2. June 2026

New HMRC Dividend Disclosure Requirements For Directors From 2025/26 Returns

The upcoming changes to HMRC dividend disclosure requirements are likely to catch many directors off guard. From the HMRC 2025/26 returns, reporting dividends will no longer be a simple total figure entered at the end of the year. Instead, HMRC is moving towards a more structured and transparent system - particularly for directors of smaller, owner-managed companies.

For many business owners, dividends are a routine part of income. However, under the new rules, how those dividends are reported - and linked back to specific companies - matters far more than before. This shift is not about increasing tax, but about tightening visibility. If your records are not aligned or clearly tracked, even small oversights could lead to penalties or unnecessary scrutiny. Understanding what’s changing now will make filing far more straightforward later.

What Are The New HMRC Rules For 2025/26 Returns?

From April 2025 onwards, HMRC requires directors to break down dividend income by company rather than reporting a single combined figure. This directly impacts how dividend reporting in the UK is handled for personal tax returns.

Instead of one total, you will now need to:

Report dividends separately for each close company
Link those figures to company-specific details
Ensure alignment with company accounts

This allows HMRC to cross-check your return more effectively against corporate filings.

Who Qualifies As A Close Company Director?

A close company is generally a UK-based limited company controlled by five or fewer shareholders. It also includes companies where all shareholders are directors.

In practice, this applies to:

Owner-managed businesses
Family-run companies
Small limited companies

If you are registered at Companies House as a director of such a business, you fall under the close company directors category for these rules.

What Information Must Directors Now Disclose?

The new reporting structure introduces additional fields within the employment pages of your tax return. Each directorship must now be recorded separately.

You will need to provide:

The company’s official registered name
Company Registration Number (CRN)
Dividends received from that company
Your highest shareholding percentage during the tax year

These details are mandatory and form part of HMRC’s enhanced verification process.

How Should Dividends Be Reported Under The New Rules?

The key change is separation. Dividends linked to close companies must now be reported independently, rather than grouped together.

For clarity:

Close company dividends → reported individually within employment pages
External dividends → still reported collectively on the main return

It’s also important to note that even if no dividends were taken, the directorship must still be declared.

How Do You Calculate Your Highest Shareholding Percentage?

This is one area where errors are likely if records are not maintained properly. HMRC requires the highest level of ownership held at any point during the tax year - not an average.

If your shareholding changed:

Identify the peak percentage reached
Report that figure, even if held briefly

For example, if your ownership increased from 30% to 60% before reducing again, you must report 60% as your highest holding.

What Are The Penalties For Non-Compliance?

Although these disclosures do not directly affect your tax bill, HMRC still enforces penalties for missing or incorrect entries.

£60 fine per missing or incorrect field
Applied per company and per omission
Multiple errors can quickly add up

This means even small reporting gaps can lead to avoidable costs.

How Can You Stay Compliant And Avoid Mistakes?

The safest approach is to treat this as a record-keeping issue rather than a year-end task.

A few practical steps:

Record dividends at the time they are declared
Keep shareholding records updated throughout the year
Review company details before filing
Do not overlook inactive directorships

Working this way reduces last-minute pressure and improves accuracy.

Conclusion

The revised HMRC dividend disclosure requirements for HMRC 2025/26 returns reflect a broader move towards transparency and data consistency. For close company directors, this means greater accountability in how dividend income is tracked and reported.

What often causes problems is not complexity, but assumption. Many directors continue using familiar methods without realising the reporting structure has changed. By the time discrepancies are identified, corrections - and penalties - can follow.

Taking a more structured approach now - keeping clear records, reviewing shareholding changes, and preparing for detailed disclosure - will make compliance far more manageable. Klair AccounTax works closely with directors to ensure reporting is accurate, timely, and aligned with HMRC expectations. If you want to avoid last-minute confusion and get it right from the outset, it’s worth putting the right processes in place now.

FAQs

Do These HMRC Dividend Rules Apply To All Company Directors?

No, they apply specifically to directors of close companies, typically small or owner-managed UK businesses.

Do I Need To Report Dividends If None Were Taken?

Yes, HMRC still requires disclosure of the directorship even where no dividend income was received.

What If My Shareholding Changed During The Year?

You must report the highest percentage held at any point during the tax year.

Can Errors In Dividend Reporting Lead To Penalties?

Yes, HMRC applies fixed penalties for missing or incorrect disclosures, even if tax liability is unaffected.