Key changes to the self-assessment tax Return from April 2025

What you need to know

Starting from 6 April 2025, significant changes to the Self-Assessment tax return process have come into effect. These updates primarily impact taxpayers who start or stop self-employment during the year, as well as directors of close companies, and will impact the tax returns for the 2025/26 tax year and beyond.

What is a close company and how does it impact directors?

A “close company” is defined as a company that is controlled by its directors or by five or fewer individuals, often referred to as ‘participators’. This could include shareholders, for instance. Many family-owned and private companies are typically classified under this category.

Under the new rules, directors of close companies will be required to disclose specific details on their Self-Assessment tax return, including:

• The name and registered number of the close company.
• The total value of dividends received from the company.
• The percentage of shareholding held in the close company during the tax year. If there are changes in shareholding throughout the year, the highest percentage held should be declared.

Previously, the disclosure of these details was optional. However, as of April 2025, it is now mandatory to report this information for all close company directors.

What does this mean for self-employed individuals?

For self-employed individuals, the changes are significant. From April 2025 onwards, anyone who begins or ceases trading during the tax year will need to report these events on their tax return. This includes providing the relevant start and end dates of the trading activity.

Previously, it was optional for taxpayers to report the start or end of self-employment, but now, it is a mandatory requirement. This change will apply to all personal tax returns, partnership returns, and trustees’ returns.

How will these changes affect your tax filing process?

These new requirements mean that there will be more information to report on your Self-Assessment tax return, particularly for those involved in self-employment or who are directors of close companies. It’s crucial to be prepared for these changes and ensure your return is accurately completed to avoid delays or penalties.

For taxpayers who are self-employed, you will need to have clear records regarding the start and end dates of your trading activity during the tax year. For company directors, you’ll need to have up-to-date information on your shareholding and dividends received, as well as any changes in these figures throughout the year.

What should you do next?

To ensure you are fully compliant with these new requirements, it is advised to:

• Keep detailed records of any self-employment activity, including the exact start and end dates of your business operations.
• Maintain accurate information about your role as a director of any close company, including shareholding percentages and dividend details.
• Consider consulting with your accountant or tax advisor to navigate these changes and ensure your tax return is filed correctly.

These updates will impact tax returns for the 2025/26 tax year onwards, so it’s essential to begin preparing for the new requirements now.

Get in touch

Should you require assistance with your self assessment, our expert tax specialists at Rayner Essex are here to help. Contact us today to ensure your tax return is fully compliant with the latest regulatory changes.