Salary vs Dividends — Director Pay
How are UK dividends taxed in 2026/27?
The 2026/27 dividend rates, allowance, and top-slice mechanic.
In 2026/27 the first £500 of dividends is tax-free. Above that, dividends are taxed at **10.75%** (basic), **35.75%** (higher), or **39.35%** (additional) — based on where they sit as the "top slice" of your total income. The basic and higher rates rose by 2 points from 6 April 2026 (Autumn 2025 Budget). The additional rate is unchanged. **Read the full guide at [rraccountants.uk/how-dividends-are-taxed-uk-2026](https://rraccountants.uk/how-dividends-are-taxed-uk-2026).**
Resources
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