If you’re running a business, you’ll know that reporting requirements never really stand still. New tax return rules are coming, and here’s what it means for you.
From the 2025/26 tax year, HM Revenue & Customs (HMRC) is asking for more detail in your Self-Assessment tax return. This is the tax return that is due between now and next January.
On the face of it, the changes don’t look dramatic, but in practice, they will affect how you gather and report information each year.
And for many small business owners, especially those juggling multiple responsibilities, it could feel like one more thing to manage.
What’s Actually Changing?
From 6 April 2025 onwards, the tax return you complete for 2025/26 will require additional information that was previously optional and, in some cases, entirely new.
The changes affect two groups:
- Self‑employed people (sole traders and partnerships)
- Directors of close companies (which most small, owner‑managed companies fall into)
Importantly, this doesn’t change whether you need to submit a tax return it just increases the level of detail required.
If You’re Self‑Employed — One Key Change
If you start or stop a business during the year, you must now include the exact start or end date in your tax return.
Before, this question was often optional. Now, it is mandatory.
It might seem like a small detail, but it means:
- You need to keep accurate records
- You need to be clear on when trading actually began or ceased
- You can’t skip this section anymore
If You’re a Company Director — There’s More to Do
This is where the bigger changes sit.
If you’re a director of a close company, you’ll need to provide more information than before. A close company is one that is controlled by fewer than 5 people.
From 2025/26 onwards, you must include:
- The name of your company (box 7.1)
- The company registration number (box 7.2)
- The dividends you received from that company (box7.3)
- Your percentage shareholding in that company (box 7.4)
If your shareholding changed during the year, you’ll need to report the highest percentage you held at any point.
This is fresh territory for many business owners, especially those who have previously just reported total dividend income without breaking it down. So you’ll need to stop and think about this information before you start completing your own tax return this season.
Here is the link to the full information from the official government site if you want to read more around this topic.
Why Is HMRC Asking for More?
The straightforward answer is that visibility and compliance are key to HMRC. We’ve known for some time that this is the direction HMRC plans to pursue. They have increased the number of compliance officers in recent years, so it’s important for all of us to ensure we are compliant and transparent regarding our taxes.
We will do our bit to help our clients stay on the right side of HMRC. If you need help with staying on the right side, here’s how we make you feel calm and confident about your taxes.
Coming back to the changes this year, HMRC wants a clearer picture of:
- who owns businesses,
- how profits are being extracted,
- and whether what’s reported personally matches what’s reported by the company.
The government believes that collecting more detailed information will lead to:
- better compliance,
- fewer errors,
- and a more robust tax system overall, and perhaps some more tax.
From a practical perspective, it also means HMRC can cross‑check information more easily between your company accounts and your personal tax return.
Why This Matters for Small Business Owners
For many business owners, this change isn’t about paying more tax, it’s about getting the reporting right.
But there are a few important implications:
-
Record‑Keeping Becomes More Important
You’ll need to track:
- dividend payments clearly,
- changes in shareholding,
- and key company details.
If records are incomplete or unclear, year‑end becomes harder.
-
There’s Less Room for “Rough Figures”
There was never room for “rough figures” but you could get away with not delving into the details. In the past, many people grouped dividends together. But that’s no longer enough.
Now HMRC wants specific details linked to specific companies.
Where It Could Get Tricky
While the rules sound straightforward, some practical challenges have already been raised.
For example:
- What if a company has multiple share classes? How do you calculate percentages?
- What if you’re a director but not a shareholder?
- What if you have multiple directorships?
Currently, there is no clear guidance on this matter as it is still developing. It’s frustrating because we are beginning to complete the tax returns.
What Should You Be Doing Now?
You don’t need to panic but you do need to prepare.
Here are some simple steps to stay ahead:
-
Keep Better Records
Make sure dividend payments and shareholdings are clearly documented throughout the year, not just at year‑end.
-
Understand Your Position
You need to know:
- which companies you’re a director of,
- what dividends you’re taking,
- and what your ownership percentage is.
-
Don’t Leave It Until January
The last thing you want is to be chasing missing details when filing deadlines approach.
-
Speak to Your Accountant Early
These changes are manageable but only if you understand them properly. A quick conversation now can save time and stress later.
Final Thoughts
These changes mainly involve adding a few extra boxes to your tax return to ensure that you capture all relevant information. They reflect a broader shift: HMRC is seeking more detail, accuracy, and transparency from business owners.
If you are organised and maintain clear records, the process will be straightforward. However, if you tend to leave things until the last minute and are not well-organised, this may reveal areas where your record-keeping or processes need improvement.
In fact, the biggest risk is not the new rules themselves, but rather:
- leaving things until the last minute,
- not having the right information to hand,
- or not being clear on what’s required.
That’s where the pressure builds. Many clients use us to do their bookkeeping, so the records are always up to date. If you need help with your bookkeeping, email your normal manager or have a look at who we are.
For many small business owners, the real value of collaborating with an accountant isn’t just compliance, it’s having someone who:
- explains what’s changed in plain English,
- keeps you ahead of deadlines,
- and takes away that feeling of “am I missing something?”
Either way, it’s a good reminder that staying on top of your financial information is just as important as running the business itself.
If you’re unsure how these changes affect you, or you’d like help getting everything in place before the new rules fully apply, it’s worth having a conversation. Call or email your normal manager.
If you are looking for help with your bookkeeping, accounts, or tax, visit us at https://www.myersclark.co.uk/