New Dividend Reporting Requirements for Directors from 2025/26

Additional disclosures required on Self Assessment tax returns

HM Revenue & Customs (HMRC) is introducing new reporting requirements for company directors from the 2025/26 tax year, increasing the amount of information that must be disclosed on Self Assessment tax returns.

The changes are designed to give HMRC greater visibility over dividends paid by owner-managed businesses and close companies, an area that has attracted increasing scrutiny in recent years.

What Information Will Need to Be Reported?

Individuals who are required to complete a Self Assessment tax return and who have held a directorship during the tax year will need to provide additional details for each directorship.

The new employment pages will require disclosure of:

• Whether the company was a close company.

• The company's name and registration number.

• The amount of dividends received from the company during the tax year.

• The highest percentage shareholding held during the tax year.
  

This information will need to be reported separately for each directorship held.

What Is a Close Company?

A close company is broadly a company that is controlled by five or fewer shareholders, or by any number of shareholders who are also directors.

Many family-owned businesses and owner-managed companies fall within this definition, meaning the new reporting requirements are likely to affect a significant number of company directors.

Penalties for Non-Compliance

HMRC has confirmed that a penalty of up to £60 may apply where the required information is not provided on a tax return.

To avoid errors, it is important that directors keep accurate records of:

• All directorships held during the tax year.

• Dividend payments received.

• Changes in shareholdings and ownership percentages.

• Company registration details.

  
  

Why These Changes Matter

The introduction of these new reporting requirements reflects HMRC's ongoing focus on dividends paid by close companies and the tax treatment of owner-managed businesses.

As a result, it is more important than ever to ensure that dividend payments are properly documented and supported by the appropriate company records, including:

• Board meeting minutes.

• Dividend vouchers.

• Accurate accounting records.

• Evidence of sufficient distributable profits.
  

Robust dividend procedures can help reduce the risk of HMRC enquiries and demonstrate that payments have been made lawfully and in accordance with company law requirements.

How SJC Chartered Accountants Can Help

At SJC Chartered Accountants, we work closely with company directors and shareholders to ensure dividend payments are structured correctly, properly documented and reported accurately on Self Assessment tax returns.

Whether you need advice on dividend planning, company compliance, or your personal tax position, our experienced team is here to help.

If you are a company director and would like guidance on the new reporting requirements or your dividend procedures, please get in touch with us today.