Number of people paying dividend tax doubles

Nearly four million people are expected to pay dividend tax this year, with one in five higher rate taxpayers caught in the net as the tax-free allowance is whittled down

The gradual erosion of the exemption allowance from £5,000 less than a decade ago to only £500 for the current tax year means that the number of those hit by the tax has more than doubled since 2021-22.

Successive cuts have hit investors and small company directors, as various chancellors have targeted these earnings, while shareholders with minimal holdings are now ever more likely to be dragged into the tax. 

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