HMRC have changed the Self-Assessment tax return reporting information for directors of close companies. A close company is one that is owned by five or less shareholders. Up until now it has been unclear whether directors who are unpaid or who are not shareholders of a close company need to provide this information.

Additional reporting requirements for directors of close companies will come into force for Self-Assessment returns from 2026 onwards. You will need to report the following on your annual tax return:

• The names of any close company you hold shares in.
• The registered numbers for those close companies.
• The amount of income you receive from dividends from those companies in that tax year.
• The percentage of your shareholding.

Only close company directors who complete a Self-Assessment return need to report this information and the information must be provided, even if the company is only a close company for part of the tax year.

HMRC have said that even if directors are unpaid or have zero shareholdings in the close company, they must still complete the new boxes on their tax return. Directors of any dormant close companies must also complete this information. Directors of Registered Charities or Community Interest Companies do not need to complete the new boxes if they have not received any employment or dividend income.

HMRC have have said that a £60 penalty may apply if the boxes on the tax return for close companies are completed incorrectly.

If you need any help with any part of your tax return, then please get in touch, email info@kaizengroup.uk or telephone us on 01482 772261

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Companies House are warning directors to avoid prosecution

Directors are being warned to verify their identities with Companies House or risk prosecution after the Insolvency Service secured its first convictions for these offences.

Identity verification is an important part of the Economic Crime and Corporate Transparency Act 2023, which gave Companies House powers to improve the accuracy of the company register so it could tackle the misuse of UK companies for criminal purposes.

Existing directors are required to verify as they file the company’s next confirmation statement, helping to ensure that those who own and control businesses can be identified and held accountable. There is no option to opt out. Directors who continue to act without verifying their identity risk investigation and prosecution.

If you need help with Companies House documentation please contact us. email info@kaizengroup.uk or telephone us on 01482 772261

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