2026/27 rates
| Band | Rate |
|---|---|
| Dividend allowance | First £500 at 0% |
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
How dividends are stacked
Your salary and other income are taxed first. Dividends then fill the remaining band space. The £500 allowance is taxed at 0% but still uses up band.
Director example
Sam pays himself a £12,570 salary and takes £40,000 in dividends. After the allowance, £37,200 is taxed at 10.75% (£3,999) and £2,300 at 35.75% (£822.25), a total of £4,821.25.
Separate the company and the shareholder
Personal tax on a dividend is not the company's Corporation Tax. Keep the two liabilities distinct when assessing distributions so the same profit is not mistaken for spendable cash at both stages.
Try it with your own numbers
Calculate UK dividend tax for 2026/27 using the new rates of 10.
Frequently asked questions
Do I need to report dividends?
If they exceed £10,000 you must file a Self Assessment return. Between £500 and £10,000 you can ask HMRC to adjust your tax code instead.
Check it on GOV.UK: Tax on dividends (opens GOV.UK in a new tab)
Sources
Tax year 2026/27. Check these official sources for current rules and deadlines.
Related calculators
- Dividend Tax Calculator — Calculate UK dividend tax for 2026/27 using the new rates of 10.
Related guides
- Capital Gains Tax Explained — How Capital Gains Tax works in 2026/27, the £3,000 allowance, 18% and 24% rates, and when you need to report.
- IR35 Explained — What IR35 is, who decides your status, how inside-IR35 contracts are taxed and what it means for your take-home pay.
- UK Tax-Free Allowances — A summary of UK tax-free allowances for 2026/27: Personal Allowance, savings, dividends, CGT, trading, property, ISAs and pensions.