Dividend Tax Is Going Up — Here’s What That Really Means in Pounds & Pence (from 6 April 2026)
Even if your income stays exactly the same, and you are trying to keep in that basic rate of tax, you could still be paying hundreds more in tax.
Simple example (no change in income):
• Salary: £12,570
• Dividends: £37,700
• Personal Allowance used against salary
• Taxable dividends: £37,200 (after £500 allowance)
The difference 🆙
2025–26
• Dividend tax rate: 8.75%
• Tax due: £3,255
2026–27
• Dividend tax rate: 10.75%
• Tax due: £3,999
💸 That’s £744 more tax — without earning a penny extra.
If dividends form part of your income, now is the time to:
• Review extraction strategies
• Plan ahead for payments on account
• Understand cash impact
💬 How are you preparing for the dividend tax changes?
👉 Get in touch via www.catherinebennettaca.co.uk to book a chat.