The Compliance Change Sitting Quietly Inside the Tax Return
Ask a UK practice owner what has dominated 2026 and you will hear about quarterly updates, Companies House identity verification and a Budget landing on the 28th of October. What you will rarely hear about is a small set of boxes on the employment pages of the Self Assessment return. Those boxes are now mandatory, they apply to the 2025/26 return you are about to file in volume, and getting them wrong carries a penalty.
The Income Tax (Additional Information to be included in Returns) Regulations 2025 (SI 2025/84) changed what taxpayers must tell HMRC. Information that was previously optional, or handled informally in the white space, is now a legal reporting requirement from 2025/26 onwards. The government estimated the changes would affect up to 1.2 million self-employed businesses each year and around 900,000 directors of owner-managed companies. For most general practices, that is a large slice of the client list.
What the Rules Actually Require
There are two separate strands, and most firms will be touched by both.
Traders. Where a client began or ceased to carry on a trade, profession or vocation during the tax year, the date of commencement or cessation must be reported in the return for that year. New boxes have been added to the self-employment pages to make this explicit. A vague "mid-summer" answer from the client is no longer enough.
Directors of close companies. The taxpayer must say whether they were a director during the year and whether the company was close. If it was, the return must also carry:
- the name of the close company
- its registered number
- the dividend income received from that company during the year
- the percentage shareholding in that company
On the 2025/26 SA102 these appear as box 6 (director indicator), box 7 (close company indicator) and boxes 7.1 to 7.4. Where the shareholding changed during the year, the highest figure is reported, and HMRC guidance states the percentage is calculated by reference to the nominal value of the shares. Broadly, a company is close where it is controlled by its directors or by five or fewer participators, and the reporting duty bites if the company was close for any part of the tax year.
The Traps HMRC Clarified in September
ICAEW's Tax Faculty pushed HMRC on the awkward cases during 2026 and answers arrived in September, including further guidance on the 17th of September in Agent Update issue 147. The outcomes matter because they contradict what a lot of firms have historically done.
- Unpaid directors are in scope. A director taking no salary and no dividends still has to complete the close company boxes. The regulations require dividend and shareholding figures to be given even where the relevant figure is nil.
- Enter zero, do not leave it blank. Where there is no dividend income or no shareholding, "0" belongs in box 7.3 or 7.4. Blank boxes are a recognised cause of filing errors and rejections.
- Dormant companies are in scope. Directors of dormant close companies must still complete the boxes.
- White space is not a workaround. HMRC has confirmed that simply listing unpaid directorships in the "Any other information" section is not an acceptable way to meet the requirement.
- Charities and CICs get a narrow let-off. HMRC updated the SA150 notes on the 8th of September 2026 so that directors of a registered charity or community interest company do not need to complete the close company boxes where they did not receive, and did not become entitled to receive, any employment income, dividend income or other distribution from that company or any connected company.
- Only existing filers are affected. A director who is not already required to file a Self Assessment return does not need to register purely to report close company information.
The £60 Problem, and Why It Is Really a £6,000 Problem
Where a taxpayer fails to comply with the requirement to complete the close company boxes, HMRC may charge a £60 penalty under section 8(1K) Taxes Management Act 1970, and that is a single penalty regardless of how many directorships, missing employment pages or incomplete boxes are involved. HMRC has said in Agent Update 147 that it will take a "considered approach" when assessing compliance, weighing all relevant facts and circumstances, including the reasonable efforts taxpayers made in light of the guidance available at the time.
So the headline number is modest. The practice risk is not. A firm with a hundred owner-managed company clients, each with two or three directorships across family companies, is looking at several hundred data points that did not exist in last year's workflow. If those gaps surface in the third week of January, they surface as chased emails, delayed approvals, filing rejections and a conversation about whose fault the penalty is. Multiply £60 by a client list and add the goodwill cost of telling a long-standing client you need their nominal share values before the end of the month.
The Software Limit Nobody Has Solved Yet
One practical issue remains live. Some tax return products cap the number of employment pages that can be filed with a return, commonly at eight. That is fine for a client with one directorship and awkward for a client sitting on seven family company boards plus a trading employment. HMRC's online reporting guidance now advises completing a separate employment page for each employment or directorship wherever possible, using the available pages first for those requiring employment income, benefits, expenses or other employment-related entries, and only then using the "Any other information" section for any remaining directorships.
That is a workaround, not a fix, and it is a reason to identify your multi-directorship clients early rather than discovering the ceiling at submission. Clients in family company structures, groups and private equity-backed arrangements are the ones to flag.
Six Things to Do in the Next Two Weeks
- Run a directorship query across your client base. Pull every client who is, or may be, a director. Cross-check against Companies House data rather than trusting last year's return, because appointments and resignations in 2025/26 are exactly what will be missed.
- Build a standing data request. Company name, registered number, dividends received, highest percentage shareholding by nominal value, and appointment or resignation dates. Add it to your Self Assessment questionnaire permanently, not just for this year.
- Tag the close company determinations now. Record whether each company was close at any point during the year and keep the reasoning on file. Doing this once in October is far cheaper than doing it under pressure in January.
- Flag the zero cases explicitly. Unpaid directors, non-shareholding directors and dormant company directors are the returns most likely to be filed with a blank box. Give them their own review step.
- Identify multi-directorship clients. Anyone with more than a handful of directorships needs a planned approach to employment pages before you start the return.
- Capture trade start and cessation dates at source. Any client who began or ceased self-employment during 2025/26 needs an actual date on file, evidenced, not estimated.
Why This Belongs in Your Process, Not Your Memory
The direction of travel is unmistakable. HMRC is steadily widening the data it collects at source, from digital platform reporting to crypto under CARF, from payrolled benefits to mandatory e-invoicing later this decade. The policy logic given for these director and trader requirements was that better information improves outcomes for taxpayers and strengthens compliance. Whatever your view of that, the operational consequence for firms is constant: more fields, more evidence, more chasing.
Firms that absorb this well treat each new requirement as a change to the client data request and the review checklist, held centrally, applied automatically to every relevant client, and visible to whoever picks up the job. Firms that absorb it badly rely on the one senior person who read the Agent Update. The 2025/26 season, with its final conventional returns running alongside a live MTD year and a Budget in late October, is not the season to rely on memory.
The deadline is the 31st of January 2027. The data gathering starts now.
How TaxCalc Can Help
TaxCalc's Tax Return Production handles the 2025/26 SA102 close company boxes, and our integrated practice management tools let you query your client base by directorship, issue bulk data requests, track who has responded and surface the returns that still have gaps, all from one place. If you would like to see how firms are building these new data points into their January workflow, take a look at our practice management take a trial or book a demo with the team.
