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 ...
		Late Payments Bill gains momentum for small businesses The Late Payments Bill is progressing through Parliament, and small businesses may finally receive stronger protection against slow payers. It introduces tighter payment terms, firmer enforcement, and greater pressure on larg...
		Phishing remains the most prevalent form of cyberattack Cybersecurity continues to be a growing concern for businesses, with new government research confirming that phishing remains the most common type of cyberattack affecting organisations across the country ......
		New tax return rules for company directors create uncertainty 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 ...
		Summer holiday VAT reduction for families: what it means for days out The Chancellor has announced a summer holiday VAT reduction for families, which may ease the pressure a little on meals, tickets and family days out. The catch is that the rules are narrow, the window is short, and businesses...
		HMRC mileage rate increased to 55p on the 6th April 2026 On the 6th April 2026, HMRC increased the approved mileage rate to 55p per mile for the first 10,000 business miles. It's a helpful change for employees and the self-employed, and it may be worth reviewing reimbursements, pay...
		HMRC AI fraud detection: how new technology will spot tax return errors AI-based fraud detection is set to help HMRC spot mistakes, suspicious patterns and missed payments more quickly. The idea is simple: artificial intelligence supports staff, while people still make the final call ......
		Understanding the new FSCS protection limit Many business owners and savers may have received messages from their bank about changes to the Financial Services Compensation Scheme (FSCS). The key update is that the protection limit for eligible deposits has increased fr...
		UK economic growth as price pressures build UK economic growth has remained surprisingly resilient, but higher prices are making households and firms more cautious. The big question is whether inflation costs translate into lasting wage pressure, which would force the ...

Other bloggers you may like ...
		Why most small business owners struggle with consistent content Posted by Steffi Lewis on https://www.sblogit.com If you've ever said to yourself, ''I really need to post more regularly'', only to realise it's been three months since your last blog post? You're no ...
		Preparing to retire: practical advice for small business owners Posted by Jacky Sherman on https://www.jackysherman.com Thinking about retiring from your business can feel a bit surreal. For many small business owners in the UK, the line between 'work' and 'life' has be ...
		Visiting Milton Keynes this Summer? Serviced accommodation is the smarter way to stay! Posted by Emily Freeman on https://blog.shortstay-mk.co.uk If you're planning a trip to Milton Keynes this summer, you're probably already thinking about where to stay. Hotels might seem like the obvious choic ...
		What skills do employers value in 2026? Posted by Dave Cordle on https://blog.davecordle.co.uk If you're considering your next career move, it's natural to wonder what employers are really looking for. While specific technical skills vary across ...