{"id":1377,"date":"2025-02-21T14:22:17","date_gmt":"2025-02-21T14:22:17","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/"},"modified":"2026-05-05T14:27:19","modified_gmt":"2026-05-05T14:27:19","slug":"dividend-tax-simplified-a-guide-for-small-business-owners","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","title":{"rendered":"Dividend tax rates: a small business owner&#8217;s guide"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">A dividend is money paid to shareholders out of a business\u2019s profits. And for tax efficiency, many business directors pay themselves through a combination of a salary and dividends.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But dividend tax rates add an extra layer of complexity for small business owners getting to grips with their tax responsibilities. But what are dividends and how does the UK\u2019s dividend tax work? And what can you do to work as tax efficiently as possible? Read on to find the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\"><a href=\"#h-what-is-dividend-tax\">What is dividend tax?<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-how-much-dividend-is-tax-free\">How much dividend is tax-free?<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#dividend-tax-rates\">What are the divide<\/a><a href=\"#h-what-are-the-dividend-tax-rates\">nd tax rates?<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#how-much-tax-do-i-pay-on-dividends\">How much tax do I pay on dividends in 2026-27?<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#dividend-tax-changes\">Dividend tax changes for the 2026-27 tax year<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-example-understanding-dividend-tax\">Example: understanding dividend tax<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-how-to-pay-dividends-tax\">How to pay dividends tax<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-paying-dividend-tax-correctly-mistakes-to-avoid\">Paying dividend tax correctly: mistakes to avoid<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-key-takeaways-dividend-tax\">Key takeaways: dividend tax<\/a><\/li>\n\n\n\n<li class=\"wp-block-list-item\"><a href=\"#h-faq-some-common-questions\">FAQ: some common questions<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-dividend-tax\">What is dividend tax?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Dividend tax is a tax on the money you receive from a company&#8217;s profits (dividends) if you own shares in that company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When a dividend is distributed in a business, it\u2019s in addition to the salary. To make sure that things are fair and there\u2019s no double taxation, dividends are taxed separately to your wage if you run a limited company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sole traders don\u2019t pay dividends tax because a business&#8217;s profits are considered the owner&#8217;s personal income.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When you\u2019re paid a dividend, your dividend allowance is tax-free. Anything you\u2019re paid over that <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/business-tax-guide\/\" data-type=\"knowledge\" data-id=\"25366\">amount is taxed<\/a>. This is to make sure dividends aren\u2019t used as a way to avoid other taxes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if you were paid a dividend of \u00a310,000, and the dividend allowance was \u00a38,000, \u00a32,000 would be subject to dividend tax.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-much-dividend-is-tax-free\">How much dividend is tax-free?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The amount of dividends that are tax-free is \u00a3500. Anything over \u00a3500 will be taxed at your income tax rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Your dividend income (after the \u00a3500 dividend allowance) is also a part of your total taxable income which could affect the income tax band you\u2019re in. Keep in mind that dividends don\u2019t count as a <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/limited-company-expenses\/\" data-type=\"knowledge\" data-id=\"1478\">business cost<\/a> when you\u2019re working out your <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/when-is-corporation-tax-due\/\" data-type=\"knowledge\" data-id=\"1592\">corporation tax<\/a>, and can\u2019t be considered an expense.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"dividend-tax-rates\">What are the dividend tax rates (2026-27)?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The current dividend tax rates for the 2026-27 tax year are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\">basic rate \u2013 10.75 per cent<\/li>\n\n\n\n<li class=\"wp-block-list-item\">higher rate \u2013 35.75 per cent<\/li>\n\n\n\n<li class=\"wp-block-list-item\">additional rate \u2013 39.35 per cent<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">But you need to include your dividends income in your total taxable income to know what tax band you\u2019re in. This includes your salary, <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/how-long-to-keep-tax-records\/\" data-type=\"knowledge\" data-id=\"1407\">any self-employment income<\/a>, interest from savings, and your dividend income (after the \u00a3500 allowance is deducted).