With the announcement of new tax measures affecting privately owned businesses, we asked our Tax Partner, Tim Humphries to brief us.
“New draft legislation has just been issued under which HMRC will be granted additional authority to gather data concerning dividend payments earned by directors of owner-managed businesses.
Starting from April 2025, individuals involved with owner-managed businesses will have to disclose on their self-assessment tax returns the amount of dividend income received from their own companies separately from other dividend income e.g. from an investment portfolio.
They will also need to specify the percentage of shares they hold in their own companies.
To facilitate this, HMRC will request specific information on the Employment pages of the Return asking for a breakdown of the dividends and the percentage of shareholding in a close company where the individual serves as a director.
Penalties of £60 will be imposed for failure to comply with the legislation”.
Tim also added “another measure just announced that will affect all businesses, requires employers to provide detailed information on the number of hours worked by employees. This will be reported through the monthly payroll. The aim of this data collection, according to HMRC, is to enhance government support for the labour market and combat tax evasion through improved compliance”.
It is important to note however that some of the original plans on this have been scaled back following objections from stakeholders during a 2022 consultation. The tax authority will no longer collect data on employee job titles, precise working locations, or specific details about the type of work done by individual self-employed workers.
We are certain that we will hear more on both these areas of tax legislation in the very near future.
If you would like to speak to Tim, or a member of our Tax Team about your tax affairs contact us or telephone us on 020 3697 7147. Or you can visit our web chat in the bottom right corner which is manned during office ours and you can leave a message out of hours.
The RPGCC team are always just a click or call away.
