Blended Tax Rate

Hi,

The Blended Tax Rate is the effective corporation tax rate applied to your company's profits when your accounting period spans two financial years with different tax rates.

For example, if your accounting period crosses 1 April 2023 — when the UK corporation tax rate changed from 19% to 25% — your profits are split proportionally between the two financial years. Each portion is taxed at the rate applicable to that year, and the Blended Tax Rate is the weighted average of both.

Example: If 6 months of your period fall in FY2022 (19%) and 6 months in FY2023 (25%), the blended rate would be approximately 22% — reflecting the time-weighted combination of both rates.

This ensures your tax liability is calculated fairly based on how long your accounting period falls within each tax year, in line with HMRC rules.