New HMRC reporting requirements for directors of close companies: what’s changed?

Many owner-managed businesses are accustomed to reporting dividend income on their personal tax returns with relatively little detail about the companies from which it arises. From the 2025/26 tax year, however, HMRC now requires directors of ‘close’ companies who also own shares in those companies to disclose significantly more information on their tax returns.

If you own and run your own company, these changes are likely to affect you.

What is a close company?

A close company is broadly a UK-resident company controlled by five or fewer participators (for example, shareholders) or controlled by any number of participators who are also directors.

In practice, most owner-managed and family companies are close companies.

What’s changing?

Previously, you were only required to confirm whether you were a director of a close company and complete the supplementary employment income pages of your personal tax return.

From the 2025/26 tax year, additional information may need to be disclosed, including:

• The name of each close company you have an interest in.
• Your percentage shareholding in each close company.
• The dividends you received from each close company during the tax year.
• The close company’s registration number on the Companies House register.

Why is HMRC asking for more information?

Close companies have long been an area of interest for HMRC because they are commonly used by owner-managed businesses, where individuals have significant control over the timing and nature of remuneration, dividends and other benefits.

The additional disclosures form part of HMRC’s wider strategy to improve the quality of information submitted through Self-Assessment and to better understand the relationship between shareholders, directors and the income they receive from close companies.

The additional disclosures are likely to improve HMRC’s ability to cross-check information between personal tax returns, company accounts and Companies House records.

Providing complete and accurate information will help ensure your tax return is processed correctly and reduce the likelihood of unnecessary enquiries.

The new reporting requirements do not change the amount of tax you pay, but they do represent another step in HMRC’s drive towards greater transparency and data collection.

For most owner-managed businesses, compliance may be relatively straightforward provided accurate records are maintained throughout the year. However, where ownership structures are more complex, involve family members, or have changed during the year, advice may help ensure the correct information is reported.

What should you do now?

Maintaining accurate records throughout the year, and having them readily available, will make compliance significantly easier.

You should retain details of:

• Your shareholding percentage.
• Any changes to your ownership during the year.
• Dividends legally declared and paid in the relevant tax year.
• Company records and evidence that support these facts.

How can we help?

As part of our annual tax return compliance service, our personal tax team can help you understand whether these new reporting requirements apply to you, review the information required for disclosure, provide advice where ownership has changed during the year and ensure your personal tax return includes all the required information.

If you would like to discuss how these new reporting requirements affect you, or need assistance with your personal tax return, please speak to your usual adviser or contact a member of our private client tax team.