Unpaid directors still face new tax return reporting

HMRC’s latest Agent Update confirms that a separate employment section should generally be completed for each UK company directorship. This applies even where there was no remuneration or shareholding during the year. The rules do not mean that somebody must register for self-assessment simply because they are a company director. They apply where the individual already has to submit a tax return for another reason. However, once a return is required, the additional director information must be provided.

There are additional requirements where the company is a close company, which will include most owner-managed companies. Directors may have to provide information including dividends received from the company and their percentage shareholding. HMRC has confirmed that the requirements can apply even where the relevant figure is zero and where the company was dormant.

There is an exception for directors of registered charities and community interest companies where they did not receive, or become entitled to receive, employment income, dividends or other distributions from the company or a connected company. HMRC updated its self-assessment return guidance during September to reflect the new requirements.

A practical problem arises for people with numerous directorships because some online filing systems restrict the number of employment pages available. HMRC now says taxpayers should use the available pages first for employments or directorships involving income, benefits, expenses or other employment entries, and put details of any remaining directorships in the additional information section.

HMRC says it will take a “considered approach” to compliance, taking account of reasonable efforts made to meet the new requirements while guidance and filing systems bed in. Nevertheless, anyone preparing a 2025/26 return should make sure that unpaid and dormant-company directorships have not been overlooked simply because nothing was received from the company.