2025/26 rates: £500 dividend allowance • Basic 8.75% • Higher 33.75% • Additional 39.35%
Tip: If you run a limited company, drawing income as a combination of salary (up to the personal allowance) and dividends is typically the most tax-efficient approach. Use our
Sole Trader vs Ltd comparison tool to see the full picture.
Dividend tax is paid via Self Assessment, not at source. You must register for Self Assessment if your dividend income exceeds £10,000. Rates are for 2025/26.