Directors' tax returns ask four new questions

If you run your own limited company and file a tax return, the one due by 31 January 2027 will ask you four things it has never asked before: your company's name, its registered number, the dividends it paid you and your percentage shareholding. HMRC's own estimate is that around 0.9 million directors of owner-managed companies are affected.

What the new boxes ask

The questions come from the Income Tax (Additional Information to be included in Returns) Regulations 2025, which apply to returns for the 2025/26 tax year onwards. They sit on the employment page of the return, the one a director completes for each directorship.

The page first asks whether you were a director during the year and whether the company was a close company. Those boxes used to be optional and are now required. Broadly, a close company is a UK company controlled by its directors or by five or fewer shareholders, and most family and one-person companies are. If the answer to both is yes, four new questions follow:

• The company's full name and its Companies House registration number, which the return treats as two questions.

• The dividends you received from that company in the year. Zero is an acceptable answer, and it has to be given.

• Your percentage shareholding. HMRC's notes ask for the highest percentage you held at any point in the year, worked out on the nominal value of the shares, not the figure on 5 April.

Leaving the information out can bring a fixed penalty of £60. That is small next to the £100 for filing late, but it is a separate charge, and it can apply to a return that arrives on time.

Why HMRC wants it

Until now a director's dividends from their own company went into the same box as dividends from a stocks and shares portfolio. HMRC could not tell them apart. Its explanatory memorandum says the new split will give it a better view of "the total package of remuneration" owner-managers take from their companies, and will help it focus "compliance activities". The figures on your return can now be set beside your company's own records. They should match.

Dividends usually decide whether you file

Being a director does not appear on gov.uk's list of reasons you must send a return. For most owner-managers the question is settled by dividends. Under HMRC's dividend reporting rules, dividends over £10,000 in a tax year mean a Self Assessment return. Below that, if you have tax to pay and do not otherwise file, you must tell HMRC by 5 October after the tax year, and it can collect the tax through your tax code. And if HMRC has sent you a notice to file, you must file, whatever your income.

Filling it in for one company

Illustration, not a real client. Two founders run a marketing company in Shoreditch. Kofi held 60 per cent of the shares until December 2025, when he gave 10 per cent to his wife. Ruth holds the other 40 per cent. In 2025/26, all before the December transfer, the company paid Kofi £24,000 in dividends and Ruth £16,000.

• Both must file, because each received more than £10,000 in dividends.

• Kofi enters 60, not 50, as his shareholding. It was his highest during the year.

• Ruth enters 40, and the same company name and number as Kofi.

• The new box is extra disclosure. The same dividends still go in the main dividends box on the return, alongside any from other shares.

Kofi's wife is now a shareholder but not a director. If she files a return, she answers no to the director question and stops there. If the company had a third director with no shares who files for another reason, that director would answer yes, yes, give the name and number, and enter zero twice.

What to gather now

None of this changes the tax you pay. It changes what you need in front of you on the day you file. For each company you were a director of between 6 April 2025 and 5 April 2026, find:

1. The registered name and eight-character company number, exactly as Companies House shows them.

2. The dividend vouchers or board minutes for every dividend paid to you in that year.

3. The register of members, so you know your highest shareholding and when it changed.

Our box-by-box guide to the new director questions covers the edge cases, and our checklist for the January return covers everything else the return needs.

The box I expect to cause the most trouble is the shareholding one, because a transfer to a spouse part-way through the year changes the answer, and the return wants the highest figure rather than the latest. Have the register open before you start, and the shareholding box stops being the hard one.

About the author

Harvey Dhillon is the founder and CEO of Zmartly, a UK accountancy firm for small businesses. He grew up in West London and began his career in investment banking finance at Barclays, before going full-time on Zmartly in 2020. He is a Chartered Management Accountant (ACMA, CGMA).

Featured photo by David Travis on Unsplash.