Disclosure requirements for business owners – what to do now

By Dan Wilton on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

For many small business owners, completing a Self Assessment return has largely been about getting the numbers right. But if you’re reporting for April 2025 onwards, that won’t be enough.

Key takeaways

• There is now a requirement to report exact start and end dates for unincorporated businesses.
• Directors of close companies must also include the company name and registered number, the dividends received from that company, even if nothing was paid, and the highest percentage shareholding held during the year.
• A £60 penalty can apply for each omission, even if the tax has been calculated correctly.
• If there have been recent changes to your company structure, shareholdings or dividend policy, now is a good time to review them. Make sure the documentation is up to date and that you understand how those changes would be reported.

HM Revenue and Customs is placing far greater weight on the detail behind those numbers. In practice, that means more questions, more precise reporting, and less tolerance for gaps or assumptions. Even where the tax outcome doesn’t change, incomplete information could still lead to penalties.

If you run your own business or are a director of a close company, these changes are worth paying attention to now rather than at filing time.

Where the changes are focused

The first change is the requirement to report exact start and end dates for unincorporated businesses. The second, which is likely to catch more people out, is the additional disclosure now required from directors of close companies.

While neither concept is new, the level of precision HMRC expects, and its willingness to penalise missing information, has changed.

Start and end dates are not always as obvious as they sound

On the face of it, asking for a business start date seems straightforward, but it rarely is.

Many businesses don’t begin on a single identifiable day. A side project might generate occasional income before becoming something more commercial. Someone might start trading informally before registering properly. The line between hobby and business isn’t always clear at the time.

The same applies when a business winds down. Work tails off, clients fall away, invoices are settled. Pinpointing the exact moment trading stops can be difficult.

Up to now, there has been a degree of flexibility in how these situations are treated. That flexibility is narrowing. As of 6 April 2025, HMRC expects a clear, supportable date to be included on the return.

In practical terms, that means thinking more carefully about when a trade genuinely begins. If challenged, you would need to explain why you chose that date and what evidence supports it. That could include first invoices raised, contracts signed, marketing activity or when you started actively seeking customers.

If records are patchy, this becomes much harder to justify after the event.

Close companies: a closer look at directors

The more significant change for many will be the new disclosure requirements for directors of close companies.

In simple terms, most owner-managed and family-run companies fall into this category. As of the 2025 to 2026 tax year, directors need to include additional information within their personal tax returns.

This includes the company name and registered number, the dividends received from that company, even if nothing was paid, and the highest percentage shareholding held during the year.

It’s that last point that often raises questions as shareholdings don’t always stay static. They can change during the year because of new shares being issued, family transfers, restructuring, or succession planning. Tracking the highest percentage held at any point requires more than a snapshot at the year end.

In practice, this means keeping a clearer audit trail of ownership changes. If there has been any movement in shares during the year, it is worth checking now how that would be reflected if you had to report the peak position.

This additional disclosure gives HMRC a more complete picture of how income is extracted and how control sits within the business. It also makes it easier to compare what is reported at company level with what appears on personal returns.

Penalties for getting the detail wrong

Another notable change is the introduction of fixed penalties for missing information.

A £60 penalty can apply for each omission, regardless of whether the tax has been calculated correctly. That’s a change in emphasis. Historically, the focus has been on underpaid tax. Now, the completeness of the return matters in its own right.

It’s easy to see how this could add up. Missing a shareholding detail, omitting a nil dividend disclosure, and overlooking a business cessation date could each trigger separate penalties.

The point here is not that HMRC expects perfection, but that it expects reasonable care to be taken in providing the information it asks for.

What this means in day-to-day terms

For most businesses, what is changing is the level of discipline around record keeping and reporting, rather than the activity itself.

If you are a sole trader or partner, it is worth documenting when a new activity crosses the line into trading. That might feel unnecessary at the time, but it becomes valuable later when you need to justify the position taken.

For company directors, the focus should be on maintaining accurate records of shareholdings and dividend decisions throughout the year, not just at the year end. If there have been changes, make sure they are clearly recorded and can be evidenced.

It is also worth checking that personal and company records tell the same story. Inconsistencies are more likely to be picked up as HMRC joins up the data it receives.

What should business owners do now?

As these changes apply from the 2025/26 tax year, business owners will need to ensure their 2025/26 tax return is submitted with these additional details in full and any changes are tracked ready for the coming years.

If there have been recent changes to your company structure, shareholdings or dividend policy, now is a good time to review them. Make sure the documentation is up to date and that you understand how those changes would be reported.

For unincorporated businesses, start keeping a clearer timeline of activity. If a new venture is developing, note the point at which it becomes commercial in nature.

Doing this in real time is far easier than trying to reconstruct it months later when you are preparing your return.

Dan Wilton is senior tax manager at Old Mill.

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