Knowledge Centre Category: Shares, Options & Dividends

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Newsletter Budget 2025 – Increases in dividend tax from April 2026

Dividend tax rates will rise by 2% from April 2026, affecting those with less than £125,000 of other income, while the additional rate remains unchanged. Our analysis shows it is still optimal for most business owners to take a salary up to the £12,570 personal allowance and dividends on top, though charities and social enterprises paying only salaries remain unaffected by these changes.

Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)

The Enterprise Investment Scheme (EIS and SEIS) offers tax benefits to those investing in new shares of trading companies. This benefits the investor and encourages investment in the company in its early stages.

Enterprise Management Incentive (EMI) Share Option Schemes

Enterprise Management Incentive (EMI) share option schemes are designed to help small businesses attract, motivate, and retain key members of staff. These schemes are tax efficient and straightforward to administer, making them suitable for a wide range of companies.

Employment Related Securities

Employment Related Securities (ERS) refers to shares, options, or other securities that are acquired by an individual by reason of their employment. Learn more about the filing requirements.

Dividend Procedure

HMRC compliance practices mean that small companies paying dividends must take extra care to follow best practice procedures.

Pre 5 April Dividend Planning

There can be significant advantages to tax planning surrounding the timing of extracting dividends prior to 5 April each year.

Dividend Tax

Dividends are payments made by a company to its shareholders from post-tax profits. They are a common way for company owners and investors to receive income.