HMRC new dividend reporting rules 2025/26 — what limited company directors must declare on Self Assessment
Direct Answer
From the 2025/26 Self Assessment return, shareholders in close companies — which includes almost every contractor limited company — must report four new items per company: the company name, company registration number (CRN), total dividend received, and peak shareholding percentage during the year. The rules come from the Income Tax (Additional Information) Regulations 2025. Each missing or incorrect item carries a £60 fixed penalty. If you don't know your peak shareholding figure, you need to go back through your records.
What has HMRC changed and why?
HMRC has long collected dividend information from the paying company side through returns such as CT61 and company tax returns. The new rules extend that requirement to the recipient side — specifically shareholders in close companies who declare dividends on their Self Assessment return.
The stated aim is to improve HMRC's ability to cross-reference dividend payments, detect discrepancies between what companies report as paid and what shareholders declare as received, and flag cases where the Vermilion "bright line" may apply (more on that below).
The legislative vehicle is the Income Tax (Additional Information) Regulations 2025, which amend the existing SA return data requirements for tax years from 2025/26 onwards.
For the vast majority of contractor directors this will not change how much tax you owe. It changes what you need to record and declare — and it adds a new category of penalty exposure if you get it wrong.
Does this apply to your limited company?
The rules apply to shareholders in close companies. The definition of a close company for these purposes is:
- A UK company controlled by its directors, or
- A UK company controlled by five or fewer participators (shareholders)
Most contractor limited companies are controlled by a single director-shareholder. They are close companies by both tests simultaneously. If you own your own limited company and take dividends from it, you are almost certainly in scope.
The main exceptions are:
- Dividends from quoted companies (listed on a recognised stock exchange such as the LSE or AIM) — these are not close company dividends and are reported as before
- Dividends from non-close corporate groups where the paying company is itself not close
If your limited company is the only company involved, the exception does not apply. You are in scope.
Exactly what you must report
For each close company from which you receive dividends in 2025/26, your Self Assessment return must include:
- Company name — the registered name of the paying company
- Company registration number (CRN) — the 8-digit Companies House number
- Total dividend amount — the gross dividend received during the tax year (6 April 2025 to 5 April 2026)
- Peak shareholding percentage — the highest percentage of shares you held at any single point during the year
The penalty is £60 per missing or incorrect item. That means up to £240 exposure per company if all four items are wrong — and penalties stack if you receive dividends from more than one close company.
It is worth noting that "incorrect" is not the same as "fraudulent". An honest mistake — for example, entering your year-end shareholding rather than your peak shareholding — can still trigger a penalty if HMRC identifies the discrepancy.
The peak shareholding rule and alphabet shares
For most single-director, single-class-of-share contractors this is simple: you own 100% throughout the year. Report 100%.
The rule becomes more complex if you use alphabet shares — multiple share classes (A shares, B shares, C shares, etc.) often used to split dividends between spouses or partners. In this structure, the percentage of total company value you effectively represent can change as shares are issued, transferred, or cancelled.
HMRC requires the highest percentage held at any point during the year. If your spouse was issued new shares in September 2025 that diluted your holding from 75% to 50%, you report 75% — your peak — not your 5 April 2026 figure of 50%.
This means your records need to capture share structure throughout the year, not just at year end. If you've changed your share structure during 2025/26, check your Companies House filings and board minutes to reconstruct the timeline.
The Vermilion Holdings case is also relevant here. That Supreme Court decision confirmed HMRC can recharacterise certain close company dividends as employment income where the arrangement is connected to an employment relationship. The bright-line test it introduced is fact-specific, but it is more likely to be triggered where share structures are complex or where dividends effectively track employment performance. If your setup involves anything beyond simple ordinary shares, get advice.
What records do you need to keep?
To comply with the new reporting rules and defend your SA return if HMRC queries it, you should hold:
- Dividend vouchers — one per dividend declaration, showing the date, amount per share, and total paid
- Board minutes — authorising each dividend payment (legally required under company law, often overlooked in practice)
- Share register — showing your shareholding on every date there was a change, plus at the start and end of the tax year
- Companies House filings — confirmation statements (SH01s, etc.) that confirm share structure changes
HMRC's standard record-keeping window is 22 months from the end of the tax year for SA purposes, but enquiry windows can extend to six years in cases of careless error and 20 years for deliberate non-compliance. Keep dividend and shareholding records for at least six years.
Read more about how dividends interact with the salary and dividend split in our dedicated guide.
When does your 2025/26 SA return need to be filed?
The 2025/26 tax year runs from 6 April 2025 to 5 April 2026. Key deadlines:
- 31 October 2026 — paper Self Assessment filing deadline (not recommended)
- 31 January 2027 — online Self Assessment filing deadline
- 31 January 2027 — payment deadline for any tax owed
The new close-company dividend reporting requirements apply from the moment the 2025/26 return window opens. Filing early does not exempt you from the new disclosure rules.
For context on how the 2025/26 SA return interacts with fiscal drag and frozen thresholds, see our companion piece on HMRC's record April 2026 receipts.
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