HMRC has introduced new reporting requirements for directors of close companies, including the disclosure of dividend income and shareholding information in the employment section of the Self Assessment return relating to the directorship.
The changes are intended to help HMRC cross-check information reported on company and individual tax returns.
However, this means that greater care is required when completing Self Assessment returns, particularly where a director has multiple directorships, holds shares in companies we do not act for, or has received no salary or dividends.
Key points from HMRC
HMRC has recently published FAQs clarifying how the new requirements should be applied. The key points are:
- Unpaid directors and directors with no shareholding in a close company must still complete the new boxes on their tax return.
- Where a director has received no dividend income, or has no shareholding, ‘0’ should be entered in the relevant boxes.
- HMRC has confirmed that listing an unpaid directorship solely in the additional information box is not sufficient.
- Directors of dormant close companies must also complete the new boxes.
- Directors of registered charities or Community Interest Companies (CICs) do not need to complete the new boxes where they did not receive, or become entitled to receive, any employment income or dividend income.
HMRC has also highlighted that a £60 penalty may apply for incorrect completion of the close company boxes.
What is a close company?
Broadly, a close company is a UK limited company controlled by five or fewer ‘participators’ (such as shareholders or directors), or by any number of participators who are also directors.
As a result, many small, family-owned and owner-managed private limited companies fall within the close company rules.
What do you need to do?
As your tax advisers, we need to ensure we have complete information about all your directorships to accurately complete these new sections of your Self Assessment return.
If you are a company director, please ensure that when completing our Self Assessment Questionnaire, you provide details of all companies in which you are a director, including:
- companies that we do not act for;
- dormant companies;
- companies where you have no shareholding;
- companies where you have not received a salary; and
- companies where you have not received any dividends.
Providing complete information will help us ensure that your Self Assessment return is prepared correctly and that the new HMRC requirements are properly addressed.
Already filed your 2025–26 Self Assessment?
If we have already prepared and filed your 2025–26 Self Assessment tax return, please take a moment to consider whether you have any additional directorships or information that may not have been included.
If you are unsure whether the new requirements apply to you, or believe anything may have been omitted, please contact us as soon as possible so we can review your return and advise you accordingly.
Ammad provides personal taxation planning, advisory and compliance services.
