Change to Dividend Tax Rates

With effect from the 6th April 2026 the income tax rates applicable to dividends increase by 2% ( with the exception of the higher rate applicable to additional rate tax payers which remains at 39.35%). So basic rate tax payers will see an increase from 8.75% to 10.75% and higher rate taxpayers from 33.75% to 35.75%. This will impact director/shareholders who take most of their remuneration from their companies in the form of dividends. It’s advised to review their remuneration strategy to see whether it will be tax efficient to take more as salary ( as opposed to dividends). Individual circumstances will differ.