginal relief is
Between £50,000 and £250,000 of profit, the rate does not jump straight to 25%. Instead, “marginal relief” increases your effective rate gradually from 19% towards 25% as profits rise.
In practice this means your effective rate sits somewhere between the two. The calculation is intricate to do by hand, but OneFiler performs it for you automatically.
Two things that change the thresholds
If your company has “associated companies” (broadly, other companies under common control), the £50,000 and £250,000 thresholds are divided between them, so they apply at lower profit levels.
If your accounting period is shorter than 12 months, the thresholds are reduced proportionately. OneFiler adjusts for both when calculating your tax.