2025/26 self-assessment tax returns will require more information to be provided regarding dividends received by directors of close companies.
Directors of close companies must disclose the company name, registration number, specific dividend amounts and their highest percentage shareholding on Self-Assessment returns.
Such dividends must also be shown separately from other dividends.
Dividend tax rates for 2026/27
For the 2026/27 tax year, which commenced on 6 April 2026, two dividend tax rates have increased by two percentage points:
- Basic rate has risen to 10.75 per cent
- Higher rate has risen to 35.75 per cent
There is currently no increase for additional rate taxpayers, who will continue to pay dividend tax at 39.35 per cent.
The annual dividend allowance also remains at £500 for all individuals.
Dividends continue to offer a tax advantage over salary in most cases, although the difference between the two is reducing.
Directors should review how profits are taken and consider whether the current mix of salary and dividends remains appropriate.
What are the dividend reporting requirements?
Individuals receiving dividends outside of an Individual Savings Account (ISA) over the £500 allowance must report them to HMRC.
Anyone who receives more than £10,000 in dividends may be required to submit a Self-Assessment tax return.
Reviewing your position
If you have concerns about dividend taxation or wider financial pressures, we can review your tax position, explain the latest changes from HMRC and help you create a bespoke plan to meet your personal financial goals.
Looking to understand and protect your finances? Speak to our experts.
