By Farhan Nagda FCCA MBA
For owner-managed companies, the 2025/26 personal tax return asks for more than a single figure for dividend income. Directors of close companies who file Self Assessment must now provide further information about their directorship and shareholding. This is a reporting change, not a new tax on dividends, but it makes the reconciliation between personal and company records more important.
Who needs to check?
The requirement concerns people who are required to file a Self Assessment return and were directors of close companies during the 2025/26 tax year. A close company is broadly one controlled by five or fewer participators, or by participators who are directors. Many family and owner-managed businesses, including property companies, fit that description. Being a director alone does not automatically mean a tax return is required; that question must be considered separately.
What information is needed?
For each relevant close-company directorship, prepare the company name and registered number, the dividend income received from that company during the tax year and the highest percentage of its share capital held during the year. A director with several companies should not assume one company’s records cover the others. Unpaid directorships and changes in shareholdings also deserve a check.
The practical issue: records that do not agree
The personal return, dividend vouchers, board minutes, share register and company accounts should tell a consistent story. For example, if a director’s shareholding changed during the year, the year-end percentage may not be the highest percentage the return asks for. Likewise, a payment described informally as a dividend may require review against the company’s actual declaration and available distributable profits. The correct treatment depends on the facts; changing a bookkeeping label is not a substitute for examining the underlying transaction.
Before filing, review these points
- List every company directorship held during 2025/26 and identify which companies were close companies.
- Reconcile dividend vouchers and bank receipts with company records and personal tax figures.
- Check share changes during the year, including family transfers and different share classes.
- Separate dividends from salary, benefits and director’s loan account movements.
- Confirm whether a Self Assessment return is required; the new disclosure does not itself create that obligation.
The 2025/26 online Self Assessment filing and payment deadline is 31 January 2027. Directors who intend to file on paper face an earlier deadline. The best time to resolve discrepancies is before submission, when the personal and company records can be reviewed together.
How Edge can help
Edge Accountants can review the company’s records alongside the director’s personal tax position, identify mismatches and prepare the relevant returns. If dividends, share changes or loan-account movements are unclear, we can assess the facts before figures are reported to HMRC. Speak to Edge about accountancy and tax advice, call 02477 45 5333, or use the Book free 30-min consultation button.
This article is general information, not advice for a particular company or director. Reporting and tax treatment depend on the company’s structure and transactions.
