Taxpayers may need to provide more information in their 2025/26 Self Assessment tax returns as some voluntary requirements have been made mandatory and new mandatory requirements have also been introduced.
In particular, new mandatory requirements have been introduced for taxpayers who start or cease to trade and for directors of close companies. The government estimates that this will have an impact on approximately 1.2 million taxpayers carrying on a trade and 900,000 directors.
HMRC has confirmed that it will not be taking forward other proposals requiring employers to provide additional information.
Commencements and cessations
Where a person starts or ceases to trade during a tax year, they must report the date of commencement/cessation in the tax return for that year. This will affect personal tax returns, partnership returns and trustee’s returns. This question is included on the tax return for 2024/25 and earlier years but answering it is voluntary; it will become mandatory for 2025/26 and future returns.
Company directors
Existing questions on the tax return ask whether the individual is a company director of a close company; answering will become mandatory from 5 April 2025. Broadly, a “close” company is one that is under the control of its directors or five or fewer participators
In addition, a director of a close company must include the following information in their tax return for 2025/26 and future years:
- the name and registered number of the close company
- the value of dividends received from the close company for the year
- their percentage shareholding in the company during the year
Providing this information won’t always be easy and we hope that HMRC will publish guidance to assist with more complex scenarios. In the meantime, the DSG tax team can guide you through the new requirements and how they impact your personal circumstances.