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Changes to the 2025–2026 Self-Assessment Tax Return for Company Directors

If you are a director of a close company, HM Revenue and Customs (HMRC) now require you to include additional details in the employment section of your self-assessment tax return.

You must provide:

The company name and registration number

The total dividends you received from that close company during the tax year (reported separately from other UK dividends)

Your percentage shareholding in the company  - if shareholding changed during the year, the highest percentage will need to be reported.

Failure to include this information may result in a £60 penalty.

A close company is defined by HMRC as a UK-resident company controlled by five or fewer individual shareholders.

If your company has multiple share classes, you should report your shareholding based on the highest level of control or rights you held at any point during the year.

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Minimum Wages Changes From 1st April 2026

The National Minimum Wage Rates (for those at least school leaving age) /National Living Wage Rates (for those aged 21 and over)  increased from the 1st April 2026

The new rates are:-

21 and over - £12.71

18 to 20 - £10.85

Under 18 - £8.00

Apprentice - £8.00

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

aged under 19

aged 19 or over and in the first year of their apprenticeship

Student and postgraduate loan

Student loans thresholds and rates

The new student loan plan and postgraduate loan thresholds and rates from 6 April 2026 are:

Plan 1 — £26,900 

Plan 2 — £29,385

Plan 4 — £33,795 

Plan 5 — £25,000

postgraduate loan — £21,000

Deduction rates from 6 April 2026 for:

Plans 1, 2, 4 and 5 remain at 9% for any earnings above the respective thresholds

postgraduate loan remains at 6% for any earnings above the threshold

Small Employers’ Relief compensation rate increased from 8.5% to 9%

The rate increased to 9% on 6 April 2026. Employers who qualify for Small Employers’ Relief  (have paid £45,000 or less in Class 1 National Insurance contributions) can reclaim 100% of all statutory payments they pay, plus an additional 9% compensation. This means small employers can now reclaim 109% from HMRC. The only exception is Statutory Sick Pay, which cannot be reclaimed.

The compensation rate applies to:

Statutory Maternity Pay

 Statutory Paternity Pay

Statutory Adoption Pay

Statutory Parental Bereavement Pay

Statutory Neonatal Care Pay

Shared Parental Pay

All other employers, paying Class 1 National Insurance contributions, can reclaim 92% of what they pay in these statutory payments.

Reporting expenses and benefits for the tax year ending 5 April 2026

P11D and P11D(b) deadlines

For those employers who do not yet payroll expenses and benefits, the deadline for reporting P11D(b) Class 1A National Insurance contributions, P11D expenses, and benefits in kind provided in the tax year 2025 to 2026, is 6 July 2026.

All P11Ds and P11D(b) for the tax year 2025 to 2026 must be filed online and at the same time.

Late submission may result in a penalty. HMRC charge penalties on a monthly basis and issue penalty notices each quarter until a return is received.

P11D(b)

You need to submit a P11D(b) form if:

you have submitted any P11D forms

you have paid any employees’ expenses or benefits through your payroll

HMRC has asked you to file a P11D(b) form, by sending you a notification to do so

Your P11D(b) form tells HMRC how much employers’ Class 1A National Insurance contributions you need to pay on all the expenses and benefits you have provided to your employees through your payroll, as well as any you have reported to HMRC on a P11D form.

Nothing to declare

You only need to make a declaration if HMRC has asked you to submit a P11D(b) and you have nothing to declare.

The official rate of interest from 6 April 2026

The official rate of interest (ORI) will remain at 3.75% from 6 April 2026.

As announced at Autumn Budget 2024, the ORI will now be reviewed quarterly to assess whether it should be increased, decreased or maintained. Any adjustments will take effect on:

6 April 2026

6 July 2026

6 October 2026

6 January 2027

The ORI is used to calculate the Income Tax charge on the benefit of employment-related loans and the taxable benefit of some employment-related living accommodation.

High Income Child Benefit Charge

If you have employees who receive Child Benefit and earn between £60,000 and £80,000, they may need to pay the High Income Child Benefit Charge (HICBC).

