Do company directors need to do a Self Assessment tax return?

Does being a director mean you must file?

Being a company director does not, on its own, mean you must send a Self Assessment return. In HMRC's online checker for the 2025 to 2026 tax year, choosing 'Director of a limited company' takes you on to further questions about your income. It does not end with 'you need to send a return'.

HMRC's director guidance says you may need to file if, for example, you receive dividends from the company or have other untaxed income on top of your director's salary. A salary paid through the company's PAYE payroll is already taxed, so it is not a trigger by itself.

Many owner-directors pay themselves a small salary and take the rest as dividends. That is why many of them still need to file, even though the directorship is not the reason.

Source: Check if you need to send a Self Assessment tax return

The triggers that still apply to directors

These are the points in HMRC's checker that most often catch owner-directors. If any applies to you for the tax year, you need to send a return, or check further where the table says so.

The tax year runs from 6 April to 5 April. The 2025 to 2026 tax year ended on 5 April 2026.

Source: Check if you need to send a Self Assessment tax return

Dividends: the £500 allowance and the £10,000 line

Everyone gets a dividend allowance of £500 each year. You pay no tax on dividends within your unused Personal Allowance or within the dividend allowance.

For 2026 to 2027, dividends above the allowance are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. You add dividends to your other income to work out which band they fall in.

If your dividends are taxable but no more than £10,000, and you do not already file, you can tell HMRC after 5 April and before 5 October. You can ask HMRC to update your tax code or contact the helpline. If your dividends are over £10,000, you need to fill in a Self Assessment return.

If you already send a return for another reason, you must include your dividends on it, whatever the amount.

The company pays its own Corporation Tax on its profits, separately from your personal tax. See Corporation Tax rates for 2026/27 for the company side.

Source: Tax on dividends: how to report tax on dividends

Director's loans can also mean a return

A director's loan is money you take from the company that is not salary, dividends or an expense repayment. GOV.UK's director's loans guidance says that if you are a shareholder and director and owe the company more than £10,000 at any time in the year, you must report the loan on a personal Self Assessment tax return.

If the company writes off or releases a director's loan instead of you repaying it, GOV.UK says you pay Income Tax on it through a Self Assessment tax return. The company has its own Corporation Tax and National Insurance responsibilities on director's loans, which are outside this guide.

Source: Director's loans: if you owe your company money

What happened to the £150,000 rule?

The £150,000 rule no longer applies. People taxed only through PAYE used to need a Self Assessment return once their income passed a set level, which HMRC raised from £100,000 to £150,000 for the 2023 to 2024 tax year. From the 2024 to 2025 tax year onwards, HMRC removed that income threshold for PAYE-only taxpayers.

A high salary taxed fully through PAYE is no longer a reason to file by itself.

This change does not help a director who has dividends or other untaxed income. Those still count, at any salary level.

Source: HMRC Agent Update issue 120: PAYE-only threshold removed

Deadlines for the 2025 to 2026 tax year

If you have not sent a return before, or did not need to send one for 2024 to 2025, you must tell HMRC by 5 October that you need to file. You do this by registering for Self Assessment.

If you register after 5 October 2026, HMRC will give you a different filing deadline, 3 months from the date of its letter or email. The tax is still due by 31 January 2027.

Source: Self Assessment tax returns: deadlines

Payments on account: why your first bill can be bigger

Payments on account are advance payments towards your next Self Assessment bill. GOV.UK says each one is half of the tax you owed last year, and they are due by midnight on 31 January and 31 July.

You do not have to make them if the tax you owed last year was less than £1,000, or if more than 80% of the tax you owed last year was paid outside Self Assessment, for example through your tax code.

That is why a director's first bill can be a shock. If you have not made payments on account before, the 31 January payment includes the full bill for the year just ended plus the first payment on account for the current year.

Here is a round-number illustration. Say your Self Assessment bill for 2025 to 2026 is £4,000, you have never filed before and neither exception above applies. By 31 January 2027 you pay £4,000 plus a first payment on account of £2,000, so £6,000 in total. A second payment on account of £2,000 is due by 31 July 2027. If your 2026 to 2027 bill turns out higher than the £4,000 paid on account, you pay the difference as a balancing payment by 31 January 2028.

If you know your next bill will be lower, you can ask HMRC to reduce your payments on account online or on form SA303. If you reduce them too far, you will be charged interest on the difference.

Source: Understand your Self Assessment tax bill: payments on account

Penalties if you file or pay late

A late return gets an initial £100 penalty. After 3 months, daily penalties of £10 a day can follow, up to £900. Further penalties apply at 6 and 12 months: 5% of the tax due or £300, whichever is greater, each time.

Late payment adds penalties of 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest. If you register after 5 October and do not pay in full by 31 January, you may also get a 'failure to notify' penalty.

Source: Self Assessment tax returns: penalties

Making Tax Digital for Income Tax and directors

Making Tax Digital for Income Tax is for sole traders and landlords. GOV.UK says it counts only qualifying income: your turnover from self-employment and property. Employment income taxed through PAYE and dividends, including dividends from your own company, do not count.

So a director paid by salary and dividends alone does not need to use it. If you also have self-employment or rental income, GOV.UK says you need it from 6 April 2026 if that income was over £50,000 in 2024 to 2025, from 6 April 2027 if over £30,000 in 2025 to 2026, and from 6 April 2028 if over £20,000 in 2026 to 2027.

VAT has its own digital rules for the company. See Making Tax Digital for VAT if the company is VAT registered.

Source: Work out your qualifying income for Making Tax Digital for Income Tax

How to check your own position

Use HMRC's checker on GOV.UK. It covers the 2025 to 2026 tax year and asks about your work, income, dividends, savings, property and Child Benefit.

You must send a return if HMRC asks you to, whatever the checker says. If you think you no longer need to file, contact HMRC and explain why.

Source: Check if you need to send a Self Assessment tax return

Common Self Assessment mistakes for directors

Assuming a small salary means no return. The dividends you take on top are what usually matter.

Ignoring a notice to file because you think the director rule has gone. A notice from HMRC still has to be answered by its deadline.

Confusing UTRs. Your company's Corporation Tax UTR is not your personal Self Assessment UTR. You get a personal one when you register.

Missing 5 October. If you have never filed before, registering late can lead to a penalty if the tax is not paid by 31 January.

Forgetting that you can stop. If your income changes and you no longer need a return, tell HMRC rather than leaving the record open.

Mixing up personal and company filings. Your return is separate from the company's own deadlines, which are set out in company director filing responsibilities.

Source: Self Assessment tax returns: who must send a tax return