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Personal Tax Thresholds

The tax-free personal allowance is £12,570 (this is restricted when income exceeds £100,000). If you receive a salary from your company, this is likely to use up most or all of your personal allowance.

The basic rate tax threshold applies to the next £37,700 of income. Dividends taken within this band are subject to basic rate dividend tax of 8.75%, with the exception of the first £2,000 which utilise a tax-free dividend allowance.

Dividends taken when your income exceeds the basic rate threshold (£50,270) will suffer higher rate dividend tax of 33.75%. Dividends taken when your income exceeds the additional rate tax threshold (£150k total income) are subject to additional rate dividend tax of 39.35%.

There are slightly different bands and tax rates for Scottish residents, please get in touch with your accountant for bespoke tax planning.

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