Tax Bands and Allowances

Key facts for 2026/27:

• Personal Allowance: £12,570
• Basic rate: 20% up to £37,700
• Higher rate: 40% up to £125,140
• Additional rate: 45% above that

Dividend Tax Changes – What Business Owners Need to Know

If you run a limited company, dividend tax is now more important than ever.

Current rules:

• Dividend allowance: £500

Why this matters

This means:

• More of your dividends are taxable
• Profit extraction strategies need reviewing

Tax rates still apply:

• 8.75% (basic rate)
• 33.75% (higher rate)
• 39.35% (additional rate)