Dividend Taxes change in 2016 and limited company contractors will be subject to new taxes that will take effect from dividend income that is as low as £10,000.
You can use the table below to tell at-a-glance how much extra tax you will pay on your dividend. Simply find your dividend in the ‘Dividend’ column, and then check right in the ‘Dividend Tax 2015/2016’ column to see how much tax you need to pay. The next column along tells you how much extra tax you will pay in the 2016/2017 tax year compared to what you are paying now.
To find out exactly how much extra dividend tax you will pay from 6 April 2016 as a result of the new rules, you can use our Dividend Tax Changes Impact Calculator. The calculator will use your exact dividend figures to work out your additional tax liability.
NOTE - 20th August 2015: These calculations have been updated based on the HMRC factsheet released on 17th August 2015. Contrary to experts opinion after the Summer Budget the Dividend Tax Allowance isn't actually an allowance in the normally used sense - instead it is a zero-rate tax band and counts towards income when calculating your total taxable income. The first £5000 is taxed at 0% and then the marginal rate is used for the associated tax bracket. For more information see HMRC clarification of Dividend Tax changes will cost most contractors another £1250.
In the table below, locate either your gross profit or net dividend to determine the impact the new dividend rules will have on you. For family owned businesses or for contractors who split dividends with their spouses each persons extra tax needs to be considered.
| Gross profit(£) | Dividend(£) | Dividend Tax 2015/2016(£) | Dividend Tax 2016/2017(£) | Change(£) | Percentage rise (%) |
|---|---|---|---|---|---|
| 12,500 | 10,000 | - | 155 | 155 | - |
| 15,625 | 12,500 | - | 342 | 342 | - |
| 18,750 | 15,000 | - | 530 | 530 | - |
| 21,875 | 17,500 | - | 717 | 717 | - |
| 25,000 | 20,000 | - | 905 | 905 | - |
| 28,125 | 22,500 | - | 1,092 | 1,092 | - |
| 31,250 | 25,000 | - | 1,280 | 1,280 | - |
| 34,375 | 27,500 | - | 1,467 | 1,467 | - |
| 37,500 | 30,000 | - | 1,655 | 1,655 | - |
| 40,625 | 32,500 | 402 | 1,842 | 1,440 | 4.4 |
| 43,750 | 35,000 | 1,027 | 2,045 | 1,018 | 2.9 |
| 46,875 | 37,500 | 1,652 | 2,857 | 1,205 | 3.2 |
| 50,000 | 40,000 | 2,277 | 3,670 | 1,393 | 3.5 |
| 53,125 | 42,500 | 2,902 | 4,482 | 1,580 | 3.7 |
| 56,250 | 45,000 | 3,527 | 5,295 | 1,768 | 3.9 |
| 59,375 | 47,500 | 4,152 | 6,107 | 1,955 | 4.1 |
| 62,500 | 50,000 | 4,777 | 6,920 | 2,143 | 4.3 |
| 65,625 | 52,500 | 5,402 | 7,732 | 2,330 | 4.4 |
| 68,750 | 55,000 | 6,027 | 8,545 | 2,518 | 4.6 |
| 71,875 | 57,500 | 6,652 | 9,357 | 2,705 | 4.7 |
| 75,000 | 60,000 | 7,277 | 10,170 | 2,893 | 4.8 |
| 78,125 | 62,500 | 7,902 | 10,982 | 3,080 | 4.9 |
| 81,250 | 65,000 | 8,527 | 11,795 | 3,268 | 5.0 |
| 84,375 | 67,500 | 9,152 | 12,607 | 3,455 | 5.1 |
| 87,500 | 70,000 | 9,777 | 13,420 | 3,643 | 5.2 |
| 90,625 | 72,500 | 10,402 | 14,232 | 3,830 | 5.3 |
| 93,750 | 75,000 | 11,027 | 15,045 | 4,018 | 5.4 |
