Learn about Dividends & Dividend Tax
Dividends are the share of a company’s profits that it decides to pay to its shareholders. They are an important part of the return from investing in shares, in addition to any increase in the share price. Companies are under no obligation to pay dividends, but they usually choose to do so because dividends provide an incentive to invest in their shares.
You can elect to receive your dividends in cash. Please note, M&S no longer pays dividends by cheque, and you will therefore need to provide bank mandate details to receive dividend payments in cash. Alternatively, you can choose to reinvest your dividends, where your cash dividend is used to purchase additional shares.
Go to https://corporate.marksandspencer.com/investors/shareholder-centre/your-dividends for more information on when and how you can elect to have your M&S dividends paid.
Dividend and UK income tax
As dividend payments are another form of income, they are subject to income tax in the UK. However, you don't have to pay additional tax on dividend income that:
- a) falls within your income tax-free Personal Allowance, or
- b) is below the annual dividend allowance, or
- c) is received on shares within an ISA.
How much tax is paid on dividends above the dividend allowance depends on your income tax band.
Details of the current annual dividend allowance and dividend tax rates can be found on the HMRC website: Tax on dividends: How dividends are taxed - GOV.UK
The annual dividend allowance is:
| Tax Year | Dividend Allowance |
| 6 April 2026 to 5 April 2027 | £500 |
If you need to pay tax on your dividends exceeding the annual dividend allowance, you can tell HMRC by contacting their helpline, asking HMRC to change your tax code (the tax will be taken from your wages or pension), or adding information to your Self-Assessment tax return, if you already fill one in.
You don't need to tell HMRC if your dividends are within the dividend allowance for the tax year.
If you have any questions about the impact of the dividend tax changes on your financial position, you should seek independent financial advice.
Useful links
Tax on dividends - Check if you have to pay tax on dividends
Tax on dividends from shares in an ISA - How to report tax on dividends
General
The information contained in this dividend information guide in relation to tax is a general summary only of the likely tax consequences and is for guidance only. It is based on tax legislation and regulations for UK residents. If you are in any doubt about your own tax position, you should seek your own tax advice on the personal tax implications of your participation in the Plans.
