British firms are paying lesser dividends in the first quarter than the same period one year prior to this one.

UK companies paid out 13.6bn Pounds in dividends during the first three months of 2010. Heavyweights dropping their payouts were a chief factor in the drop, with bank HSBC cutting 670m Pounds, and oil giants BP and Shell paying out 330m Pounds less between them.

Shell's dollar-denominated payment was up by 5% last year, while BP's dividend was the same in dollars, but a stronger pound reduced the sterling payment.

Capita Registrars, a unit of Capita Group that provides share registration, has lowered its full-year prediction for UK dividends in 2010 to 59.2bn Pounds, which is up just by 1.3% from 2009. In January, it had forecasted 5% growth.

Capita Registrars have stated that it was the slowest yearly rate of decline, since the economic depression began and 186 companies paid a dividend between January and March, which was up from 161 a year ago.

However, it said that a number of special factors had jointly worked to limit the fall to 2.5%.

This included, Cadbury, paying a 133m Pound dividend in the month of February, the last one before it was taken over by Kraft Foods, and Unilever switching to quarterly dividends and paying out 240m Pounds in the first quarter.

Capita Registrars' Taylor also stated that some smaller firms may have brought forward their payments to the 2009/10 tax year, which ended on April 5, in order to beat a tax hike. On April 6, the UK rate of income tax for higher earners increased to 50% from 40%.

Payments from blue chips fell by 8% after adjusting for one-offs, while the midcaps paid out 2% more. The FTSE 100 yielded 4% in this quarter, whereas the FTSE 250 yielded 3.4%.