| 96,875 | 77,500 | 11,652 | 15,857 | 4,205 | 5.4 |
| 100,000 | 80,000 | 12,277 | 16,670 | 4,393 | 5.5 |
| 103,125 | 82,500 | 12,902 | 17,482 | 4,580 | 5.6 |
| 106,250 | 85,000 | 13,527 | 18,295 | 4,768 | 5.6 |
| 109,375 | 87,500 | 14,152 | 19,107 | 4,955 | 5.7 |
| 112,500 | 90,000 | 14,777 | 19,920 | 5,143 | 5.7 |
| 115,625 | 92,500 | 15,402 | 20,732 | 5,330 | 5.8 |
| 118,750 | 95,000 | 16,027 | 21,545 | 5,518 | 5.8 |
| 121,875 | 97,500 | 16,652 | 22,357 | 5,705 | 5.9 |
| 125,000 | 100,000 | 17,277 | 23,170 | 5,893 | 5.9 |
| 128,125 | 102,500 | 17,902 | 23,982 | 6,080 | 5.9 |
| 131,250 | 105,000 | 18,527 | 24,795 | 6,268 | 6.0 |
| 134,375 | 107,500 | 19,152 | 25,607 | 6,455 | 6.0 |
| 137,500 | 110,000 | 19,777 | 26,420 | 6,643 | 6.0 |
| 140,625 | 112,500 | 20,402 | 27,232 | 6,830 | 6.1 |
| 143,750 | 115,000 | 21,027 | 28,045 | 7,018 | 6.1 |
| 146,875 | 117,500 | 21,652 | 28,857 | 7,205 | 6.1 |
| 150,000 | 120,000 | 22,277 | 29,670 | 7,393 | 6.2 |
| 153,125 | 122,500 | 22,902 | 30,482 | 7,580 | 6.2 |
| 156,250 | 125,000 | 23,527 | 31,295 | 7,768 | 6.2 |
| 159,375 | 127,500 | 24,152 | 32,107 | 7,955 | 6.2 |
| 162,500 | 130,000 | 24,777 | 32,920 | 8,143 | 6.3 |
| 165,625 | 132,500 | 25,402 | 33,732 | 8,330 | 6.3 |
| 168,750 | 135,000 | 26,027 | 34,545 | 8,518 | 6.3 |
| 171,875 | 137,500 | 26,664 | 35,357 | 8,693 | 6.3 |
| 175,000 | 140,000 | 27,428 | 36,170 | 8,742 | 6.2 |
| 178,125 | 142,500 | 28,192 | 36,982 | 8,790 | 6.2 |
| 181,250 | 145,000 | 28,955 | 37,795 | 8,839 | 6.1 |
| 184,375 | 147,500 | 29,719 | 38,607 | 8,888 | 6.0 |
| 187,500 | 150,000 | 30,483 | 39,420 | 8,936 | 6.0 |
| 190,625 | 152,500 | 31,247 | 40,232 | 8,985 | 5.9 |
| 193,750 | 155,000 | 32,011 | 41,160 | 9,149 | 5.9 |
| 196,875 | 157,500 | 32,775 | 42,112 | 9,337 | 5.9 |
| 200,000 | 160,000 | 33,539 | 43,065 | 9,526 | 6.0 |
| 203,125 | 162,500 | 34,303 | 44,017 | 9,715 | 6.0 |
| 206,250 | 165,000 | 35,067 | 44,970 | 9,903 | 6.0 |
| 209,375 | 167,500 | 35,830 | 45,922 | 10,092 | 6.0 |
| 212,500 | 170,000 | 36,594 | 46,875 | 10,281 | 6.0 |
| 215,625 | 172,500 | 37,358 | 47,827 | 10,469 | 6.1 |
| 218,750 | 175,000 | 38,122 | 48,780 | 10,658 | 6.1 |
| 221,875 | 177,500 | 38,886 | 49,732 | 10,846 | 6.1 |
| 225,000 | 180,000 | 39,650 | 50,685 | 11,035 | 6.1 |
| 228,125 | 182,500 | 40,414 | 51,637 | 11,224 | 6.1 |
| 231,250 | 185,000 | 41,178 | 52,590 | 11,412 | 6.2 |
| 234,375 | 187,500 | 41,942 | 53,542 | 11,601 | 6.2 |
| 237,500 | 190,000 | 42,705 | 54,495 | 11,789 | 6.2 |
| 240,625 | 192,500 | 43,469 | 55,447 | 11,978 | 6.2 |
| 243,750 | 195,000 | 44,233 | 56,400 | 12,167 | 6.2 |
| 246,875 | 197,500 | 44,997 | 57,352 | 12,355 | 6.3 |
| 250,000 | 200,000 | 45,761 | 58,305 | 12,544 | 6.3 |
A few assumptions have been made in these calcuations:
- The Dividend Tax Allowance is NOT a tax-free allowance and treated as a zero rate band. The first £5,000 of dividends are taxed at 0%, and then the associated marginal rate is used.
- Your salary is set at the current optimal of £8060 per year
- You have no other income (if you do then use our impact calculator to include those)