HMRC have launched a new digital service that makes paying this charge easier than ever. Customers can now pay through their salary — no need to register for Self Assessment or submit a tax return.

Those who are eligible to use the new digital service, are:

new parents who are paying the charge for the first time

customers who have begun a partnership with someone claiming Child Benefit

customers who have recently had a pay rise pushing them over the threshold for the first time

Your employees may already be paying the charge through Self Assessment. If this is the only reason for them completing a tax return, they may be able to switch to the new service. They need to simply call HMRC once to deregister from Self Assessment.

Statutory Sick Pay changes

From 6 April 2026 the Employment Rights Act 2025 introduced changes to Statutory Sick Pay (SSP) that affect most employers.

Removal of the Lower Earnings Limit

All eligible employees are now entitled to SSP regardless of income. SSP is paid at 80% of normal weekly earnings or the weekly flat rate of £123.25, whichever is lower.

Removal of the waiting period

SSP is now paid from the first full day of sickness absence, not from day four.

These changes make SSP more accessible, remove barriers for lower-paid employees, and apply across the United Kingdom, including Northern Ireland. The relevant legislation applies based on when the sickness absence started.

Absences that started on or after 6 April 2026 will use the new rules. Absences that started before 6 April 2026 will follow the previous process to determine eligibility and payment unless otherwise outlined in legislation.

What employers need to do now

HMRC shared technical guidance, including on transitional protections with software developers and payroll providers to help them apply these changes. You may wish to discuss these changes with your payroll provider, particularly if you run your own payroll or have not recently updated your systems.

Prepare for Parental Leave and Pay changes

From 6 April 2026, the Employment Rights Act 2025 introduced changes to parental leave. Eligible employees can also take Bereaved Partner’s Paternity Leave from 6 April 2026.

Employers should make sure that they are aware of the changes and that employees can access their entitlements. As part of the transition to the new rules, some notice periods for Paternity Leave have been temporarily adjusted.

Read about new employment rights, including guidance for business and workers on business.gov.uk.

Paternity Leave

Paternity Leave is now available from ‘Day 1’ of employment. This means an employee can give notice of their intention to take Paternity Leave from the first day of employment.

There is no change to eligibility for Statutory Paternity Pay. Employees must still have worked continuously for their employer for 26 weeks to be eligible for pay.

A shortened notice period will apply for employees with an expected week of childbirth between 5 April 2026 and 25 July 2026. Employees who become eligible for Paternity Leave because of these changes can give 28 days’ notice to take leave.

The usual 15‑week notice period applies for expected week of childbirths from 26 July 2026 onward. Notice rules for adopters and for parents who qualified before 6 April 2026 are unchanged.

Unpaid Parental Leave

Unpaid Parental Leave is also now available from ‘Day 1’ of employment. This means an employee can give notice of their intention to take unpaid Parental Leave from the first day of employment.

The existing 21‑day notice requirement applies.

Shared Parental Leave

Employees who are fathers or partners can now take Paternity Leave and Pay after Shared Parental Leave and Pay, if they choose to do so.

Bereaved Partner’s Paternity Leave

Bereaved Partner’s Paternity Leave allows employed fathers and partners to take up to 52 weeks of unpaid leave if the mother or primary adopter dies before their child turns one.

Bereaved Partner’s Paternity Leave is available from ‘Day 1’ of employment and can be taken by eligible employees whose partner died on or after 6 April 2026.

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Companies House And The New Verification Rules

Companies House is introducing mandatory identity verification for individuals setting up, running, owning, or controlling a company in the UK. 

This measure aims to deter illegal activities and enhance the integrity of the company register. 

The verification process will be rolled out in phases, with voluntary verification starting in April 2025 and becoming mandatory for certain roles by Autumn 2025. 

