Company directors face £60 penalties from HMRC for failing to complete a new tax return form, a policy now overseen by Prime Minister Andy Burnham and Chancellor John Healey. The mandatory SA102 Employment pages require directors to disclose dividend income details; leaving them blank triggers the fine.
New Reporting Requirements for Directors
HMRC has made it compulsory for company directors to provide more detailed information about their dividend income by completing the SA102 Employment pages of their tax return. This change applies to all tax returns filed for the 2025-26 tax year, with a deadline of January 31, 2027. Directors who fail to fill in the form risk automatic £60 penalties.
The policy was inherited from the previous administration, but Burnham and Healey now oversee HMRC and will enforce it. Burnham became Prime Minister last month and has ruled out an early election, meaning he will still be in office when the deadline arrives.
Industry Concerns and Calls for Leniency
The Association of Taxation Technicians (ATT), a professional body, has urged HMRC to waive penalties for the 2025-26 tax year while business owners adjust to the change. Emma Rawson of the ATT expressed concern: "Our concern is people won't know about this, won't do it and will get penalised."
Chris Etherington of accountancy firm RSM echoed this sentiment, noting that the new requirements have not been widely publicised. "These new reporting requirements have not been widely publicised, so directors may not know they exist or how the rules apply to them," he said. Etherington also warned that directors might wrongly assume they have nothing to disclose if their company is dormant or they received no income, but "that may not be the case."
HMRC's Response and Guidance
An HMRC spokesman defended the changes, stating: "These changes will improve our understanding of how directors are paid so we can better support them with their tax affairs. We've engaged extensively with stakeholders since we started consulting on the changes three years ago and we're updating our guidance to help directors get things right." The spokesman added that HMRC will take a "considered approach" to directors who have made reasonable efforts to meet their obligations.
Despite the assurance, tax experts remain concerned about the lack of awareness among directors. The ATT and RSM have both called for clearer communication and a grace period to avoid penalising those who are unaware of the new rules.
Impact on Business Owners
For the estimated millions of company directors in the UK, this adds another layer of compliance to their tax affairs. The £60 penalty, while modest, can accumulate if multiple errors are made. Directors are advised to review HMRC's updated guidance and ensure they complete the SA102 form correctly to avoid fines.
The policy takes effect for the 2025-26 tax year, with the deadline for filing returns on January 31, 2027. As the new government settles in, business owners will be watching to see if any adjustments are made to the penalty regime in response to industry feedback.
