Answers · UK 2025/26

How much tax will I pay on £35,000 of dividends in 2026/27?

On £35,000 of dividends in 2026/27, the first £500 is covered by the dividend allowance. The remaining £34,500 is taxed at 10.75% if you are a basic-rate taxpayer (£3,708.75), 35.75% if higher-rate (£12,333.75), or 39.35% if additional-rate (£13,575.75).

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 £35,000 of dividends, £34,500 is taxable after the allowance. For a company director on a typical £9,100 salary, combined income of £44,100 stays within the basic-rate band, so the whole dividend amount is taxed at 10.75%, giving £3,708.75. If the same £35,000 of dividends sits on top of a salary or other income already at or above the £50,270 higher-rate threshold, the entire amount is taxed at 35.75% instead, a bill of £12,333.75 -- more than three times as much for identical dividend income. This gap is why the timing and size of salary matters so much for company directors deciding how to extract profit from a limited company. Use the dividend-tax calculator to model your exact band split.