New Dividend Disclosure Rules For UK Resident Directors Of Close Companies in 2026
From the 2025/26 financial year, changes are coming to the way UK resident directors of close companies, report information in their Self-Assessment tax returns.
These updates, introduced by HMRC, designed to increase transparency around company ownership and dividend income, will place new administrative responsibilities on directors.
Here’s a summary of what’s changing, what it means for you, and how to prepare.
What’s changing?
If you’re a director who completes a Self-Assessment tax return, you’re likely already familiar with the SA102 form. Until now, this form has included optional questions about your directorship status and whether your company qualifies as a “close company.”
Close companies are broadly defined as one controlled by five or fewer individual participators, (such as shareholders or directors).
From April 2026, when submitting your return for the 2025/26 tax year, these disclosures will become mandatory.
What are the new mandatory reporting requirements?
Directors of close companies will now need to provide:
- Confirmation that they are a company director;
- Confirmation that the company is a close company;
- The name and registered number of the company;
- The total value of dividends received from the company;
- Their percentage shareholding during the tax year.
If your shareholding changed during the year, you’ll need to report the highest percentage held at any point in 2025/26.
Are there any penalties?
Since these new disclosures do not directly affect Income Tax or Capital Gains Tax liabilities, they fall outside the existing penalty framework.
To address this, HMRC has introduced a new fixed penalty of £60 for each instance of non-compliance.
This means:
- Each missing or incorrect piece of required information could trigger a penalty
- Multiple omissions could result in multiple £60 charges
Why the changes?
Although these disclosures won’t directly impact your tax bill, they provide HMRC with greater visibility into company structures, dividend flows, and ownership patterns. This aligns with a broader push toward improved tax transparency and compliance.
Preparing for the changes
For many directors, especially those with fluctuating shareholdings or multiple roles, gathering the required information may take extra effort.
To stay ahead:
- Keep detailed records of dividends received throughout the year;
- Track any changes in shareholding percentages;
- Ensure you have accurate company details readily available;
- Review your record-keeping processes to avoid last-minute issues.
Final thoughts
While the new rules may seem like a small administrative tweak, they represent a meaningful shift in reporting expectations for close company directors. Early preparation will be key to avoiding penalties and ensuring a smooth Self-Assessment process.
If you’re unsure how these changes affect your situation, get in touch with our team for help, and while you’re here why not follow the Cowgills LinkedIn page.
