Tax on dividends

2. Tax on dividends before 6 April 2016

There were different rules for tax on dividends before 6 April 2016.

Dividend tax rates

The tax you pay depends on which Income Tax bands your dividends are in.

Add your other taxable income to your dividends to work out the band they’re in. You may pay tax at more than one rate.

Tax band Effective dividend tax rate
Basic rate (and non-taxpayers) 0%
Higher rate 25%
Additional rate 30.56%
Additional rate - dividends paid before April 2013 36.11%

Work out what you owe

You should have got a dividend voucher. This usually shows:

  • the dividend amount
  • a ‘tax credit’ - this is one-ninth of the dividend

Work out the tax you owe by multiplying the dividend amount by the effective tax rate. Ignore the tax credit.

How you pay tax

If you need to send a tax return, fill in the ‘Dividends’ section in your return. If you don’t need to send one, contact the helpline.

HM Revenue and Customs (HMRC) will tell you what you owe based on what you report and the dividend tax rates.