Minimum Wages Changes From 1st April 2025

The National Minimum Wage Rates (for those at least school leaving age) /National Living Wage Rates (for those aged 21 and over)  Increase From 1st April 2025

The new rates are:-

21 and over - £12.21

18 to 20 - £10.00

Under 18 - £7.55

Apprentice - £7.55

Student Loan Thresholds

The new student loan plan and postgraduate loan thresholds and rates from 6 April 2025 are:-

Plan 1 - £26065

Plan 2 - £28470

Plan 4 - £32745

Postgraduate Loan - £21000

Deductions for:

Plans 1, 2 and 4 remain at 9% for any earnings above the respective thresholds

Postgraduate loan remains at 6% for any earnings above the respective threshold

If the employee’s earnings are:

below the respective student loan and postgraduate loan thresholds, you should update the employee’s payroll record to show they have a student loan and or postgraduate loan and file the start notice — you do not need to return this to HMRC

above the respective student loan and postgraduate loan thresholds, and deductions have not been taken, HMRC will send a generic notification service prompt as a reminder — if deductions still have not started, we may contact you directly

Deductions should continue until HMRC notifies you to stop.

The Official Rate of Interest from 6th April 2025

Following HMRC’s announcement in March 2025, the Official Rate of Interest (ORI) increased from 2.25% to 3.75% on 6th April 2025.

The ORI is used to calculate the Income Tax charge on the benefit of employment-related loans and the taxable benefit of some employment related living accommodation.

As announced at Autumn Budget 2024, the ORI may increase, decrease or be maintained following quarterly reviews. If there are any changes to the rate, these will take effect on 6th April, 6th July, 6th October and 6th January.

Tax Treatment of Double Cab Pickups

The tax treatment of double cab pickups  with a payload of one tonne or more have changed for the purposes of capital allowances, benefit in kind and some deductions from business profits. The tax treatment of DCPUs of less than a tonne, generally classed as cars, remains unchanged.

HMRC no longer applies the one-tonne payload test in determining whether a DCPU is primarily suited for the conveyance of goods or burden. A vehicle must be assessed as a whole at the point that it is made available to determine whether the vehicle’s construction has a primary suitability.

DCPUs, including models often referred to as extended, extra, king, or super cab pickups, commonly consist of:

A front passenger cab that contains a second row of seats and is capable of seating about 4 passengers, plus the driver

4 doors, whether the rear doors are hinged at the front or the rear — 2 door versions are normally accepted to be vans

A separate cargo area behind the passenger cab

 Transitional arrangements for benefits in kind

Employers that have purchased, leased, or ordered a DCPU before 6th April 2025 will be able to use the previous treatment where a DCPU with a payload of one tonne or more will be classified as a van, until the earlier of disposal, lease expiry, or 5th April 2029.

Transitional arrangements for capital allowances 

Expenditure incurred on or after 1st April 2025 for Corporation Tax purposes and 6th April 2025 for Income Tax purposes as a result of contracts entered into before those dates, and where the expenditure is incurred before 1st October 2025, are unaffected.

The current one-tonne payload test included in VAT legislation and applied for input tax recovery purposes remains unchanged.

Capital Gains Tax — Work Out Your Adjustment For The 2024 To 2025 Tax Year

At the Autumn Budget 2024, the government announced changes to the main rates of Capital Gains Tax (CGT).   

For the 2024 to 2025 tax year individuals, trustees and personal representatives will need to take additional steps to calculate their CGT if they made disposals on or after 30th October 2024.

This excludes:

Residential property

Business Asset Disposal Relief

Investors Relief

Carried interest

This will make sure the new rate of tax is correctly accounted for in the 2024 to 2025 Self Assessment return.

Employer National Insurance Changes From 6th April 2025

Contribution rate increases

The employer secondary Class 1 National Insurance contributions rate has increased to 15% from 13.8%. 

The associated Class 1A and 1B National Insurance contributions rates on expenses and benefits given to employees also increased to 15%.

Secondary threshold for employer National Insurance liability is now lower

The secondary threshold is the point at which employers start to pay employer National Insurance contributions on an employee’s salary. The secondary threshold decreased from £9,100 to £5,000 per year.

