Understanding HMRC's Communications with Persons with Significant Control Over Companies

CREATED BY ROGER EDDOWES Published: 26/06/2025 @ 09:00AM #personswithsignificantcontrol #HMRC #taxcompliance #CompaniesHouse #UKbusiness

HMRC has recently commenced a review involving persons with significant control over companies, prompting these individuals to reassess their income and gains for the tax year 2023/24. This initiative is intended to ensure compliance and provide guidance on fulfiling tax obligations effectively ...

Persons with significant control over companies, Hold the fate of business, Power in their hands

HM Revenue and Customs has recently taken decisive steps to reach out to persons with significant control (PSCs) over companies. These individuals play a crucial role in corporate governance and financial practices; therefore, their compliance with tax obligations has become paramount. The correspondence from HMRC serves not only as a reminder of their responsibilities, but also as a comprehensive guide to navigate potential complexities related to income and gains for the 2023/24 tax year.

Persons with significant control have the ability to exert
influence over companies in which they are involved!

Primarily characterised by ownership of more than 25% of shares or voting rights, the definition of a PSC extends to individuals who can appoint or remove a majority of directors or exert considerable influence over business decisions. Consequently, it is imperative for these individuals to regularly review their tax obligations and ensure all income and gains are accurately declared.

The primary motivation behind HMRC's outreach is the observed discrepancies in declared income by PSCs. Notably, persons with significant control may encounter tax implications that arise from various scenarios. For instance, if a PSC has the company cover personal expenses, utilise company assets, or engage in transactions involving loans or share sales, each of these circumstances could potentially create a taxable event that requires proper declaration to HMRC.

HMRC's communication is presented in two distinct forms, based on the individual's tax compliance status:

• For those who filed a tax return for the 2023/24 tax year, the first letter encourages PSCs to scrutinise their returns and rectify any discrepancies by the set deadline of 25 July 2025. This proactive approach helps alleviate the burden of tax-related penalties and fosters a culture of transparency and accountability among individuals of influence within the business realm. The correspondence includes explicit instructions on amending returns, ensuring that PSCs have access to the necessary guidance required for compliance.
• Conversely, for individuals who have not submitted a tax return for 2023/24, HMRC's second letter prompts these PSCs to assess whether a tax return is indeed required and to take the requisite action of filing it by the same deadline of 25 July 2025. The importance of compliance cannot be overstated, especially as failure to adhere to these guidelines could result in significant consequences, ranging from financial penalties to increased scrutiny from HMRC.

As such, it is essential for PSCs to remain vigilant and responsive to HMRC communications, seeking clarification as needed.

Tax compliance for persons with significant control encompasses not only their income from direct salary or shares, but also includes a myriad of scenarios where their position within the company can lead to taxable gains.

The obligation extends to ensuring that all sources of income and gains are accurately reported in subsequent tax returns, including for the 2024/25 tax year. By attending to these aspects, PSCs can mitigate the risk of discrepancies and promote a position of fiscal responsibility.

PSCs should regularly consult with their
accountants and tax advisers!

Such collaboration can yield significant benefits, allowing PSCs to navigate the complexities associated with corporate governance, shareholder agreements, and tax reporting obligations. Seeking professional guidance can further facilitate a smoother tax process and help ensure that potential financial pitfalls are avoided.

Knowing the deadlines set forth by HMRC is essential. The letters issued by HMRC not only provide a timeline for addressing potential issues, but also exemplify the agency's commitment to ensuring fair tax practices across the board. Taking proactive measures, such as filing adjustments or submitting returns promptly, conveys diligence and accountability, characteristics that are integral to an individual's standing in the business community.

Ultimately, it is of utmost importance for persons with significant control to remain informed about their obligations concerning income and gains. These recent communications from HMRC act as both a warning and a roadmap for these influential individuals to engage proactively with their tax responsibilities.

Persons with significant control over companies must recognise their pivotal role in governance and maintain a diligent approach towards their tax responsibilities, thus demonstrating the significance of accountability within the business domain.

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!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #personswithsignificantcontrol #HMRC #taxcompliance #CompaniesHouse #UKbusiness

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 ...
		Beware: Winter Fuel Payment Scams Threaten Vulnerable Pensioners As the government announces automatic winter fuel payments for pensioners, fraudulent schemes emerge to target the vulnerable. Understanding the payment process and remaining vigilant against winter fuel payment scams is esse...
		Understanding Changes to Winter Fuel Payments: Recovery Through the Tax System The government has decided to implement a recovery system for winter fuel payments through HMRC for pensioners with incomes exceeding £35,000. I'm going to talk about its implications for individuals and some of the administr...
		The Chancellor's Spending Review Means There Will Be An Autumn Tax Raid The Chancellor's spending review has unveiled significant public funding increases, yet the budget plan raises alarms about a potential tax raid in the autumn. Some high-net-worth individuals are now preparing to leave Britai...
		Understanding the Implications of Failing to Pay the National Minimum Wage What are the consequences of not adhering to the UK's National Minimum Wage laws? Not surprisingly, employers face significant penalties and damage to their reputations, while employees experience financial hardship ......
		Making Tax Digital for Income Tax (MTD for ITSA) is less than a year away The way you report your income tax is changing. Making Tax Digital for Income Tax (MTD ITSA) is being phased in over the next few years, and if you're a sole trader or landlord, it's important to start preparing now ......
		Don't Be Tricked by Email Scams: Protecting Your Business from BEC Business Email Compromise (BEC) is a growing threat affecting businesses everywhere. I thought I should highlight the importance of recognising the tactics used by fraudsters and provide some practical steps to prevent fallin...
		Are Trade Deals Growth Drivers? Unpacking the Promise and Pitfalls of Recent Agreements The recent trade deals signed by the UK with the US, India, and the EU prompt an essential inquiry: are trade deals growth drivers? While the government portrays these agreements as monumental victories, I think the reality i...
		Important Reminder for Parents: Extend Your Child Benefit Claim for Teenagers! Parents of teenagers are reminded to extend their Child Benefit claim to avoid interruptions in payments. With a deadline for confirming their child's education status approaching, it's crucial to act now to secure vital fina...

Other bloggers you may like ...
		Who's Nurturing Your Network? Unlocking Opportunities Through Connection Posted by Dave Cordle on https://blog.davecordle.co.uk It's well known that nurturing your network is a cornerstone for success. Whatever career mountain you are currently climbing, building genuine connec ...
		5 Challenges Consultants Face Setting Up Their Own Business Posted by Jacky Sherman on https://www.jackysherman.com I recall a fellow attendee at my first sales training course, when I was preparing for my own transition from employee to consultant. She confided in ...
		The Dangers of Raising Capital Gains Tax Rates at the Autumn Budget Posted by Helen Beaumont on https://blog.essendontax.co.uk The debate surrounding Capital Gains Tax rates intensifies as the Chancellor approaches the Autumn Budget. While potential increases aim to address fi ...
		What Is The Most Important Part Of Your Business Network? Posted by Pritesh Ganatra on https://blog.btsuk.net The final words from a recent blog post led me to determine a business network's common point of failure. We're heading into the VoIP era and plunging ...