10/03/2026
From 6 April 26, dividend tax rates in the UK are increasing. For many company directors and investors who rely on dividends as part of their income, this change could mean a higher personal tax bill.
Here’s what’s changing:
• Basic rate: rising from 8.75% → 10.75%
• Higher rate: rising from 33.75% → 35.75%
• Additional rate: remains 39.35%
• Dividend allowance stays at £500 tax-free each year.
In practical terms, this means an extra £20 of tax for every £1,000 of dividends above the allowance for basic and higher-rate taxpayers.
For business owners who take profits via dividends, now is a good time to review your profit extraction strategy, timing of dividends, and tax planning for the new tax year.
If you’re unsure how the changes will affect you, speaking to a tax adviser before the new tax year begins could save you money.