Close company director-shareholders – additional complexities for your 2025/26 tax return

For the 2025/26 tax year, HMRC is placing increased focus on dividend income and shareholdings reporting for those that hold shares in close companies.

With plans afoot for HMRC to consult on the reporting of close company payments to shareholders, close company shareholders will need more support with their taxes and reporting to HMRC going forward.

Increased HMRC Focus on Directors and Shareholders

It is important that director-shareholders consider:

Dividend income
Shareholdings in close companies
Director’s loan accounts
Share transfers or changes in ownership
Capital distributions and gains

HMRC can compare your personal tax return with company accounts, payroll submissions, and Companies House records, meaning inconsistencies are more likely to be identified, particularly with the rise of AI.

Dividends Are More Complex Than Many Realise

With reduced dividend allowances and changing tax thresholds, many directors are paying more tax on dividend income than in previous years.

Common mistakes include:

Incorrect dividend figures
Missing dividend income
Errors between company accounts and personal tax returns
Incorrect allocation of dividends between spouses or shareholders

Even accidental errors can result in HMRC enquiries.

Why Professional Tax Advice Matters

Using our specialist tax team helps ensure your tax return is accurate, compliant, and tax-efficient.

We help directors and shareholders:

Structure salary and dividends efficiently
Review director loan accounts
Ensure dividend reporting is correct
Identify potential HMRC risk areas
Reduce the risk of penalties and enquiries

As tax reporting becomes more complex, our professional advice can save significant time, stress, and potentially unnecessary tax costs.

Speak to Our Tax Team

If you are a company director or shareholder currently completing your own tax return, now is the ideal time to review whether you are reporting everything correctly for 2025/26.

Our tax specialists can help you stay compliant, minimise risk, and ensure your tax affairs are handled efficiently.

As ever, if you have any queries, please give us a call.