Welcome to our June newsletter. In this edition we look at a range of important tax and business developments that could affect both individuals and companies.
We explain how dividend income is taxed and highlight valuable Inheritance Tax gifting exemptions that may help with estate planning and include a reminder of key tax deadlines for the months ahead.
Alongside our technical updates, we include insight from our Corporate Finance team on “Strategic Exit Planning”, key highlights from our Knowledge Hub, and updates from across The MGroup and the wider business community
How dividends are taxed
Dividends are taxed differently from other types of income, with separate allowances and tax rates that
depend on your overall level of income.
You do not pay tax on dividends that fall within your Personal Allowance (2026-27: £12,570), and there is also a separate tax-free dividend allowance of £500 each year.
Any dividend income above these allowances is taxable. The rate of tax you pay on dividends depends on your Income Tax band. `For the 2026–27 tax year, the rates are:
- Basic rate: 10.75%
- Higher rate: 35.75%
- Additional rate: 39.35%
To determine which rate applies, your dividend income is added to your other income.
This means dividends can push you into a higher tax band and / or can be taxed across more than one rate.
If you receive up to £10,000 in dividends you can ask HMRC to change your tax code and the tax due will be taken from your wages or pension, or you can enter the dividends on your self assessment tax return, if you already fill one in.
You do not need to notify HMRC if the dividends you receive are within your dividend allowance for the tax year.
If you have received over £10,000 in dividends, you will need to complete a self-assessment tax return. If you do not usually send a tax return, you need to register by 5 October following the tax year in which you received the relevant dividend income.
Click HERE for full details GOV.UK provides a helpful guide
Tax-free gifts for Inheritance Tax purposes
Making gifts during your lifetime can be an effective way to reduce the value of your estate for Inheritance Tax (IHT) purposes.
One of the most commonly used exemptions is the annual exemption. This allows an individual to give away up to £3,000 each tax year without the gift forming part of their estate for IHT purposes.
If the exemption is not used in full, any unused amount can be carried forward to the following tax year, although only for one year.
This means that someone who made no qualifying gifts in 2025-26 could potentially give away up to £6,000 in 2026-27 free of IHT. There is also a useful exemption for small gifts. You can give as many gifts of up to £250 per person each tax year as you wish, provided no other exemption has been used for the same individual. This is known as the small gift allowance.
Special rules apply to wedding and civil partnership gifts. Parents can give up to £5,000 to a child tax-free, grandparents and great-grandparents can give up to £2,500, and anyone else can give up to £1,000. In many cases these exemptions can be combined with the annual exemption.
Another valuable relief covers gifts made out of surplus income. There is no fixed monetary limit, but the gifts must form part of normal expenditure, be made out of income rather than capital, and leave the donor with enough income to maintain their usual
standard of living. This exemption can be very useful for individuals with excess pension or investment income who wish to help children or grandchildren on a regular basis. Keeping clear records is important, as HMRC may ask for evidence that the conditions have been met.
Gifts between spouses or civil partners are generally exempt from IHT, provided both parties are permanently domiciled in the UK.
Gifts to charities are also normally exempt.
From our Knowledge Hub
Here we discuss the key updates from May, highlighting important changes and reminders that individuals and businesses should be aware of now the new tax year is fully under way.
From compliance updates and reporting obligations to areas where early planning can make a difference, it provides a concise overview of what has changed and what to keep on your radar over the months ahead.
Keep up to date with all our news HERE
Business cash reserves under pressure
Many businesses are finding that, despite steady sales, cash reserves are coming under
increasing pressure from rising costs and tighter margins. This article highlights the key drivers behind this trend and sets out practical steps businesses can take to protect cash flow and maintain financial resilience.
Click HERE for the full article
Strategic exit planning
Our Corporate Finance Team explored how effective exit planning can make a significant difference to the value achieved on a sale. This article outlines the key areas compliance business owners should focus on, highlighting how early, structured preparation can help maximise value and support a smoother, more successful transaction.
Click HERE for the full article
Chancellor seeks support from retail banks
This article looks at the government’s increasing focus on retail banks to support economic growth, and what this may mean in practice for businesses and individuals. It highlights why strong financial planning and engagement with lenders will remain key as opportunities and expectations evolve.
Click HERE for the full article
Life at The MGroup
Debra Charity Cup
We had a fantastic day at the Three Horseshoes & DEBRA Charity Cup at the MGroup Stadium, bringing together supporters, local businesses and celebrity footballers in support of the incredible work of DEBRA UK. Congratulations to the DEBRA Legends on their well‑deserved win, and a big thank you to Oxford City for hosting and the Velocity Suite team for their excellent hospitality.
Events like this highlight the strength of the local community and the impact that can be made when people come together.
Oxford City Business Tournament
We’re looking forward to hosting the Oxford City Business Tournament at the MGroup Stadium on 2nd July. The event brings together local businesses for an evening of football, networking and community, and remains a great opportunity to connect while supporting the wider Oxfordshire business community.
Tax Diary June/July 2026
June 2026 – Due date for corporation tax due for the year ended 31 August 2025.
19 June 2026 – PAYE and NIC deductions due for month ended 5 June 2026. (If you pay your tax electronically the due date is 22 June 2026).
19 June 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 June 2026.
19 June 2026 – CIS tax deducted for the month ended 5 June 2026 is payable by today.
1 July 2026 – Due date for corporation tax due for the year ended 30 September 2025.
6 July 2026 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.
19 July 2026 – Pay Class 1A NICs (by the 22 July 2026 if paid electronically).
19 July 2026 – PAYE and NIC deductions due for month ended 5 July 2026. (If you pay your tax electronically the due date is 22 July 2026).
19 July 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 July 2026.
19 July 2026 – CIS tax deducted for the month ended
5 July 2026 is payable by today.
Looking ahead
As we move further into the new tax year, staying informed and planning ahead continues to be important for both individuals and businesses.
If you would like to discuss any of the topics covered, or talk through your plans for the year ahead, our team is always happy to help.