Employers now need to pay employer National Insurance contributions where they employ staff earning £5,000 a year or more, and report these payments to HMRC, from 6th April 2025.

Employment Allowance Changes

From 6th April 2025, the £100,000 threshold was removed. The EA was previously restricted to employers with National Insurance contributions bills of less than £100,000 in the previous tax year.

The maximum amount of EA also increased from £5,000 to £10,500, which means more eligible businesses will be able to claim, and at an increased amount. There have been no other changes to the EA eligibility criteria. 

Most businesses or charities can apply for EA. However, they cannot do so if they are a public body or a business whose activities wholly or mainly involve the performance of functions which are of a public nature. Whether these functions are publicly funded can indicate functions of a public nature, but funding alone is not the deciding factor.

Businesses will need to continue to consider if they are a connected company. If, at the start of the tax year, 2 or more companies are connected with each other, only one of those companies can qualify for the EA for that tax year.

If the company has just one director and that director is the only employee liable for secondary Class 1 National Insurance contributions, they are also ineligible.

Abolition of the £100,000 EA threshold also means that from 6th April 2025, employers will no longer need to consider state aid where they had previously done so because of the threshold restriction.

Small Employers’ Relief Compensation Rate Increased To 8.5%

The rate increased to 8.5% on 6th April 2025, as a result of aligning it with changes to employer National Insurance contributions.

Employers who qualify for Small Employers’ Relief — if they have paid £45,000 or less in Class 1 National Insurance contributions, can reclaim 100% of all statutory payments they pay except Statutory Sick Pay which cannot be reclaimed, plus an additional 3% compensation. This means small employers can now reclaim 108.5% from HMRC.

The compensation rate applies to:

Statutory maternity

Statutory paternity

Statutory adoption

Statutory parental bereavement

Statutory neonatal care

Shared parental pay

All other employers, paying Class 1 National Insurance contributions, can reclaim 92% of what they pay in these statutory payments with the exception of statutory neonatal care pay.

P11D and P11D(b) Deadlines

For those employers who do not yet payroll, the deadline for reporting P11D(b) Class 1A National Insurance contributions, P11D expenses, and benefits in kind provided in the 2024 to 2025 tax year, is 6th July 2025.

Your P11Ds and P11D(b) must be filed online and at the same time.  

Late submission may result in a penalty.  

All P11D and P11D(b) forms must be filed online. We recommend you file using one of the following methods:

P11D(b)

You need to submit a P11D(b) form if:

You have submitted any P11D forms

You have paid any employees’ expenses or benefits through your payroll

HMRC has asked you to file a P11D(b) form, by sending you a notification to do so

Your P11D(b) form tells HMRC how much employers’ Class 1A National Insurance contributions you need to pay on all the expenses and benefits you have provided to your employees through your payroll, as well as any you have reported to HMRC on a P11D form.

Nothing to declare

If HMRC has asked you to submit a P11D(b) form and you have nothing to declare, you can tell us you do not owe any employers’ Class 1A National Insurance contributions by completing a no return of Class 1A National Insurance contributions form. Only use this declaration if HMRC has asked you to submit a P11D(b) and you have nothing to declare.

For those employers payrolling benefits in kind

If you are payrolling benefits in kind, you may still have a Class 1A National Insurance contributions liability and will still need to submit a P11D(b) form to tell us how much employer Class 1A National Insurance contributions you owe. You will also need to submit online P11D forms to show any benefits you paid that you did not payroll. Further information on payrolling your employees benefits and expenses is available. You can payroll all benefits and expenses except:

Employer provided living accommodation

Interest free and low interest (beneficial) loans

Joint beneficial loans   

If you provide joint beneficial loans to your employees, remember to divide the total cash equivalent figure by the number of employees on the joint beneficial loan. Use this final figure to complete the cash equivalent for each employee on their P11D before you file your returns.  

If the final cash equivalent figure is nil, record this as £0.00 on the P11D before submission.