Answers · UK 2025/26
How much tax do I pay on £10,000 of dividends in 2026/27?
On £10,000 of dividends for 2026/27, the first £500 is tax-free under the dividend allowance, leaving £9,500 taxable. A basic-rate taxpayer pays 10.75% (£1,021), a higher-rate taxpayer 35.75% (£3,396), and an additional-rate taxpayer 39.35% (£3,738).
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Dividends for 2026/27 have a £500 tax-free dividend allowance, so on £10,000 of dividends only £9,500 is taxable. Dividends are taxed after your other income, so the rate depends on which tax bands the dividends fall into. The dividend rates for 2026/27 are 10.75% for basic-rate taxpayers, 35.75% for higher-rate taxpayers, and 39.35% for additional-rate taxpayers. If all £9,500 falls in the basic-rate band, the tax is £1,021. If you are a higher-rate taxpayer with the dividends sitting in the 40% band, the tax is 35.75% of £9,500, which is £3,396. For an additional-rate taxpayer the tax is 39.35% of £9,500, which is £3,738. Where dividends straddle two bands, the part in each band is taxed at the matching dividend rate. There is no National Insurance on dividends, which is why company directors often take a small salary plus dividends. You report dividend income through Self Assessment if it exceeds £10,000, or HMRC can adjust your tax code for smaller amounts. Dividends held inside a stocks and shares ISA are completely tax-free and do not use your dividend allowance. Use the Dividend Tax calculator to combine your salary and dividends and see the exact bill.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.