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!
No – National Insurance is not payable on dividends.
Your method of paying tax on your dividends is dependent on the amount you earn in dividends that year: