Business owners face increased HMRC reporting obligations

By Mark Yellowlees, director at MHA in Edinburgh

Owner-managed businesses and company directors are being reminded that new HMRC reporting requirements apply from the 2025/26 tax year, increasing the amount of information that must be provided through Self Assessment tax returns.

The changes apply from the 2025/26 tax year and form part of HMRC’s wider efforts to improve transparency and reduce the tax gap.

The new requirements affect directors of close companies and are designed to provide HMRC with greater visibility of business income and ownership structures.

Directors of close companies will now be required to provide additional information through their tax returns, including the company name, company registration number, their percentage shareholding and details of dividend income received from the company during the tax year.

The changes reflect HMRC’s increasing focus on owner-managed businesses and its ability to cross-check information held across company and personal tax records. Business owners should ensure that company records, dividend documentation and shareholder information are accurate and up to date before completing their returns.

While the new requirements do not change how dividends are taxed, they do increase the level of information that must be disclosed to HMRC. As a result, directors may find that greater attention is needed when gathering information for year-end tax compliance.

Business owners who are unsure how the new reporting requirements affect them should seek professional advice. Taking time to understand the changes now can help avoid delays, errors and unnecessary correspondence with HMRC when completing future tax returns.

Mark Yellowlees is a director at accountancy firm MHA in Edinburgh and advises a broad range of owner-managed businesses across the real estate, healthcare and life sciences sectors.

For more information, visit MHA’s website www.mha.co.uk