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Dividend Tax Alert for Directors and Shareholders: Act Before 6 April 2026

Dividend Tax Alert for Directors and Shareholders

Dividend Tax Changes 2026 Explained

The dividend tax changes coming into effect in April 2026 will impact directors and shareholders across the UK. Understanding how these changes affect your income and tax planning is essential if you want to avoid paying more tax than necessary.

Amy at Findlay Todd

Written By Amy Smith

  • 5 minutes read

Dividend Tax Alert for Directors and Shareholders: Act Before 6 April 2026

At Findlay Todd Accountants, we always keep a close eye on upcoming tax changes so our clients can plan ahead and avoid paying more than they need to.

Here’s an important update for company directors and shareholders:

From 6 April 2026, dividend tax rates are set to increase by 2%.

What This Means for You

If you take a typical mix of salary and dividends, this change could have a noticeable impact on your take-home income.

Example

If you withdraw £50,270 in salary and dividends:
  • 2025/26 tax year Tax payable: £3,211
  • 2026/27 tax year Tax payable: £3,945
 
That’s an increase of £734 in tax on exactly the same income.

Planning Opportunity Before the Deadline

There is still time to act before the new rates come into force. Tip: If it’s appropriate for your circumstances, consider maximising dividend payments before 5 April 2026 to take advantage of the current, lower tax rates.

This can be a simple but effective way to:

  • Reduce your overall tax bill
  • Make the most of available allowances
  • Improve your net income

Important Considerations

Before taking action, it’s important to make sure:

  • Your company has sufficient distributable profits
  • Dividends are declared and documented correctly
  • Your overall income remains tax-efficient when considering other thresholds and allowances

Taking dividends without proper planning can lead to unexpected tax consequences, so it’s always best to review your position first.

How Findlay Todd Accountants Can Help

Our team works closely with company directors and shareholders to ensure they:

  • Extract profits in the most tax-efficient way
  • Stay compliant with HMRC requirements
  • Plan ahead for upcoming tax changes

If you’d like us to review your dividend strategy ahead of April 2026, we’re here to help.

Don’t Pay More Tax Than You Need To

With dividend tax rates rising, forward planning is key.

If you’re a director or shareholder, now is the ideal time to review your income strategy for the current tax year.

Contact Findlay Todd Accountants today and let’s make sure you keep more of what you earn.

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