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MTD for ITSA: Mandation for businesses and landlords with income over £50,000 begins April 2026.
FHL Abolition: The Furnished Holiday Lettings tax regime is officially abolished as of April 2025.

2026/27 TAX YEAR IS HERE MTD FOR INCOME TAX NOW MANDATORY FOR LANDLORDS & SELF-EMPLOYED OVER £50K DIVIDEND TAX RATES INCREASED TO 10.75% & 35.75% — OPTIMISE YOUR PAYOUTS ADVANCED CALCULATORS FOR PROPERTY, CRYPTO, AND INHERITANCE TAX HERE

Estimated calculation • • uktaxhero.com
🇬🇧 UKTH Tax Suite 2027  ·  HMRC-Compliant  ·  Trusted by 50,000+ UK taxpayersNeed expert help? →
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📅 Tax Year

💼 Director Details

£
£

How This Calculator Works

💼 Optimal Salary

Calculates the tax-efficient salary level for directors, balancing NIC, Income Tax and Corporation Tax.

📈 Full Picture

Shows all taxes paid: Corporation Tax, Income Tax, employee NIC, employer NIC and dividend tax in one view.

💑 Dividend Split

Works out the optimal mix of salary and dividends to maximise your net take-home pay from the company.

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Frequently Asked Questions

What is the optimal director salary?

For sole directors with no Employment Allowance, the optimal salary is typically the NIC Primary Threshold (£12,570). For directors with EA available, taking salary up to the Secondary Threshold (£5,000 in 2025/26) or higher may be optimal. Always verify with an accountant as individual circumstances vary.

Why take salary at all if dividends are more tax efficient?

Salary counts as a pensionable earning for State Pension purposes. At minimum, taking a salary equal to the Lower Earnings Limit (£6,396) protects your NI record without paying NIC. Salary is also a deductible expense for Corporation Tax, unlike dividends.

Estimated calculation • • uktaxhero.com
🇬🇧 UKTH Tax Suite 2027  ·  HMRC-Compliant  ·  Trusted by 50,000+ UK taxpayersNeed expert help? →
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Important: Illustrative estimates based on HMRC published rates. Actual liabilities vary. Find a Tax Expert →
👤 Find Expert

📅 Tax Year

📈 Dividend Details

£
£

How This Calculator Works

📈 Dividend Allowance

First £500 of dividends (2024/25+) are tax-free via the Dividend Allowance.

📅 Rate Changes

2026/27 higher dividend rate increased to 35.75%. Calculator applies correct rates per year.

👮 Uses Tax Bandwidth

Dividends are taxed using remaining basic rate band after other income, matching HMRC treatment.

Need More Than a Calculator?

UK Tax Hero connects you with qualified tax specialists for filing, HMRC investigations, tax planning and more.

📋 Self Assessment🔍 HMRC Investigations🏢 Property & CGT💼 Contractor / IR35📢 Tax Disputes🌎 Expat Tax📚 IHT Planning📈 Business Tax
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Frequently Asked Questions

How are dividends taxed in 2026/27?

After the £500 Dividend Allowance, dividends are taxed at: 10.75% (basic rate band), 35.75% (higher rate), 39.35% (additional rate). Your other income uses up the basic rate band first.

Do I pay NI on dividends?

No. Dividends are not subject to National Insurance contributions.