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><br>And you get a personal allowance (\u00a312,570 for 2026-27) which is the amount of income you don&#8217;t pay tax on at all. This is applied before any dividend tax is calculated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"how-much-tax-do-i-pay-on-dividends\">How much tax do I pay on dividends in 2026-27?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The amount of tax you pay on dividends in the UK for the 2026-27 tax year depends on your total taxable income and the tax band you fall into:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\">dividend allowance \u2013 the first \u00a3500 of dividend income is tax-free<\/li>\n\n\n\n<li class=\"wp-block-list-item\">basic rate taxpayers (20 per cent on income) \u2013 10.75 per cent on dividend income above the \u00a3500 allowance<\/li>\n\n\n\n<li class=\"wp-block-list-item\">higher rate taxpayers (40 per cent on income) \u2013 35.75 per cent on dividend income above the \u00a3500 allowance<\/li>\n\n\n\n<li class=\"wp-block-list-item\">additional rate taxpayers (45 per cent on income) \u2013 39.35 per cent on dividend income above the \u00a3500 allowance<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"dividend-tax-changes\">Dividend tax changes for the 2026-27 tax year<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The biggest change to dividend tax was announced at Autumn Budget in November 2025 and came into effect from April 2026. The basic and higher tax rates both increased two percentage points. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The tax-free dividend allowance has been cut considerably in the last few years. It was \u00a32,000 for the 2022-23 tax year but was cut to \u00a31,000 for the 2023-24 tax year, and cut again to \u00a3500 from 2024-25. However, it will stay the same for the 2026-27 tax year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means that from April 2026, the dividend allowance remains \u00a3500<strong>.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-example-understanding-dividend-tax\">Example: understanding dividend tax<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s an example of a self-employed person working out their dividend tax liability for the 2026-26 tax year. They earn \u00a312,570 as salary and \u00a360,000 as dividends. In the 2026-27 tax year:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><\/td><td><strong>Income&nbsp;<\/strong><\/td><td><strong>Taxable amount<\/strong><\/td><td><strong>Income tax rate&nbsp;<\/strong><\/td><td><strong>Tax to pay&nbsp;<\/strong><\/td><\/tr><tr><td>Salary&nbsp;<\/td><td>\u00a312,570<\/td><td>\u00a30<\/td><td><\/td><td>\u00a30<\/td><\/tr><tr><td>Dividends&nbsp;<\/td><td>\u00a360,000<\/td><td>\u00a359,500 (minus \u00a3500 dividend allowance)&nbsp;<\/td><td><\/td><td><\/td><\/tr><tr><td>Basic rate tax band&nbsp;<\/td><td><\/td><td>\u00a349,500<\/td><td>10.75%<\/td><td>\u00a35,321.25<\/td><\/tr><tr><td>Higher rate tax band&nbsp;<\/td><td><\/td><td>\u00a310,000<\/td><td>35.75%<\/td><td>\u00a33,575<\/td><\/tr><tr><td>Total tax due:<\/td><td><\/td><td><\/td><td><\/td><td>\u00a38,896.25<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-pay-dividends-tax\">How to pay dividends tax<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The way you\u2019ll pay dividends tax is through your <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/self-employed-tax-changes\/\" data-type=\"knowledge\" data-id=\"1514\">Self Assessment tax return<\/a>. Here are the three main steps to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\"><strong>include dividend income<\/strong> \u2013 you&#8217;ll need to declare your dividend income on your Self Assessment tax return. This is where you&#8217;ll specify the total amount of dividends you received and the amount that falls within your tax-free allowance<\/li>\n\n\n\n<li class=\"wp-block-list-item\"><strong>calculate your tax<\/strong> \u2013 the Self Assessment system will calculate how much tax you owe on your dividend income based on your tax band and dividend tax rates<\/li>\n\n\n\n<li class=\"wp-block-list-item\"><strong>pay your tax<\/strong> \u2013 you&#8217;ll then pay the tax you owe online, by bank transfer, or by other methods <a data-type=\"knowledge\" data-id=\"31008\" href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/general\/hmrc-app-for-self-employed\/\">HMRC accepts<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-paying-dividend-tax-correctly-mistakes-to-avoid\">Paying dividend tax correctly: mistakes to avoid<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">It can be easy to make a mistake when calculating your dividends tax because it adds an extra layer of complexity to your tax responsibilities. Here are some <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/hmrc-errors-and-mistakes-guidance\/\" data-type=\"knowledge\" data-id=\"1398\">common mistakes<\/a> to try and avoid:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"wp-block-list-item\"><strong>not keeping accurate records <\/strong>\u2013 having patchy records of how much dividends has been paid out makes it difficult to calculate what you owe<\/li>\n\n\n\n<li class=\"wp-block-list-item\"><strong>misunderstanding the dividend allowance <\/strong>\u2013 some people don\u2019t realise that the \u00a3500 dividend allowance applies to your total dividend income, not per company<\/li>\n\n\n\n<li class=\"wp-block-list-item\"><strong>using the wrong tax band<\/strong> \u2013 if you miscalculate your total taxable income, you might end up in the wrong tax band for income and dividend tax<\/li>\n\n\n\n<li class=\"wp-block-list-item\"><strong>not seeking professional advice<\/strong> \u2013 tax is complicated and sometimes it\u2019s worth seeking the advice of accountant<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">You can also use a <a href=\"https:\/\/www.contractorcalculator.co.uk\/dividend_tax_calculator.aspx\" target=\"_blank\" rel=\"noreferrer noopener\" rel=\"noopener noreferrer\" target=\"_blank\">dividend tax calculator<\/a> to help figure out what you owe. Or consider <a href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/how-much-does-an-accountant-cost\/\" type=\"knowledge\" id=\"809\">hiring an accountant<\/a>.<\/p>\n\n\n\n<div class=\"wp-block-group has-azure-200-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-30c80bf8 wp-block-group-is-layout-constrained\" style=\"border-radius:10px;margin-top:var(--wp--preset--spacing--90);margin-bottom:var(--wp--preset--spacing--90);padding-top:var(--wp--preset--spacing--90);padding-right:var(--wp--preset--spacing--90);padding-bottom:var(--wp--preset--spacing--90);padding-left:var(--wp--preset--spacing--90)\">\n<h2 class=\"wp-block-heading\" id=\"h-key-takeaways-dividend-tax\">Key takeaways: dividend tax<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Now you should know that dividends are money paid to shareholders from your business\u2019s profits and is additional income to your salary.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The two aspects to keep in mind with dividends tax are to add your dividends to your total income and remember your tax-free allowance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When you\u2019re doing your Self Assessment tax return, add your dividends to your total income to make sure you\u2019re in the correct tax band.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And keep in mind that the first \u00a3500 of your dividends are tax-free and it applies after your personal allowance.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faq-some-common-questions\">FAQ: some common questions<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-happens-if-i-don-t-declare-my-dividends-tax-correctly\">What happens if I don\u2019t declare my dividends tax correctly?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can face penalties from HMRC for declaring your dividends tax inaccurately. It means your tax return would be over or under-charged which could lead to an HMRC investigation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-are-dividends-taxed-differently-if-my-business-is-a-limited-company\">Are dividends taxed differently if my business is a limited company?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, your dividends are taxed differently. The key difference is that limited companies pay tax on their profits first, and then the shareholders pay tax on the dividends. While sole traders\u2019 profits are treated as the owner&#8217;s income and taxed directly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-can-i-reduce-my-dividend-tax-by-reinvesting-in-my-business\">Can I reduce my dividend tax by reinvesting in my business?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can\u2019t directly reduce your dividend tax by reinvesting in your business. Because you&#8217;re taking dividends as an individual, they\u2019re subject to your personal income tax rates. But reinvesting into your business can reduce your corporation tax bill because you pay it on profits before any dividends are distributed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-are-there-any-tax-reliefs-or-exemptions-available-for-dividend-tax\">Are there any tax reliefs or exemptions available for dividend tax?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">There aren\u2019t any direct tax reliefs or exemptions for dividend tax. The only relief comes from your personal and dividends allowance which are tax-free.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-much-tax-do-you-pay-on-a-dividend\">How much tax do you pay on a dividend?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The amount of tax you pay on a dividend depends on your total taxable income and which tax bracket you\u2019re in. You\u2019ll pay tax on any dividends above the \u00a3500 allowance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-the-dividend-tax-allowance-for-2026-27\">What is the dividend tax allowance for 2026-27?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The dividend tax allowance for the 2026-27 tax year in the UK is \u00a3500. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-much-dividend-can-i-pay-myself-tax-free-in-2026\">How much dividend can I pay myself tax-free in 2026?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You can pay yourself up to \u00a3500 in dividends tax-free in 2026-27 as this is the current dividend allowance. Any dividend income above this amount will be taxed at your usual income tax rate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-the-tax-rate-on-dividends-in-the-2025-budget\">What is the tax rate on dividends in the 2025 Budget?