If you run a limited company and pay yourself partly through dividends, you'll want to take note of this one.
From 6 April 2026, the standard dividend tax rate is increasing from 8.75% to 10.75%, and the upper rate is rising from 33.75% to 35.75%. The additional rate remains unchanged at 39.35%.
It might not sound like a huge jump, but on a meaningful dividend income it can add up quickly. For example, if you're drawing £40,000 in dividends as a higher-rate taxpayer, you'll be paying an extra £800 a year compared to last tax year.
The good news is that the £500 dividend allowance — the amount you can receive free of dividend tax — remains in place.
Now is a good time to review your salary and dividend mix for 2026/27 to make sure your remuneration is still as tax-efficient as it can be. If you'd like us to take a look at your position, just get in touch with your Client Manager. That's exactly what we're here for.