Following the news that new tax reporting rules could affect company directors HMRC is getting in touch with people who have significant control of a company, asking them to check whether they’ve reported their personal income and gains correctly.
Receiving a letter doesn’t mean HMRC has found a mistake. So do be aware that the letter is not a formal compliance check. But it is a useful reminder that transactions between you and your company can sometimes affect your personal tax position.
Who might receive a letter?
Letters are being sent to a person with significant control, or PSC. A PSC is generally someone who owns more than 25% of a company’s shares or voting rights, can appoint or remove most of its directors, or otherwise has significant influence over it. You can be a PSC whether or not you’re a director.
What does HMRC want you to check?
HMRC is focused on several situations that may have personal tax consequences. These include the company paying personal expenses, loans from the company, personal use of company assets, transfers of assets and sales of shares. Whether anything needs to be declared depends on the circumstances.
If you receive a letter, it’s worth checking your tax return against the company’s records and speaking to your accountant about anything you’re unsure of. HMRC is asking those it’s contacted to make sure their 2025/26 return is correct by 31 January 2027 and to put right any relevant mistakes in earlier returns by that date. If everything is already correct, you don’t need to reply.
Unsure what belongs on your tax return?
Company and personal finances can overlap in ways that aren’t always obvious. If you’ve received a letter, or would simply like reassurance before filing, get in touch with our friendly team. We can help you review your records and work out whether any action is needed.