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Changes to the dividend tax rates were announced in the 2025 Autumn Budget. The current dividend rates in 2026-27 are two percentage points higher for the basic and higher rates.<\/p>\n\n\n\n<div class=\"wp-block-group has-azure-200-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-94e519ba wp-block-group-is-layout-constrained\" style=\"padding-top:var(--wp--preset--spacing--80);padding-right:var(--wp--preset--spacing--40);padding-bottom:var(--wp--preset--spacing--80);padding-left:var(--wp--preset--spacing--40)\">\n<h3 class=\"wp-block-heading has-text-align-center\" id=\"h-ready-to-set-up-your-cover\">Ready to set up your cover?<\/h3>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\">As one of the UK&#8217;s biggest <a href=\"\/business-insurance\/\" data-type=\"page\" data-id=\"5152\">business insurance<\/a> providers, we specialise in <a href=\"\/business-insurance\/public-liability-insurance\/\" data-type=\"page\" data-id=\"734\" >public liability insurance<\/a> and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-a89b3969 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/quote.simplybusiness.co.uk\/business\">Start your quote<\/a><\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n<\/div>\n\n\n\n<div id=\"nba-body-end\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Check the dividend tax rates and allowances if you pay yourself in dividends.<\/p>\n","protected":false},"author":3,"featured_media":3713,"comment_status":"open","ping_status":"closed","template":"","meta":{"sb_hreflang":"","sb_hreflang_url":"","disable_breadcrumbs":false,"sb_breadcrumbs":[],"sb_reviewed_by":"catriona-smith","sb_review_date":"2026-05-05T15:06:32","sb_enable_content_gating":true,"footnotes":""},"categories":[336,344,110],"hidden-category":[],"coauthors":[23],"class_list":["post-1377","knowledge","type-knowledge","status-publish","has-post-thumbnail","hentry","category-business-structure","category-business-tax","category-business-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Dividend tax UK \u2013 a guide for the self-employed (2026 update)<\/title>\n<meta name=\"description\" content=\"How much is dividend tax and what is the dividend tax allowance? Check how it works if you&#039;re self-employed and pay yourself in dividends.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are the dividend tax rates for 2026?\" \/>\n<meta property=\"og:description\" content=\"How much is dividend tax and what is the dividend tax allowance? Check how it works if you&#039;re self-employed and pay yourself in dividends.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\" \/>\n<meta property=\"og:site_name\" content=\"Simply Business UK\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/simplybusiness\" \/>\n<meta property=\"article:modified_time\" content=\"2026-05-05T14:27:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/06\/what-is-a-dividend.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Dividend tax rates: a small business owner&#039;s guide\" \/>\n<meta name=\"twitter:site\" content=\"@simplybusiness\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data2\" content=\"Zach Hayward-Jones\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\"},\"author\":{\"@type\":\"Person\",\"name\":\"Zach Hayward-Jones\",\"description\":\"Zach Hayward-Jones is a Copywriter at Simply Business, with seven years of writing experience across entertainment, insurance, and financial services. With a keen interest in issues affecting the hospitality and construction sector, Zach focuses on news relevant to small business owners. Covering industry updates, regulatory changes, and practical guides. <a href=\\\"https:\/\/www.linkedin.com\/in\/zach-hayward-jones-52b697162\/\\\" target=\\\"_blank\\\" rel=\\\"noopener\\\">Connect with Zach on LinkedIn.<\/a>\"},\"headline\":\"Dividend tax rates: a small business owner&#8217;s guide\",\"datePublished\":\"2025-02-21T14:22:17+00:00\",\"dateModified\":\"2026-05-05T14:27:19+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\"},\"wordCount\":1465,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg\",\"articleSection\":[\"Business structure\",\"Business tax\",\"Small business news\"],\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#respond\"]}],\"reviewedBy\":{\"@type\":\"Person\",\"name\":\"Catriona Fuller\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#\/schema\/person\/aaab232820edf6154586490d651d7a0a\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\",\"url\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\",\"name\":\"Dividend tax UK \u2013 a guide for the self-employed (2026 update)\",\"isPartOf\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg\",\"datePublished\":\"2025-02-21T14:22:17+00:00\",\"dateModified\":\"2026-05-05T14:27:19+00:00\",\"description\":\"How much is dividend tax and what is the dividend tax allowance? Check how it works if you're self-employed and pay yourself in dividends.