Changes to Self Assessment reporting for directors

HMRC have clarified the position on Self Assessment tax return reporting requirements for directors of close companies and updated their guidance for directors of charities.

A close company is a company that is owned or controlled by a small number of people, usually five or fewer shareholders.

New requirements

Additional reporting requirements for directors of close companies came into force for Self Assessment returns from 2025-26 onwards. Those who are affected now need to report the following on their tax return:

• The name of the close company.
• The registered number of the close company.
• The amount of income they receive from dividends from that company in that tax year.
• The percentage of their shareholding.

Only close company directors who are currently required to complete a Self Assessment return need to report this information. However, the information must be provided even if the company is only a close company for part of the tax year.

Up until now it has been unclear whether directors who are unpaid or who are not shareholders of the company need to provide this information, and HMRC have now addressed this.

What have HMRC said?

HMRC have confirmed that when directors are unpaid and/or have zero shareholdings in the close company, they must still complete the new boxes on the tax return. Directors of dormant close companies must also complete the new boxes.

Where no dividend income has been received, or there is no shareholding, '0' will need to be entered in the appropriate boxes.

However, directors of registered charities or Community Interest Companies do not need to complete the new boxes if they have not received, nor become entitled to receive, any employment income or dividend income. This includes any other type of distribution from that company or any connected company. 

HMRC have highlighted that a £60 penalty may apply if the boxes on the tax return that are related to close companies are completed incorrectly.

If you need any help with completing your tax return, or are unsure whether these requirements apply to you, please get in touch. We’d be happy to help you.