Dividend tax rates 2026/27
From 6 April 2026 the rates on dividends above the £500 allowance are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate). Dividends inside an ISA are tax-free.
How it is worked out
Your dividends are added on top of your other income. Any unused Personal Allowance (£12,570) covers dividends first. The next £500 is the dividend allowance, taxed at 0%, but it still uses up part of your tax band. Dividends falling in the basic band (taxable income up to £37,700) pay 10.75%, the higher band (up to £125,140) pays 35.75%, and above that 39.35%.
Scotland: Scottish rates apply to salary only. Dividends are taxed at the UK dividend rates and bands, so this calculator uses UK bands for the dividend part.
Worked example (GOV.UK)
£29,570 wages and £3,000 dividends: taxable income £20,000, all in the basic band. No tax on £500 (dividend allowance), and 10.75% on £2,500 = £268.75.
Frequently asked questions
What is the dividend allowance for 2026/27?
£500. Dividends above that are taxed at 10.75%, 35.75% or 39.35% depending on your band.
Did dividend tax go up in April 2026?
Yes. From 6 April 2026 the basic rate is 10.75% and the higher rate 35.75%. The additional rate is 39.35%.
Do I pay National Insurance on dividends?
No. National Insurance is not charged on dividends, which is one reason company directors often take a mix of salary and dividends.
Do I need to tell HMRC about dividends?
Yes, if your dividends are more than both your unused Personal Allowance and the £500 dividend allowance. How you report them depends on how much you received; see GOV.UK.
Sources
Disclaimer: This calculator gives an estimate using official 2026/27 rates published on GOV.UK and devolved government sites (checked October 2026). It is not financial, tax or legal advice and may not cover every situation. Always check with the official source, HMRC, your lender or a qualified adviser before making decisions.