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage\",\"url\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg\",\"contentUrl\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg\",\"width\":815,\"height\":544,\"caption\":\"deagreez\/stock.adobe.com\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.simplybusiness.co.uk\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Knowledge\",\"item\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/%category%\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Dividend tax rates: a small business owner&#8217;s guide\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#website\",\"url\":\"https:\/\/www.simplybusiness.co.uk\/\",\"name\":\"Simply Business UK\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.simplybusiness.co.uk\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/#\/schema\/person\/73ec77668d0ec554cd7df8942c664049\",\"name\":\"elliottstocks\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp9df6147f02078f0218660330fdfbacf3\",\"url\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp\",\"contentUrl\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp\",\"caption\":\"elliottstocks\"}},{\"@type\":\"PostalAddress\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#local-main-place-address\",\"streetAddress\":\"Hylo, 105 Bunhill Row\",\"addressLocality\":\"London\",\"postalCode\":\"EC1Y 8LZ\",\"addressCountry\":\"GB\"},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#local-main-organization-logo\",\"url\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/logo.png\",\"contentUrl\":\"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/logo.png\",\"width\":533,\"height\":187,\"caption\":\"Simply Business UK\"}]}<\/script>\n<meta name=\"geo.placename\" content=\"London\" \/>\n<meta name=\"geo.region\" content=\"United Kingdom (UK)\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Dividend tax UK \u2013 a guide for the self-employed (2026 update)","description":"How much is dividend tax and what is the dividend tax allowance? Check how it works if you're self-employed and pay yourself in dividends.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","og_locale":"en_GB","og_type":"article","og_title":"What are the dividend tax rates for 2026?","og_description":"How much is dividend tax and what is the dividend tax allowance? Check how it works if you're self-employed and pay yourself in dividends.","og_url":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","og_site_name":"Simply Business UK","article_publisher":"https:\/\/www.facebook.com\/simplybusiness","article_modified_time":"2026-05-05T14:27:19+00:00","og_image":[{"url":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/06\/what-is-a-dividend.jpg","type":"","width":"","height":""}],"twitter_card":"summary_large_image","twitter_title":"Dividend tax rates: a small business owner's guide","twitter_site":"@simplybusiness","twitter_misc":{"Est. reading time":"7 minutes","Written by":"Zach Hayward-Jones"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#article","isPartOf":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/"},"author":{"@type":"Person","name":"Zach Hayward-Jones","description":"Zach Hayward-Jones is a Copywriter at Simply Business, with seven years of writing experience across entertainment, insurance, and financial services. With a keen interest in issues affecting the hospitality and construction sector, Zach focuses on news relevant to small business owners. Covering industry updates, regulatory changes, and practical guides. <a href=\"https:\/\/www.linkedin.com\/in\/zach-hayward-jones-52b697162\/\" target=\"_blank\" rel=\"noopener\">Connect with Zach on LinkedIn.<\/a>"},"headline":"Dividend tax rates: a small business owner&#8217;s guide","datePublished":"2025-02-21T14:22:17+00:00","dateModified":"2026-05-05T14:27:19+00:00","mainEntityOfPage":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/"},"wordCount":1465,"commentCount":0,"publisher":{"@id":"https:\/\/www.simplybusiness.co.uk\/#organization"},"image":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage"},"thumbnailUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg","articleSection":["Business structure","Business tax","Small business news"],"inLanguage":"en-GB","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#respond"]}],"reviewedBy":{"@type":"Person","name":"Catriona Fuller","@id":"https:\/\/www.simplybusiness.co.uk\/#\/schema\/person\/aaab232820edf6154586490d651d7a0a"}},{"@type":"WebPage","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","url":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","name":"Dividend tax UK \u2013 a guide for the self-employed (2026 update)","isPartOf":{"@id":"https:\/\/www.simplybusiness.co.uk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage"},"image":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage"},"thumbnailUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg","datePublished":"2025-02-21T14:22:17+00:00","dateModified":"2026-05-05T14:27:19+00:00","description":"How much is dividend tax and what is the dividend tax allowance? Check how it works if you're self-employed and pay yourself in dividends.","breadcrumb":{"@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#primaryimage","url":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg","contentUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg","width":815,"height":544,"caption":"deagreez\/stock.adobe.com"},{"@type":"BreadcrumbList","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.simplybusiness.co.uk\/"},{"@type":"ListItem","position":2,"name":"Knowledge","item":"https:\/\/www.simplybusiness.co.uk\/knowledge\/%category%\/"},{"@type":"ListItem","position":3,"name":"Dividend