As new reporting requirements for directors in close companies take effect, are there more to come?
As we enter a new tax year, HMRC have released the self-assessment tax return pages for the 2025/26 tax year. Additional boxes have been included in the SA102 Employment pages which are completed by employees and directors.
The additional information is under new requirements in The Income Tax (Additional Information to be included in Returns) Regulations 2025, which require directors in close companies to report more detailed information relating to their shareholdings and any dividend income they receive from those companies.
Additional information to be reported
Previously a director was only required to disclose in box 7 of the SA102 if the company is a close company. From 2025/26 onwards, they will also need to disclose the following information in the SA102 pages:
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the name of the close company in box 7.1;
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the company registration number in box 7.2;
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the amount of the dividend income (even if this is zero) reported on box 4 of page TR3 on the SA100 (main tax return) that was received from the close company in box 7.3;
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the total percentage of the share capital owned in the company in box 7.4 (even if this is zero)
This information is needed for each close company that the taxpayer is a director of during the tax year.
Whilst HMRC have an established position of not requiring an SA102 page to be completed for directorships where no salary or benefits in kind are received, it is likely that the SA102 will now need to be completed in those cases.
What is meant by a close company
A close company that is controlled by five or fewer participators or by any number of participators who are also directors. A company might also be a close company if more than 50% of the assets on a winding up would be distributed to five or fewer participators (or participators who are directors).
The term 'participator' is used to describe the shareholders and others with a financial interest in the company. This includes:
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a person who has, or is entitled to acquire, share capital or voting rights in the company;
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a loan creditor of the company;
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a person with a right to receive or participate in distributions of the company or any amounts payable by the company (in cash or in kind) to loan creditors by way of premium on redemption;
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a person entitled to acquire such a right;
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a person entitled to secure that income or assets (whether present or future) of the company will be applied directly or indirectly for the person's benefit
Potential additional reporting requirements for close companies
As well as the new reporting requirements in directors' self-assessment tax returns, HMRC have published a consultation on reporting company payments to participators in close companies.
The proposed additional reporting requirements would see close companies being required to provide HMRC with details of transactions between the company and its participators. This could include cash withdrawals, loans, debts, dividends, other distributions, and transfers of assets to and from the company. But it is unlikely to include employment income reported under PAYE.
It is expected that HMRC will need to be notified of the recipient, amount and date of each transaction, regardless of whether the transaction is with individual or corporate shareholders. Details of the address and National Insurance number of individual shareholders may also be required.
The proposals, if implemented, could have a significant impact on our members in practice who support owner managed business clients. If you have any views or comments on the consultation, please email [email protected] on or before 24 May 2026.