Company directors have special tax obligations. In the UK, the Self Assessment scheme used by HMRC is for income tax that isn’t paid through Pay As You Earn (PAYE). Directors are usually required to file for Self Assessment if they receive any kind of income that isn’t already taxed.
For example, if you receive dividends, other benefits, or director’s loans, you should consider filing a Self Assessment. If you only have income that is taxed through the PAYE scheme, you won’t have to file a Self Assessment.
In this article, we’ll be explaining how filing Self Assessment works for directors.
Self Assessment is HMRC’s system for collecting Income Tax on income not fully taxed at source. Company directors often have income outside PAYE , so many need to use it.
Here are five situations where you are likely to require Self Assessment:
In practice, almost all active directors need to file a tax return, because most take some dividends or other untaxed income.
For the 2026/27 tax year (6 April 2026 to 5 April 2027), directors who need to file a return must register by 5 October 2027.
Below are the key deadlines to be aware of:
If you register after 5 October, HMRC will normally give you a different filing date, which is three months from the date of registration. ‘Payments on account’ are due if your liability for tax is higher than £1,000 but less than 80% of your liability was paid through PAYE.
Directors must register for Self Assessment tax returns if they receive untaxed income (dividends, interest, a director’s loan, etc.) in addition to salary.
If you need to file, the first step is to register with HMRC for Self Assessment.
The easiest way to register is via your HMRC online account using Government Gateway/HMRC online services .
You’ll need your personal details, National Insurance number, and the date you became a director.
Register as soon as possible after your company is set up or after you first receive income. HMRC will issue your Unique Taxpayer Reference (UTR) by post, which can take up to two weeks.
If you miss the 5 October deadline, register immediately. HMRC will usually set a new personal deadline for filing.
If your only income is a salary taxed via PAYE, and your company has not paid you any dividends or loans, you normally don’t need a Self Assessment return. Likewise, if your company is dormant, you aren’t required to register.
If you are paid only through PAYE and have no additional income, you typically do not have to file a tax return.
If you incorporated a company but never traded or took any money out, you don’t need to register for Self Assessment.
If you only earn small amounts of interest, dividends, or rental income within your personal tax allowances, you may not need to file, although many directors choose to submit returns anyway.
You must file a tax return even if you end up owing no tax. Filing late can incur penalties regardless of whether tax is due.
HMRC imposes penalties for late returns and late payments. For example, a late return incurs an automatic £100 fine, rising to daily penalties and additional charges after 6 and 12 months. Late tax payments incur 5% penalties after 30 days, 6 months, and 12 months. Always aim to register and file on time to avoid these charges.
This table helps you recognise the nature of late payments.
You must register with HMRC by 5 October following the end of the tax year in which you received untaxed income. For example, for the 2026/27 tax year (6 April 2026 to 5 April 2027), the registration deadline is 5 October 2027.
Additionally, you may need to make payments on account, which are advance payments towards your next year’s tax bill. These payments are typically due by 31 January and 31 July.
A Self Assessment return includes all income and gains for the year from all sources. Here is a quick list of things to include in your Self Assessment tax return.
Reporting director’s loans through Self Assessment can be done via Gov.uk , but you should be aware that different loans require different actions:
Loans exceeding £10,000 at any point in the year are treated as a taxable benefit and must be declared.
For example, if a director borrows £12,000 from the company in May and repays £3,000 in July, it must be reported as a benefit in kind, as the balance exceeded £10,000 during the year.
If interest is charged at a rate below the official rate, the difference is treated as a taxable benefit.
For example, if a company lends £8,000 to a director and charges no interest, HMRC treats the interest that would have been charged at the official rate as taxable income for the director.
Any loan written off by the company is treated as income and must be included on your return.
For example, if a director owes £5,000 to the company, and the company later writes off the balance, the £5,000 is treated as income that must be taxed accordingly.
Getting your company set up and compliant from day one is vital. Directors must comply with specific rules when filing their Self Assessment returns
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Yes. If your circumstances change, you can ask HMRC to close your Self Assessment record.
You are still obliged to file within the filing deadline. It is possible to incur a penalty for filing late even if you owe no taxes.
Directors with simple tax affairs often use HMRC’s online service, but many choose an accountant for peace of mind or tax planning advice.