Dividend Tax · 2025/26
Dividend Tax on £10,000 (2025/26) — UK Dividend Allowance Guide
On £10,000 of dividend income in the 2025/26 tax year (with £30,000 of other income for realistic band capacity), UK dividend tax was £831.25 — an effective rate of 8.31%, or about £69.27 per month equivalent. The 2025/26 dividend allowance was £500, with rates of 8.75% / 33.75% / 39.35%.
Dividend Tax (2025/26)
£831.25
per year (£69.27/month)
Effective rate
8.31%
vs gross dividends
Band-by-band breakdown (2025/26)
Dividend allowance (£500)£500.00
Taxable dividends£9,500.00
Basic rate (8.75%) on £9,500.00£831.25
Total dividend tax£831.25
Marginal rate8.75%
What was different about 2025/26
2025/26 holds the £500 dividend allowance and 8.75% / 33.75% / 39.35% rate stack steady for a second consecutive year. Combined with frozen Income Tax thresholds (PA £12,570, higher rate at £50,270, additional at £125,140), even modest dividend income now produces a measurable tax bill — making ISA usage and director remuneration mix more important than ever.
Same £10,000 of dividends across years
On £10,000 of dividends you would have paid £787.50 in 2023/24 (allowance £1,000) and £831.25 in 2024/25 (allowance £500), compared with £831.25 in 2025/26 (allowance £500). The shrinking dividend allowance is the dominant driver of change between these years — rates themselves have been steady at 8.75% / 33.75% / 39.35%.
Other dividend amounts in 2025/26
FAQs
How much dividend tax did I pay on £10,000 in 2025/26?
On £10,000 of dividends in 2025/26 (assuming £30,000 of other income, which uses your Personal Allowance plus part of the basic-rate band), the dividend tax bill was £831.25 — an effective rate of 8.31% on the gross dividends. That works out to about £69.27 per month equivalent.
What was the dividend allowance in 2025/26?
The dividend allowance for 2025/26 was £500. This is a tax-free slice that applies regardless of which Income Tax band you sit in. It was £2,000 up to 5 April 2023, then halved to £1,000 for 2023/24, then halved again to £500 from 6 April 2024 (continuing into 2025/26).
What were the dividend tax rates in 2025/26?
For 2025/26 the UK dividend tax rates were 8.75% (basic), 33.75% (higher) and 39.35% (additional). These rates have been stable since the April 2022 increase that accompanied the (later abolished) Health & Social Care Levy.
What is the marginal dividend rate at £10,000 in 2025/26?
Your marginal dividend tax rate on £10,000 in 2025/26 was the basic rate (8.75%) — the rate applied to the next £1 of dividend income. Because dividends stack on top of other income, adding salary or pension would push more of your dividends into a higher band.
Why does the calculation assume £30,000 of other income?
We assume £30,000 of other (non-dividend) income to model a realistic owner-manager or part-time-PAYE scenario. That £30,000 uses your £12,570 Personal Allowance plus £17,430 of the £37,700 basic-rate band — leaving £20,270 of basic-band capacity for dividends before they tip into the higher-rate band. This produces meaningful tax figures across all five matrix amounts (£5k through £100k).
How does £10,000 in 2025/26 compare to other tax years?
On £10,000 of dividends you would have paid £787.50 in 2023/24 (£1,000 allowance), £831.25 in 2024/25 (£500 allowance), compared with £831.25 in 2025/26 (£500 allowance). The shrinking allowance is the main driver of year-on-year change.
Are dividends still cheaper than salary in 2025/26?
Yes — dividends carry no National Insurance and have lower headline rates than salary (8.75% vs 20% in the basic band). That is why owner-managers commonly take a small salary up to the personal allowance and the rest as dividends. However, corporation tax has already been paid on profits before they are distributed, so the combined effective rate is closer to salary than the headline suggests.
Can I still reclaim overpaid dividend tax from 2025/26?
HMRC allows overpayment relief claims up to 4 years after the end of the relevant tax year — so for 2025/26 you typically have until 5 April 2030. File via your HMRC personal tax account or by written claim, with dividend vouchers as evidence.
Is dividend income reported on Self Assessment in 2025/26?
If your dividends exceed the £500 allowance for 2025/26, you generally need to report them via Self Assessment (or, for some smaller amounts, by writing to HMRC to update your tax code). Within an ISA, dividends are tax-free and not reportable.
Where can I see the official 2025/26 HMRC dividend tax rules?
HMRC publishes dividend tax rules at gov.uk/tax-on-dividends. Our figures use the 2025/26 entry in our internal rates table, which mirrors HMRC's published dividend allowance and rate structure for that year.
Related
Disclaimer: Figures assume £30,000 of other (non-dividend) income to model a realistic basic-rate band capacity scenario, plus the published 2025/26 HMRC dividend allowance (£500) and rates. Your actual liability depends on your total income, pension contributions and other reliefs. Always verify via HMRC personal tax account.