How are dividends taxed?

Dividends are taken on the profits available in your company and are a generally a more tax efficient compared to a salary. 

Tax is paid on any dividends received over £2,000 at the following rates:

  1. Basic rate - 8.75%

  2. Higher rate - 33.75%

  3. Additional rate - 39.35%

The amount of dividend tax you are required to pay is calculated on a Self Assessment tax return each year.