tax rates: a small business owner&#8217;s guide"}]},{"@type":"WebSite","@id":"https:\/\/www.simplybusiness.co.uk\/#website","url":"https:\/\/www.simplybusiness.co.uk\/","name":"Simply Business UK","description":"","publisher":{"@id":"https:\/\/www.simplybusiness.co.uk\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.simplybusiness.co.uk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Person","@id":"https:\/\/www.simplybusiness.co.uk\/#\/schema\/person\/73ec77668d0ec554cd7df8942c664049","name":"elliottstocks","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp9df6147f02078f0218660330fdfbacf3","url":"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp","contentUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/themes\/simply-business\/dist\/images\/default-author-avatar.webp","caption":"elliottstocks"}},{"@type":"PostalAddress","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#local-main-place-address","streetAddress":"Hylo, 105 Bunhill Row","addressLocality":"London","postalCode":"EC1Y 8LZ","addressCountry":"GB"},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/#local-main-organization-logo","url":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/logo.png","contentUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/logo.png","width":533,"height":187,"caption":"Simply Business UK"}]},"geo.placename":"London","geo.region":"United Kingdom (UK)"},"parsely":{"version":"1.1.0","canonical_url":"https:\/\/simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","smart_links":{"inbound":0,"outbound":0},"traffic_boost_suggestions_count":0,"meta":{"@context":"https:\/\/schema.org","@type":"NewsArticle","headline":"Dividend tax rates: a small business owner&#8217;s guide","url":"http:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/","mainEntityOfPage":{"@type":"WebPage","@id":"http:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/dividend-tax-simplified-a-guide-for-small-business-owners\/"},"thumbnailUrl":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg?w=150&h=150&crop=1","image":{"@type":"ImageObject","url":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/05\/what-is-a-dividend.jpg"},"articleSection":"Business structure","author":[{"@type":"Person","name":"Zach Hayward-Jones"}],"creator":["Zach Hayward-Jones"],"publisher":{"@type":"Organization","name":"Simply Business UK","logo":"https:\/\/www.simplybusiness.co.uk\/wp-content\/uploads\/sites\/3\/2024\/04\/icon-512x512-1.png"},"keywords":[],"dateCreated":"2025-02-21T14:22:17Z","datePublished":"2025-02-21T14:22:17Z","dateModified":"2026-05-05T14:27:19Z"},"rendered":"<script type=\"application\/ld+json\" class=\"wp-parsely-metadata\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@type\":\"NewsArticle\",\"headline\":\"Dividend tax rates: a small business owner&#8217;s guide\",\"url\":\"http:\\\/\\\/www.simplybusiness.co.uk\\\/knowledge\\\/business-tax\\\/dividend-tax-simplified-a-guide-for-small-business-owners\\\/\",\"mainEntityOfPage\":{\"@type\":\"WebPage\",\"@id\":\"http:\\\/\\\/www.simplybusiness.co.uk\\\/knowledge\\\/business-tax\\\/dividend-tax-simplified-a-guide-for-small-business-owners\\\/\"},\"thumbnailUrl\":\"https:\\\/\\\/www.simplybusiness.co.uk\\\/wp-content\\\/uploads\\\/sites\\\/3\\\/2024\\\/05\\\/what-is-a-dividend.jpg?w=150&h=150&crop=1\",\"image\":{\"@type\":\"ImageObject\",\"url\":\"https:\\\/\\\/www.simplybusiness.co.uk\\\/wp-content\\\/uploads\\\/sites\\\/3\\\/2024\\\/05\\\/what-is-a-dividend.jpg\"},\"articleSection\":\"Business structure\",\"author\":[{\"@type\":\"Person\",\"name\":\"Zach Hayward-Jones\"}],\"creator\":[\"Zach Hayward-Jones\"],\"publisher\":{\"@type\":\"Organization\",\"name\":\"Simply Business UK\",\"logo\":\"https:\\\/\\\/www.simplybusiness.co.uk\\\/wp-content\\\/uploads\\\/sites\\\/3\\\/2024\\\/04\\\/icon-512x512-1.png\"},\"keywords\":[],\"dateCreated\":\"2025-02-21T14:22:17Z\",\"datePublished\":\"2025-02-21T14:22:17Z\",\"dateModified\":\"2026-05-05T14:27:19Z\"}<\/script>","tracker_url":"https:\/\/cdn.parsely.com\/keys\/simplybusiness.co.uk\/p.js"},"_links":{"self":[{"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/knowledge\/1377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/knowledge"}],"about":[{"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/types\/knowledge"}],"author":[{"embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/comments?post=1377"}],"version-history":[{"count":10,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/knowledge\/1377\/revisions"}],"predecessor-version":[{"id":50782,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/knowledge\/1377\/revisions\/50782"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/media\/3713"}],"wp:attachment":[{"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/media?parent=1377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/categories?post=1377"},{"taxonomy":"hidden-category","embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/hidden-category?post=1377"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.simplybusiness.co.uk\/wp-json\/wp\/v2\/coauthors?post=1377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}