New tax return rules for company directors create uncertainty

CREATED BY ROGER EDDOWES

Published: 11/06/2026 @ 09:00AM

#TaxReturnRules #CompanyDirector #HMRCGuidance #SelfAssessment #Reporting #Traders

The new tax return rules for company directors aim to improve reporting but also cause confusion. Directors and traders must provide more detail in their self-assessment returns, yet HMRC guidance leaves gaps. Many will wait for clearer answers ...

Uncertainty looms as new tax return rules for company directors spark confusion and concern

The new tax return rules for company directors are designed to tighten reporting, but I believe they also introduce a fair amount of uncertainty for anyone trying to get self-assessment right the first time. For many company directors, the change feels less like a simple update and more like a test of how well HMRC guidance aligns with real life.

Directors are being asked to provide more detail about
their role, the company's status, and in some cases, their
dividend income and shareholding!

While this may seem simple on paper, it can become complicated when the facts are not clear. A director who is unpaid, holds multiple appointments, or has fluctuating shareholdings might find filling out the form more challenging than anticipated.

The key question is not whether the information matters, but where it should be entered and how HMRC wants it presented.

The new tax return rules for company directors appear to assume a neat structure, whereas I know that many businesses operate in a far less neat way. For example, an unpaid director may reasonably wonder whether the employment pages must still be completed or whether the details can be entered elsewhere in the return.

The same uncertainty applies to multiple directorships. Some of my clients act as trustees or hold multiple board roles, and software does not always handle this gracefully. If the return software limits the number of entries, the taxpayer is left guessing whether HMRC will accept an alternative disclosure. This is not ideal for director responsibilities, especially when penalties can follow incomplete reporting.

There is also a practical problem for directors of
close companies that are not shareholders!

The new boxes seem to assume that share ownership always exists, but that is not always the case. When a nil holding does not fit neatly into the filing software, the taxpayer is left with an awkward question: how should the return be completed without triggering an error?

HMRC guidance will be crucial here, particularly on when a trade starts or ends, how percentage ownership should be measured, and how to handle ownership split across share classes.

Until that guidance is clearer, I can see the new tax return rules for company directors creating more administrative burden and significant uncertainty. Businesses are not seeking leniency so much as a workable process that reflects how company directors actually operate.

The new tax return rules for company directors may improve data quality over time, yet for now, they leave many taxpayers navigating self-assessment with more questions than answers.

I think the intent behind the changes is understandable, but the delivery still feels underdeveloped.

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Would you like to know more?

If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about the new tax return requirements for company directors, then do call me on 01908 774320 and let's see how I can help you.

Don't forget to stay updated with our daily social media posts on Facebook.

Share the blog love ...

Buffer

Facebook

Twitter

#TaxReturnRules #CompanyDirector #HMRCGuidance #SelfAssessment #Reporting #Traders

About Roger Eddowes ...

Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

More blog posts for you to enjoy ...

		Growing our team to support yours At Essendon, we believe that good accounting is about more than numbers. It's about giving business owners confidence that everything is organised, properly handled, and under control ......
		Millions of taxpayers could soon have to pay their tax earlier Millions of taxpayers could pay their tax earlier under HMRC's proposed self-assessment changes. The move may smooth tax deadlines, but it could also tighten cash flow. For many, the real issue will be how quickly the system ...
		Rising labour costs, energy bills and late payments are holding businesses back This pressure is feeding straight into weaker cash flow and tighter margins for everyone. Businesses are finding it harder to plan, price and grow when expenses keep climbing faster than demand. It is a messy combination, and...
		HMRC announces tax simplification changes for employers and businesses I read with interest an announcement by HMRC about a series of measures designed to simplify the tax system, reduce administrative burdens and make it easier for businesses to meet their tax obligations. While many of the pro...
		Who's going to pay for Burnham's Britain? Burnham's Britain sounds bold, but the maths still has to work. If taxes rise, borrowing climbs, or spending is squeezed, somebody pays. The tricky part is making the politics add up without breaking the economy ......
		How to spend less and save more without feeling deprived Want to spend less and save more? My blog post today explains how to spot waste, trim bills, and build better habits without feeling restricted. It also covers budgeting, debt, and practical checks that can quietly improve yo...
		HMRC vs giant marshmallows: are they confectionery or fire-toasting food? The ongoing giant marshmallow case has finally concluded, with HMRC deciding not to appeal. The VAT dispute hinges on whether these oversized treats are confectionery or fire-toasting food, and the ruling suggests that size a...
		HMRC reminds businesses to register for VAT on time HMRC is reminding businesses to check whether they need to register for VAT, especially when turnover is close to the VAT threshold. Some firms may still be outside the rules, so it pays to review the facts before acting ......

Other bloggers you may like ...

		Remote working gave people freedom, but less human contact Posted by Steffi Lewis on https://www.yourping.uk Remote work has transformed modern working life. For many, it has brought flexibility, reduced commuting costs and a better work-life balance. The fre ...
		Do I actually still work? Absolutely, I just work differently Posted by Davina Farrer on https://blog.joindavina.co.uk One question I get asked quite a lot is, 'Do you actually still work?' I always smile because I can see why people ask, but I do, in fact, work incred ...
		Why you should only use AI as a research tool, not the final word Posted by Pritesh Ganatra on https://blog.btsuk.net Use AI as a research tool to spark ideas and speed up reading. Then verify, compare sources, and keep judgment yours. It's guidance, not gospel ... ...
		10 reasons YourPCM is the small business CRM you'll actually use Posted by Steffi Lewis on https://www.yourpcm.uk Choosing a CRM can feel like a big decision, especially when so many systems promise everything but end up being overly complicated, expensive, or sim ...

New tax return rules for company directors create uncertainty

Directors are being asked to provide more detail abouttheir role, the company's status, and in some cases, theirdividend income and shareholding!

The key question is not whether the information matters, but where it should be entered and how HMRC wants it presented.

There is also a practical problem for directors ofclose companies that are not shareholders!

HMRC guidance will be crucial here, particularly on when a trade starts or ends, how percentage ownership should be measured, and how to handle ownership split across share classes.

Directors are being asked to provide more detail about
their role, the company's status, and in some cases, their
dividend income and shareholding!

There is also a practical problem for directors of
close companies that are not shareholders!