The end of the 2025/2026 tax year marked a change in how you must report dividend income accurately as part of wider personal tax reforms.
It is now necessary for directors of close companies to disclose their company name, registration number, specific dividend amounts and their highest percentage shareholding on Self-Assessment returns.
You must also show dividends from your own company separately from other income.
What are the dividend tax rates for 2026/2027?
On 6 April 2026, the two dividend rates increased by two percentage points:
Additional rate taxpayers will be unaffected by changes and will continue to pay dividend tax at a 39.35 per cent.
The dividend allowance also remains at £500 and applies to all rates.
Despite these changes, dividends will likely continue to offer a tax advantage over salaries in most cases, though there does seem to be some intent to close this gap.
In order to stay as efficient as possible, directors should review how they take profits and determine if their current mix of salary and dividends is still the best course of action.
Who has to report dividend tax?
Shareholders and company directors are the ones to whom dividend tax most commonly applies.
Anyone who receives dividends outside of a pension or ISA over the £500 allowance threshold must report them to HMRC.
You may be required to submit a Self-Assessment tax return if you receive more than £10,000 in dividends.
Our team is here to help you stay compliant with dividend tax.
We can review your position and help you to understand the latest changes from HMRC so that you can establish a clear plan to suit your individual needs.
Get in touch if you would like to better understand and protect your finances.
