Being a company director is not, by itself, a reason to file a Self Assessment tax return. It has not been for some time, and HMRC’s own guidance on directors’ responsibilities no longer lists it.
That matters, because a large amount of published advice — including from accountants who should know better — still opens with “all company directors must register for Self Assessment.” They must not. What most directors have is income that triggers a return. That is a different thing, and knowing the difference tells you whether you can stop filing.
What actually triggers a return
HMRC lists five situations that make a return mandatory:
- Self-employed as a sole trader earning more than £1,000
- Being a partner in a business partnership
- Having Capital Gains Tax to pay
- Having to pay the High Income Child Benefit Charge and not paying it through PAYE
- Being an off-payroll worker repaying a student or postgraduate loan
Directorship is not on that list. Beyond those five, you may need to file because of untaxed income — and this is where directors land. Dividends, benefits in kind and director’s loans all count.
Reason 1: dividends above your allowances
This is the usual trigger.
The dividend allowance is £500. It has been £500 since 2024/25, down from £1,000 in 2023/24 and £2,000 before that. Dividends inside the allowance are tax-free; dividends above it are taxed at the rate for your income band.
Dividend tax rates rose on 6 April 2026. This is recent and a lot of content has not updated.
| Band | 2026/27 | 2025/26 |
|---|---|---|
| Basic rate | 10.75% | 8.75% |
| Higher rate | 35.75% | 33.75% |
| Additional rate | 39.35% | 39.35% |
Two percentage points on the basic and higher rates. The additional rate is unchanged.
Note that the return you file by 31 January 2027 covers the 2025/26 tax year, so it uses the older rates. The new rates apply to dividends taken from 6 April 2026, which you report in the return due 31 January 2028.
How the two allowances interact. Dividends falling within your unused Personal Allowance are not taxed either. HMRC’s position is that you need to report dividends to them if your dividend payments exceed both your unused Personal Allowance and your dividend allowance. So a director with a £12,570 salary and £600 of dividends has used the whole personal allowance on salary, has £100 of dividends above the £500 allowance, and has a small amount of tax to report.
A director on a £12,570 salary taking £40,000 in dividends is firmly in return territory.
Reason 2: benefits in kind
If the company provides you with something that is not cash — a company car, private medical insurance, an interest-free loan above the threshold — that benefit is taxable on you personally.
Most benefits are reported by the company and collected through your PAYE code, which does not by itself require a return. But where a benefit is not fully covered by your code, or where you have other reportable income alongside it, you will end up filing.
Reason 3: director’s loans
If you take money out of the company that is not salary, dividend or expense reimbursement, it is a loan.
Owing more than £10,000 at any point in the year means the company must treat the loan as a benefit in kind and deduct Class 1 National Insurance through payroll. You must report the loan on a personal Self Assessment return, and you may have tax to pay on it at HMRC’s official rate of interest.
The same applies if you paid the company interest below the official rate: the discount is a benefit in kind, and it goes on your return.
If the loan is written off or released rather than repaid, you pay Income Tax on it through Self Assessment, and the company deducts Class 1 NIC through payroll.
There is also a company-side charge that catches directors out. If the loan is not repaid within nine months of the end of the Corporation Tax accounting period, the company pays Corporation Tax on the outstanding amount, reported on form CT600A.
The rate for that charge went up on 6 April 2026. It is deliberately pegged to the dividend upper rate, so it moved with it:
- 35.75% for loans made, or benefits conferred, on or after 6 April 2026
- 33.75% for loans made between 6 April 2022 and 5 April 2026
Which rate applies is fixed by when the loan was made, not by when the nine-month deadline falls. That tax is reclaimable once the loan is permanently repaid, written off or released — but the interest charged in the meantime is not. Claim after the relief is due, which is nine months and one day after the end of the accounting period in which the loan was cleared, and within four years.
Reason 4: everything else
Directors are often also landlords, investors or consultants. Rental income, foreign income, savings interest and Capital Gains Tax all bring you into Self Assessment independently of your directorship.
The scenario where you genuinely do not need to file
A director who takes a salary within the personal allowance, no dividends above their allowances, no benefits in kind, no director’s loan, and has no other untaxed income has no filing trigger. Nothing in the rules requires that person to send a return.
Two caveats, both important.
If HMRC has issued you a notice to file, you must file. The notice creates the legal obligation regardless of whether the underlying triggers exist. To stop, you have to tell HMRC — there is an online form to close your Self Assessment record or to be removed for a specific tax year. Do it early: HMRC needs time to review the request before 31 January, and a £100 penalty applies if the return simply does not arrive.
Directorship is still visible to HMRC. Companies House data feeds through. Being removed from Self Assessment when you have no filing trigger is a legitimate outcome, not something you are getting away with — but it is worth being confident the triggers really are absent before you ask.
What you still have to do as a director
Dropping out of Self Assessment does not reduce your company obligations. As a director you must still follow the articles of association, keep company records, report certain changes, prepare annual accounts, complete and file the Company Tax Return, and pay Corporation Tax. You can hire someone to do these day to day, but you remain legally responsible.
You may also now need to complete identity verification at Companies House. It became a legal requirement on 18 November 2025, which started a twelve-month transition period. Companies House is explicit that 18 November 2025 is not itself a deadline, and it has not published a hard cut-off — your real deadline is your company’s next confirmation statement, at which existing directors provide their Companies House personal code, separately for each company they direct. Non-compliance is an offence, and you cannot make filings or start a new company without it.
Frequently asked questions
Do all company directors have to file a Self Assessment tax return?
No. Being a director is not itself a filing trigger, and HMRC’s guidance on directors’ responsibilities no longer says it is. Most directors file because of dividends above their allowances, benefits in kind or a director’s loan.
What is the dividend allowance for 2026/27?
£500. Dividends above the allowance are taxed at 10.75% for basic rate taxpayers, 35.75% for higher rate and 39.35% for additional rate. These rates increased on 6 April 2026 — for 2025/26 the basic and higher rates were 8.75% and 33.75%.
Do I need to declare a director’s loan on my tax return?
Yes, if you owed the company more than £10,000 at any point in the year, or if you paid interest below HMRC’s official rate. You may have tax to pay on the benefit. If the loan is written off rather than repaid, you pay Income Tax on it through Self Assessment.
Can I stop filing Self Assessment as a director?
If none of the triggers apply, yes — but you must tell HMRC using their online form to close your record or be removed for a specific year. Until HMRC withdraws the notice to file, a return is still legally due and a £100 penalty applies if it is not sent.
Does taking only a salary mean I do not need a tax return?
Usually, provided the salary is within your personal allowance, there are no benefits in kind, no director’s loan and no other untaxed income. Check all four before you assume there is no requirement.
Getting a director’s return right
The tricky part for most directors is not the arithmetic — it is knowing which of the company’s transactions actually land on the personal return. Loan account movements, benefits, and dividends voted but not paid all need to be picked up correctly, and they are the items HMRC looks at.
SmartFiling files Self Assessment returns for directors for a fixed fee, with a three-week turnaround from receiving your records. Every return is reviewed and signed off by an ICAEW Chartered Accountant, and the whole process is online.
