If you are a director of a limited company in the UK, there is an important change to your Self Assessment tax return this year that you need to know about. HMRC has updated the 2025/26 return to include new mandatory boxes specifically for directors of close companies, and getting it wrong could result in a penalty.
Here is everything you need to know.
What Is a Close Company?
A company is a close company if it is controlled by five or fewer participators, or by any number of participators who are also directors. In practice, this covers the vast majority of owner-managed and family-run businesses in the UK. If you run your own limited company, there is a good chance these new rules apply to you.
What Has Changed?
Previously, a director was only required to tick a box on the SA102 employment page to confirm they were a director and whether the company was a close company. That was it.
From the 2025/26 tax year onwards, that is no longer enough. Directors of close companies now need to complete a separate employment page for each directorship on their Self Assessment return, even where no salary, dividends or other income have been received.
For each directorship, you will need to provide:
- Whether the company is a close company
- The company’s name and Companies House registration number
- The amount of dividends you received from the company during the tax year (even if this is zero)
- The highest percentage of shares you held at any point during the tax year
What Happens If You Do Not Report It?
HMRC has introduced a new penalty of £60 per omission for failing to provide the required information, applying to Self Assessment returns from 2025/26 onwards. It is worth noting that a white space disclosure listing directorships will not suffice as a workaround. Each directorship needs its own completed employment page.
Why Is HMRC Doing This?
This is not a routine admin update. It is a deliberate push by HMRC to join the dots between ownership, control and profit extraction. HMRC has made no secret of the fact that it considers small businesses to be a significant source of the UK tax gap, and close company dividends are firmly in its sights. Alongside these new return requirements, HMRC has also published a consultation on additional reporting requirements for close companies themselves, which could see companies required to report details of transactions between the business and its shareholders, including loans, dividends, cash withdrawals and asset transfers.
In short, scrutiny of close company dividend arrangements is only going to increase.
What Should You Do Now?
The most important thing is to make sure you have told your accountant about every directorship you hold, including any where you received no income during the year. Beyond that, now is a good time to review whether your dividend procedures are properly documented, commercially justified and fully compliant.
At A&C Chartered Accountants, we work with directors and owner-managed businesses across Manchester to make sure their Self Assessment returns are accurate, complete and submitted on time. If you would like help navigating the new reporting requirements or want to sense-check your dividend procedures, we would love to hear from you.
Book a free consultation today
This article is based on HMRC guidance current as of June 2026. Tax rules can change. Please speak to a qualified accountant before making decisions based on this content.