Answers · UK 2025/26

How much tax will I pay on £25,000 of dividends in 2026/27?

On £25,000 of dividends in 2026/27, the first £500 is covered by the dividend allowance. The remaining £24,500 is taxed at 10.75% if you are a basic-rate taxpayer (£2,633.75), 35.75% if higher-rate (£8,758.75), or 39.35% if additional-rate (£9,640.75).

Last updated: 10 July 2026Last reviewed: 10 July 2026How we verify

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Dividends in 2026/27 have a tax-free dividend allowance of £500. Above that, dividends are taxed at 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band, depending on which band the dividends fall into once stacked on top of your other income. On £25,000 of dividends, £24,500 is taxable after the allowance. A basic-rate taxpayer with enough headroom in the basic-rate band pays 10.75% of £24,500, which is £2,633.75. A higher-rate taxpayer, or someone whose dividends push them into the higher band, pays 35.75% of £24,500, which is £8,758.75 -- more than three times as much tax on the identical dividend income. An additional-rate taxpayer pays 39.35%, or £9,640.75. This is a common scenario for company directors who take a modest salary and a larger dividend, since £25,000 of dividends alongside a typical £9,100 salary keeps total income within the basic-rate band, whereas the same dividends on top of a six-figure salary from another source would be taxed entirely at the higher or additional rate. Use the dividend-tax calculator to model your exact position, and the dividend-vs-salary calculator to compare extraction methods.