Dividend Allowance

The dividend allowance is a tax relief that allows you to earn a certain amount from dividends each year, tax-free. In the 2023/2024 tax year, the dividend allowance is £1000. Any earnings from dividends up to this amount are not taxable, so you will only pay tax on anything earned beyond this. Dividends on any shares held in a Stocks & Shares ISA are entirely tax-free, so the dividend allowance does not apply to them.  For more information about dividends and their tax rates, visit our helpful Dividend glossary page!

Frequently Asked Questions

  • Do I need to pay National Insurance on dividends?

    No – National Insurance is not payable on dividends.

  • How do I pay tax on my dividends?

    Your method of paying tax on your dividends is dependent on the amount you earn in dividends that year:

    • If you earn between £1,000 and £10,000, you can either do a Self Assessment tax return or pay through your PAYE tax code
    • If you earn over £10,000 from dividends, you have to file a Self Assessment tax return

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