New tax return requirements for company directors
Company directors who complete a self-assessment tax return should be aware of new mandatory reporting requirements that came into effect from the 2025-26 tax year. The changes mainly affect directors of close companies, including many owner-managed and family businesses.
Previously, directors could voluntarily identify themselves as directors of close companies on the employment pages (SA102) of their tax returns. The new requirements make this information mandatory and introduce additional disclosures to help HMRC identify income received from companies controlled by their directors.
Affected directors must provide the name and registered number of the close company, the amount of dividends received from the close company during the tax year, and the highest percentage of the close company’s share capital held during the relevant tax year.
A close company is broadly one controlled by five or fewer participators, or by participators who are directors. A participator is someone with an interest in the company’s capital or income, usually a shareholder.
The changes are intended to give HMRC a clearer picture of the relationship between directors and their companies, particularly where individuals receive dividends from businesses they own or control.
Importantly, the new rules do not mean that every company director must submit a tax return. Directors who are not otherwise required to file a self-assessment return do not have to register solely to provide this additional information.
Directors who already file returns should ensure they have the relevant company details, dividend figures and shareholding information available when preparing their 2025-26 return which is due to be submitted by 31 January 2027 at the latest.
