RE: Tax15 May 2021 14:21
Source: https://www.gov.uk/tax-on-dividends
Example
You get £3,000 in dividends and earn £29,570 in wages in the 2020 to 2021 tax year.
This gives you a total income of £32,570.
You have a Personal Allowance of £12,570. Take this off your total income to leave a taxable income of £20,000.
This is in the basic rate tax band, so you would pay:
20% tax on £17,000 of wages
no tax on £2,000 of dividends, because of the dividend allowance
7.5% tax on £1,000 of dividends
Calculate Total income.
Calculate Taxable income. (Minus Personal Allowance, if eligible, to find out the tax bands)
Calculate tax separately for each band income falls in. Same for interest/dividend income after deducting their respective allowances.
***Please DYOR and DD as usual.***