If you run your own limited company in Macclesfield, Bollington or anywhere else in Cheshire, the chances are your company is a close company. And from the 2025/26 tax year — with returns becoming available to file from April 2026 — HMRC is requiring significantly more information from you on your self-assessment tax return.
These changes have been described by ICAEW as causing "uncertainty" for taxpayers and advisers alike, and further HMRC guidance is still awaited on some of the finer points. This article sets out what we know now, what you need to disclose, and how to make sure you're ready.
What is a close company?
A close company is a UK-resident company that is controlled by five or fewer shareholders, or by any number of directors. In practice, the vast majority of owner-managed limited companies — the kind run by one or two people who are both directors and shareholders — are close companies.
If you are a director of your own limited company and you also hold shares in it, your company is almost certainly a close company. This means the new rules apply to you.
What was required before?
For several years, the employment pages of the self-assessment tax return (form SA102) included two optional questions:
- Are you a director of a company?
- Is that company a close company?
Many taxpayers left these blank, and HMRC had no formal mechanism to enforce completion. That has now changed.
What has changed from 2025/26?
Under powers introduced by Finance Act 2024 and brought into force through The Income Tax (Additional Information to be included in Returns) Regulations 2025, HMRC has made these disclosures mandatory and added significant new requirements for director-shareholders of close companies.
These requirements apply to the 2025/26 tax return — the return covering the year ended 5 April 2026. Filing opens from 6 April 2026, with the deadline of 31 January 2027 for online returns.
The new mandatory disclosures fall into two parts:
Part 1 — All company directors
Every taxpayer who is a company director during 2025/26 must now mandatorily confirm:
- That they were a director of a company during the tax year
- Whether that company is a close company
These questions were previously optional on form SA102. They are now compulsory.
Part 2 — Directors of close companies (additional disclosures)
Where the taxpayer is both a director and a shareholder in a close company, the following additional information must be included for each close company they are involved with:
| Required disclosure | Detail |
|---|---|
| Company name | The full registered name of the close company |
| Company registration number | The Companies House registration number |
| Dividends received | The value of dividends received from the close company during the year — reported separately from other UK dividends |
| Percentage shareholding | The taxpayer's percentage shareholding in the company during the year. Where the shareholding changed during the year, the highest percentage held at any point must be used |
If you are a 50% shareholder-director of your own limited company and you received £30,000 in dividends during 2025/26, your self-assessment return must now separately identify those dividends as coming from a named close company, include the company's registration number, and state your 50% shareholding. This is in addition to the dividend figures already appearing in your return.
Why is HMRC doing this?
HMRC's stated rationale is to improve data accuracy and transparency in the owner-managed business sector. The regulator has long considered close companies to present a higher risk of error — and sometimes deliberate non-compliance — particularly where the line between company income and personal income becomes blurred.
By requiring directors to separately identify dividends from their own companies (rather than having them grouped with other dividend income), HMRC will be able to cross-reference the individual's return against the company's corporation tax return and accounts. Any discrepancies will be easier to identify and could trigger compliance checks.
This is part of a broader trend towards increased HMRC data gathering, which also includes the Making Tax Digital rollout and a separate consultation — Reporting company payments to participators — which proposes additional reporting requirements for close companies at the corporate level.
Points of uncertainty
ICAEW has noted that some aspects of the new requirements are not entirely clear, and further HMRC guidance is expected. In particular:
- Multiple share classes — where a company has different classes of shares with differing rights to income and capital, it is not yet entirely clear how HMRC expects the shareholding percentage to be measured
- Multiple close companies — where an individual is a director-shareholder in more than one close company, a separate disclosure is required for each
- Dividend timing — dividends must be reported in the year they are received, which should align with existing practice but may cause complications where dividends are declared and paid in different tax years
We are monitoring HMRC's guidance updates closely and will keep clients informed of any developments.
What happens if you don't comply?
Failure to complete mandatory boxes on the self-assessment return — or providing inaccurate information — exposes taxpayers to HMRC's standard penalty regime. Penalties for inaccuracies range from 30% of the potential lost tax for careless errors up to 100% (or more for offshore matters) for deliberate non-compliance. Even where no additional tax is owed, failure to provide required information can result in fixed penalties.
Getting the return right first time has never been more important — and this is precisely where having a qualified accountant on your side makes a real difference.
What should you do now?
The 2025/26 tax year has now ended (5 April 2026) and returns can be filed from April 2026, with the deadline of 31 January 2027. Here's what we recommend:
- Confirm whether your company is a close company (almost certainly yes if you're a director-shareholder)
- Note your Companies House registration number — you'll need this for the return
- Keep a clear record of all dividends received from your company during 2025/26 — the date, amount, and whether they were interim or final dividends
- Record your shareholding percentage — and if it changed during the year, note the highest percentage held
- If you are involved in multiple companies, gather this information for each one separately
- Contact us early — the more notice we have, the smoother the process
Director of a limited company in Macclesfield or Cheshire?
We're already preparing for these changes on behalf of our clients. If you'd like us to handle your 2025/26 self-assessment return — including the new close company disclosures — book a free call and we'll talk you through it.
Book a free 30-minute call →How JAC Accountancy Solutions can help
As director-shareholders ourselves, Jeff and Rhian understand exactly what these changes mean in practice. We are already factoring the new disclosure requirements into our self-assessment process for all director clients, and we will ensure your return is completed accurately, on time, and in full compliance with the new rules.
Our self-assessment service for directors includes:
- Reviewing your dividend records and ensuring correct allocation to close company vs other dividends
- Completing all new mandatory disclosures on form SA102
- Identifying the most tax-efficient structure for your remuneration going forward
- Liaising with HMRC on your behalf if any queries arise
- Fixed fee agreed in advance — no surprises
This article is for general guidance only and does not constitute professional tax advice. The rules described are based on legislation and HMRC guidance current as of May 2026; further HMRC guidance is anticipated and we will update this article accordingly. Please contact us to discuss your specific situation. JAC Accountancy Solutions Limited is regulated by ICAEW (Membership No. 8650147).