UK 2028 Dividend Tax
UK 2028 dividend: £500 allowance. 8.75% basic, 33.75% higher, 39.35% additional. Allowance cut from £2,000 (2022-23) to £500 (2024+) = bracket creep.
| Dividend income | — |
| Dividend allowance | — |
| Basic-rate dividend | — |
| Higher-rate dividend | — |
| Additional-rate dividend | — |
| UK 2028 dividend tax | — |
UK 2028 dividend tax: £500 allowance (down from £2,000 in 2022-23 and £5,000 in 2017-18). Rates 8.75% basic, 33.75% higher, 39.35% additional. Dividends stack on top of other income for bracket purposes. Company owners paying themselves dividends face significantly higher tax bills than 5 years ago.
Allowance Decline
2017-18: £5,000. 2018-22: £2,000. 2023-24: £1,000. 2024-25+: £500. 90% reduction in 7 years. Combined with frozen PA and dividend rate hikes (2022 NI 'levy' added 1.25% permanently): company owners' tax burden up ~£2,000-3,000/year vs 2021 baseline.
Stacking with Income
Dividends taxed after other income fills the bracket. Higher salary first = more dividends at higher rates. Common strategy: take salary up to PA (£12,570 = no income tax, no NI below ST), then dividends to consume basic-rate band.
ISA + Pension Wrappers
Dividends inside ISA or pension = no tax. Cap £20k/year ISA + £60k/year pension AA = £80k/year potential dividend-shelterable savings. Company owners should max both before paying dividends outside wrappers.
Last updated May 2026. Sources: HMRC Dividends.