{"id":3479,"date":"2026-03-25T10:43:07","date_gmt":"2026-03-25T10:43:07","guid":{"rendered":"https:\/\/www.robbtax.co.uk\/blog\/?p=3479"},"modified":"2026-03-25T10:43:24","modified_gmt":"2026-03-25T10:43:24","slug":"are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026","status":"publish","type":"post","link":"https:\/\/www.robbtax.co.uk\/blog\/are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026\/","title":{"rendered":"Are you paying yourself as tax efficiently as possible in 2026?"},"content":{"rendered":"

Not everyone has the freedom to decide how they are paid or to structure their income in the most tax-efficient way.<\/p>\n

<\/p>\n

So, if you do run your own limited company and have this luxury, you need to make sure you are getting it right.<\/p>\n

Most directors choose to pay themselves through a mix of a salary and dividends.<\/p>\n

With dividend rates going up and Income Tax thresholds frozen until 2031, it might be a good time to review whether your structure is still working efficiently.<\/p>\n

What are the benefits of paying yourself with a salary?<\/strong><\/h3>\n

Salaries are not just a monthly payment that goes into your bank account.<\/p>\n

They can be deducted as a business expense, reduce Corporation Tax liabilities and help maintain National Insurance records for State Pension purposes.<\/p>\n

Many directors choose a salary based around key thresholds, such as \u00a36,500 to secure National Insurance credits or \u00a312,570 to fully utilise the Personal Allowance without triggering Income Tax.<\/p>\n

If your earnings do go above the Personal Allowance, then these Income Tax Rates will apply:<\/p>\n\n\n\n\n\n
Basic rate<\/td>\n20\u00a0per cent<\/td>\nOn earnings from\u00a0\u00a312,571 to \u00a350,270<\/td>\n<\/tr>\n
Higher rate<\/td>\n40\u00a0per cent<\/td>\nOn earnings from \u00a350,271 to \u00a3125,140<\/td>\n<\/tr>\n
Additional\u00a0rate<\/td>\n45\u00a0per cent<\/td>\nOn earnings over \u00a3125,140<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Also, if your salary goes above certain levels, it can lead to employee and employer National Insurance contributions and this will increase the overall costs to your business.<\/p>\n

How is taking dividends more tax-efficient? <\/strong><\/h3>\n

Dividends are a big part of a director\u2019s income and these rates are going up in the 2026\/27 tax year.<\/p>\n

From April 2026, the new dividend tax rates are:<\/p>\n\n\n\n\n\n
Basic rate<\/td>\n10.75 per cent<\/td>\nOn earnings from\u00a0\u00a312,571 to \u00a350,270<\/td>\n<\/tr>\n
Higher rate<\/td>\n35.75 per cent<\/td>\nOn earnings from \u00a350,271 to \u00a3125,140<\/td>\n<\/tr>\n
Additional\u00a0rate<\/td>\n39.35 per cent<\/td>\nOn earnings over \u00a3125,140<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Even though these rates are going up, it is still more tax-efficient to take dividends alongside a salary than just taking a salary on its own.<\/p>\n

This is mainly because dividends are not subject to National Insurance and the tax rates are significantly lower than those for Income Tax.<\/p>\n

However, they can only be paid from retained profits after Corporation Tax, so your company must be performing well enough to support this.<\/p>\n

You also need to ensure that you are declaring your dividends properly with the right documentation and reporting them through your Self-Assessment tax return.<\/p>\n

How can we support you?<\/strong><\/h3>\n

There is no perfect structure that works for all directors and finding that balance can feel stressful, especially with changing rates being added to the mix.<\/p>\n

Our professional team are here to support you by reviewing your salary and dividend strategies and ensuring your income is structured as efficiently as possible.<\/p>\n

We will also assess that you are declaring your pay properly, so you can continue to reap the rewards and not stress about any compliance issues arising.<\/p>\n

For further advice on dividends and paying yourself, contact our team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Not everyone has the freedom to decide how they are paid or to structure their income in the most tax-efficient way.<\/p>\n","protected":false},"author":1,"featured_media":3463,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,89],"tags":[],"yoast_head":"\nAre you paying yourself as tax efficiently as possible in 2026? - Accountants in Sutton Coldfield<\/title>\n<meta name=\"description\" content=\"Robb & Co is an independent firm of chartered accountants and specialist tax advisors based in Sutton Coldfield, West Midlands.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.robbtax.co.uk\/blog\/are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are you paying yourself as tax efficiently as possible in 2026?\" \/>\n<meta property=\"og:description\" content=\"Not everyone has the freedom to decide how they are paid or to structure their income in the most tax-efficient way.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.robbtax.co.uk\/blog\/are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026\/\" \/>\n<meta property=\"og:site_name\" content=\"Accountants in Sutton Coldfield\" \/>\n<meta property=\"article:published_time\" content=\"2026-03-25T10:43:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-25T10:43:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.robbtax.co.uk\/blog\/wp-content\/uploads\/2026\/03\/shutterstock_2402511981-1024x731.jpg\" \/>\n<meta name=\"author\" content=\"Robb & Co Chartered Accountants in Sutton Coldfield\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Are you paying yourself as tax efficiently as possible in 2026?\" \/>\n<meta name=\"twitter:description\" content=\"Not everyone has the freedom to decide how they are paid or to structure their income in the most tax-efficient way.\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Robb & Co Chartered Accountants in Sutton Coldfield\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.robbtax.co.uk\/blog\/are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026\/\",\"url\":\"https:\/\/www.robbtax.co.uk\/blog\/are-you-paying-yourself-as-tax-efficiently-as-possible-in-2026\/\",\"name\":\"Are you paying yourself as tax efficiently as possible in 2026? 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