New HMRC Rules for Reporting Dividends: What Small Company Directors Need To Know

HMRC is tightening the rules around how dividends are reported on Self Assessment tax returns. This is not about increasing dividend tax, but about improving transparency and ensuring that shareholder information is reported accurately.

If you run a small limited company, these changes will almost certainly affect you. Here is everything you need to know.

Who These Changes Apply To

The updated reporting rules mainly target small owner-managed companies.

They apply to most limited companies where:

• The company is controlled by five or fewer individual shareholders, or

• The directors are also the shareholders

If you operate a typical small limited company, these rules very likely apply to you.

What You Must Report From 2025 to 2026

From your 2025 to 2026 Self Assessment tax return, HMRC will require extra information about the dividends you receive. This goes beyond the usual dividend income box.

You will need to report:

• The name of your company

• The company registration number

• The total amount of dividends you received that tax year

• The highest percentage shareholding you held during the year

This information is being introduced to improve accuracy, reduce errors, and help HMRC verify whether dividend payments match company records.

Penalties for Missing Information

HMRC can issue a fixed penalty of £60 if the new information is missing or completed incorrectly.

This penalty is separate from late-filing penalties, so even if you submit your return on time, you can still be fined if the dividend details are inaccurate.

With more directors managing their own filings through online platforms, HMRC expects mistakes unless people pay close attention to the new requirements.

What You Should Start Doing Now

To prepare for these changes, begin keeping clearer and more detailed records for the 2025 to 2026 tax year. This should include:

• Dividend vouchers

• Any changes to your shareholding

• Copies of board minutes documenting dividend declarations

• Your company number and registration details

Organised records will help you complete your Self Assessment accurately and avoid unnecessary penalties.

A Good Time To Review Your Tax Strategy

These changes are also a reminder to review how you pay yourself.

It is worth checking whether your current salary and dividend split is still the best setup for the 2025 to 2026 tax year. Small adjustments now can result in better tax efficiency later.

An accountant can help you assess your structure, forecast your tax position, and make sure you are getting the most from your limited company.

The Bottom Line

HMRC’s new dividend reporting rules will add a bit more admin for small company directors, but they are straightforward once you know what is required.

Keep better records, understand what needs to be reported, and make sure everything is accurate when you file. Taking the time to prepare now will save stress, penalties, and last-minute scrambling later.

If you are not sure whether these rules apply to your company or you want help preparing for your next tax return, send us a message. We can walk you through the new requirements and help you stay fully compliant.

Meet Lewis

Lewis is a professional accountant and founder of Rhombus Accounting. He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.

Book a call today to learn more about what Lewis and Rhombus Accounting can do for you.