Limited co tax v s/employed

First let's look at "small" companies, defined as those with profits of less than £300k.

Companies whose profit is above £50k pay tax at 19%. That's 19% of *all* profit, i.e. if profit is exactly £50k, the Corporation Tax is £9500.

Companies whose profit is below £10k pay no CT.

Where profit is between £10k and £50k, marginal relief comes into force to provide a sliding scale reduction from 19% at £50k down to

0% at £10k. The way it's presented is that the relief is 19/400 of that amount by which profit is less than £50k. The relief reduces the tax payable from 19% of actual profit to what is actually due:

As an example, if profit is £40k, unrelieved CT would be 19% of £40k, i.e. £7600, and this is reduced by marginal relief, calculated as

19/400 of £10k (because £40k is £10k less than £50k), which is £475, to the final CT bill of £7125.

Nobody actually calculates it by that daft method. Instead they disregard the first £10k of profit and calculate tax at 23.75% on the rest. Notice how £7125 is 23.75% of £30k.