Reporting Dividends on Self Assessment

Dividends are taxed at different rates from other income and have their own allowance. Here is how they work on your Self Assessment return.

The Dividend Allowance

For 2026/27, the first £500 of dividend income is tax-free (the dividend allowance). Dividends above this are taxed at:

| Tax band | Dividend rate | |----------|-------------| | Basic rate | 8.75% | | Higher rate | 33.75% | | Additional rate | 39.35% |

Who Needs to Report Dividends

You need to report dividends on Self Assessment if:

• Your dividend income exceeds £500 (the dividend allowance)
• You are a higher-rate or additional-rate taxpayer receiving any dividends
• You are a company director paying yourself dividends

If your total dividend income is under £500 and you have no other reason to file Self Assessment, you may not need to report.

On Your Return

Report dividend income in the income section. Enter the total dividends received during the tax year. HMRC calculates the tax, applying the dividend allowance and the correct rate based on your total income.

Company Directors

Many limited company directors pay themselves a small salary plus dividends. The dividends come from company profits after Corporation Tax. They are more tax-efficient than salary because they avoid National Insurance, but they are still taxable through Self Assessment.

Accounted tracks all your income sources and includes dividends in your tax calculations.

MTD is coming. Accounted is already compliant. Start free and be ready before the deadline.