03/09/2026
📉 Dividends Just Got a Little Thinner
If you’re a UK limited company owner, it may be time to rethink your salary-and-dividend strategy.
From 6 April 2026, dividend tax rates are increasing by 2 percentage points for basic and higher-rate taxpayers.
Here’s what’s changing:
Basic rate: 10.75%
Higher rate: 35.75%
Additional rate: 39.35%
Dividend allowance has already reduced from £2,000 → £1,000 → £500
For business owners who rely heavily on dividends, this could mean a noticeable increase in their personal tax bill.
But the bigger question is:
Does the salary + dividend strategy that worked for you a couple of years ago still make sense today?
There are several areas worth reviewing, including:
✅ Salary vs dividend split
✅ Employer pension contributions
✅ Timing of dividend payments
✅ Your overall tax and compliance position
The change doesn’t mean dividends are no longer tax-efficient. It simply means the numbers need to be reviewed again.
At Brit Balance, we help UK business owners make informed decisions as tax rules evolve.
read more at.....
https://britbalance.com/dividend-tax-rise-2026-uk-business-owners/