New Self Assessment reporting rules for Directors: What you need to know for 2025/26
There are important changes that company directors should be aware of for the 2025/26 tax return season.
These changes introduce new reporting obligations, particularly around dividends and shareholdings.
Background: HMRC’s shift in focus
In recent years, HMRC has aimed to reduce the number of individuals required to submit Self Assessment Tax Returns (SATRs). However, for those who still fall within the filing requirement, the level of detail expected is increasing, especially for directors of UK companies.
What’s changing for Directors?
Starting from the 2025/26 tax year, directors of close companies, typically small or family run UK businesses controlled by five or fewer individuals, will face mandatory reporting requirements in their SATRs. These include:
- Company name and registration number
- Total dividends received from the close company, reported separately from other UK dividend income
- Highest percentage shareholding held during the year, even if the holding changed over time
Previously, the SATR’s employment pages included optional questions about directorship and close company status. From 2025/26 onwards, these fields must be completed.
Additional reporting for business start/end dates
If a business begins or ceases during the tax year, taxpayers will now be required to report the start and/or end dates. This applies not only to individual SATRs but also to trust and partnership tax returns.
It’s important to note that these changes do not alter who must file a tax return, they simply expand the information that must be disclosed.
New penalties for missing information
To enforce compliance, HMRC has introduced a new penalty of £60 per omission for failing to provide the required additional information. The penalty applies to SATRs from 2025-26 onwards and is relevant to individuals, trusts and partnerships.
As these disclosures do not directly affect income tax or capital gains tax liabilities, they fall outside HMRC’s existing penalty framework, hence the need for a new penalty structure.
Potential challenges and uncertainty
Some of the new requirements may be difficult to interpret.
For example, calculating shareholding percentages could be complex where companies have multiple share classes with varying rights to income or capital. HMRC has yet to clarify how such scenarios should be handled.
Given the risk of penalties and the complexity of some disclosures, further guidance from HMRC would be welcome, ideally well before the 2025-26 filing window opens on 6 April 2026.
At Botham Accounting, we’re here to help you navigate these changes confidently. If you’re a director of a UK company and unsure how these updates affect you, please get in touch with our team for tailored advice and support.
