Close Company Reporting for Directors

From 6 April 2025 (for 2025/26 tax returns) it is necessary for company directors to declare additional information on the employment pages of their personal tax returns.

When a company is considered a close company, its directors are required to report:

• The name and registered number of the company.
• The amount of dividends received from the company, even if nil.
• The percentage of share capital held during the year, even if nil.

Broadly speaking, a close company is one which is controlled by five or fewer participators (often shareholders) or by any number of participators who are also directors.

Therefore, the new rules will impact most owner-managed and family-owned companies.

• The new rules do not result in all directors being obligated to file a tax return, but the requirement applies to directors who are already within self-assessment.
• Where an individual is a director of more than one company it is necessary to report a separate employment page for each company.
• The percentage shareholding should be calculated by reference to the nominal value of shares and should include other share types, for example preference, non voting and redeemable shares.
• If the share percentage changes in the year, the highest percentage owned during the year should be included.
• The dividends entered on the employment pages do not impact the tax position. This will be calculated on the dividends entered within dividend income.
• It is important to complete the required boxes even if the figures are nil.
• HMRC may issue penalties of £60 for failure to provide the required information.

There are a couple of areas where it is hoped that HMRC will supply further information later in the year.

Please do let a member of the team know if you have any questions.