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
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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.

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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!