Dividend Tax Calculator

For the 2026/27 tax year, the dividend allowance is reduced to £500, with tax charged at 10.75% for basic rate, 35.75% for higher rate, and 39.35% for additional rate taxpayers. These rates apply to dividend income exceeding the £500 allowance within your total taxable income. You can find the official rates on the GOV.UK website under personal tax rates.

From 6 April 2026, self-employed individuals and landlords with gross income over £50,000 must use MTD ITSA to submit quarterly updates and a final declaration. This replaces the traditional Self Assessment tax return for eligible businesses, requiring digital record-keeping via compatible software. HMRC has confirmed this threshold applies to the 2026/27 tax year onwards.

From April 2026, employers pay 15% Class 1 National Insurance on earnings above £5,000 per employee, with no secondary threshold reduction. This rate applies to most employees and is a significant increase from previous years to fund public services. The £5,000 threshold is the starting point for calculating employer contributions under the new rules.

If a limited company lends money to a director or shareholder (a participator), it must pay 35.75% s455 tax on the outstanding loan amount if not repaid within nine months of the accounting period end. This rate matches the higher dividend tax rate for 2026/27 and is refundable to the company once the loan is repaid. The calculation is based on the full loan balance outstanding at the deadline.

The VAT registration threshold remains at £90,000 for the 2026/27 tax year, meaning businesses must register if their taxable turnover exceeds this amount in any 12-month period. Companies must also register if they expect to exceed £90,000 in the next 30 days alone. These figures are confirmed by HMRC for the current fiscal planning cycle.