What is the dividend allowance for 2025/26?

The 2025/26 dividend allowance is £500. The first £500 of dividends above your personal allowance is taxed at 0%. It does not reduce your other taxable income — it just applies a 0% rate to that £500, which still counts towards which band your remaining dividends fall in.

What are the UK dividend tax rates in 2025/26?

Dividends above the £500 allowance are taxed at 8.75% in the basic-rate band, 33.75% in the higher-rate band and 39.35% in the additional-rate band. The band depends on your total income: dividends stack on top of your salary, pension and other income.

Do I pay National Insurance on dividends?

No. National Insurance is not charged on dividend income — only the dividend tax above applies. That is one reason company directors often take a small salary plus dividends. Corporation tax has, however, already been paid by the company on the profits the dividends come from.

Does this change if I have a salary too?

Yes. A salary (or pension/rental income) fills your personal allowance and the basic-rate band first, so your dividends are pushed into higher bands and taxed at higher rates. Enter your salary in the 'other income' box above to see your real figure — for example, a £12,570 director's salary plus £8,000 of dividends gives a different result.

What is the Tax on £8,000 of Dividends (UK, 2025/26)?

If dividends are your only income, £8,000 of UK dividends in 2025/26 carries £0.00 of dividend tax — an effective 0.00%. The £12,570 personal allowance and the £500 dividend allowance come off first, then the 8.75%/33.75%/39.35% rates apply. Change the salary box for your own situation. It runs free in your browser on Gera Tools, with nothing uploaded.

Tax on £8,000 of Dividends (UK, 2025/26)

Name: Tax on £8,000 of Dividends (UK, 2025/26)
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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This page shows the real dividend tax on £8,000 of dividends for the 2025/26 UK tax year, assuming dividends are your only income. The calculator above is pre-filled with £8,000 — add a salary or pension in the second box to match your own situation.

£8,000 of dividends, no other income — 2025/26

	Amount
Dividend income	£8,000
Covered by £12,570 personal allowance	£8,000
Covered by £500 dividend allowance	£0
Taxable dividends	£0
Dividend tax	£0.00
Dividends after tax	£8,000.00

The effective tax rate on the full £8,000 is 0.00%.

Band breakdown

No dividends are left to tax above the personal allowance and the £500 dividend allowance.

How dividend tax is worked out

Your personal allowance (£12,570 in 2025/26) comes off your total income first. With no salary, it covers the first £12,570 of dividends tax-free.
The £500 dividend allowance taxes the next £500 of dividends at 0%.
Everything above that is taxable at the dividend rates — 8.75% in the basic band, 33.75% in the higher band, 39.35% in the additional band — depending on where the dividends sit once stacked on top of any other income.

If you also draw a salary or pension, that income uses up the personal allowance and the lower bands first, so the same £8,000 of dividends is taxed at a higher rate. Use the other income box to model that.

Assumptions

2025/26 tax year (6 April 2025 to 5 April 2026), England/Wales/Northern Ireland. Standard £12,570 personal allowance, no other allowances, reliefs, pension contributions or Gift Aid, and dividends are the only income unless you change the salary box. Dividend tax rates and the bands they are measured against are the same UK-wide, so this also applies in Scotland. National Insurance is not charged on dividends. This is a planning estimate; your Self Assessment is the authority.

Sources & as-of

Dividend allowance and rates: GOV.UK — Tax on dividends.
Personal allowance and income-tax bands: GOV.UK — Income Tax rates and Personal Allowances.
Personal allowance taper over £100,000: GOV.UK — Income over £100,000.
Tax year 2025/26. Page data as-of 2026-06-18. Rates can change at fiscal events — confirm current figures on GOV.UK.