UK dividend tax rose in April 2026 to 10.75% and 35.75%. See the rates, the £500 allowance, how dividends stack on salary and how much more you now pay.
On 6 April 2026, UK dividend tax went up for basic and higher-rate taxpayers. If you get dividends from a limited company you own, or from shares held outside an ISA, you will pay more tax on the same income this year. This guide sets out the 2026/27 rates against previous years, explains how dividends are taxed on top of your other income, and shows exactly how much more you pay with worked examples for common salary and dividend mixes. Every rate comes from GOV.UK.
Work out your own figure with the free Dividend Tax Calculator.
Sources: GOV.UK – Tax on dividends and GOV.UK – Income Tax rates and allowances: current and past.
Dividends are not taxed on their own. They are added on top of your other income (salary, pension, self-employed profit, rental income), and then:
The bands are the usual UK ones: taxable income up to £37,700 is basic rate (total income of £50,270 with a standard Personal Allowance), up to £125,140 is higher rate, and above that is additional rate. The Personal Allowance falls by £1 for every £2 of income over £100,000. Source: GOV.UK – Income Tax rates.
Scotland: GOV.UK confirms that Scottish taxpayers "pay the same tax as the rest of the UK on dividends and savings interest". Scottish rates apply only to your wages, pension and other non-savings income. Source: GOV.UK – Scottish Income Tax.
You get £3,000 in dividends and earn £29,570 in wages in 2026/27. Total income is £32,570. After the £12,570 Personal Allowance, taxable income is £20,000, all within the basic rate band. You pay:
Under 2025/26 rates the dividend tax would have been 8.75% × £2,500 = £218.75, so the rise costs this person £50.
Dividend tax only (not tax on the salary), calculated with the Dividend Tax Calculator:
The pattern is simple: every £1 of taxable dividends above the allowance in the basic or higher band costs 2p more than last year.
Raj runs his own limited company. He pays himself a salary of £12,570 and takes £40,000 in dividends in 2026/27.
There is no National Insurance on dividends. That is still a key reason directors take a mix of salary and dividends, but the gap with salary is now smaller. The company pays Corporation Tax on its profits before any dividend is paid. If you are deciding between being a sole trader and running a company, compare with the Self-Employed Tax Calculator and read How much tax do I pay if I'm self-employed?.
Fiona lives in Edinburgh, earns a £30,000 salary and receives £5,000 of dividends from shares outside an ISA. Her salary is taxed at Scottish rates. Her dividends are taxed at UK dividend rates.
That is the same dividend tax as someone in England on the same income, because Scotland's own bands don't apply to dividends. The Scottish rates only change the tax on her salary. The calculator has a Scotland option that handles this split.
GOV.UK says that if your dividends are more than both your unused Personal Allowance and the £500 dividend allowance, you need to report them to HMRC. How you report them depends on how much you received. If you already file a Self Assessment return, include them there. Source: GOV.UK – Tax on dividends. If you are in Self Assessment, also note the deadlines and late penalties.
10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate), on dividends above the £500 allowance.
Yes. The basic and higher rates each rose by 2 percentage points from 6 April 2026. The additional rate stayed at 39.35%.
£500, the same as in 2024/25 and 2025/26.
No. Scottish taxpayers pay the same dividend tax as the rest of the UK.
No. National Insurance is not charged on dividend income.
£4,821.25 in 2026/27: £37,200 at 10.75% plus £2,300 at 35.75%, after the £500 allowance.
Rates were checked on GOV.UK in October 2026. This is general information, not tax or investment advice. Speak to an accountant before changing how you pay yourself.
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