Being a company director means wearing a lot of hats. You’re running the business, managing people, chasing invoices — and somewhere in the middle of all that, you’re also supposed to file a Self Assessment tax return every year.
For a lot of directors, the return itself feels straightforward. You know your salary, you know your dividends, and you submit the figures. But there’s quite a bit that gets missed — not out of dishonesty, just out of not knowing what’s supposed to be included.
This article runs through the key things directors need to report, the things people commonly forget, and how to make sure your return is complete and correct before the 31 January deadline.
Why Directors Have to File Self Assessment
As a director of a limited company, you’re legally required to complete a Self Assessment tax return, even if you’re also on the company payroll and PAYE has already been deducted from your salary.
The reason is that directors often receive income in ways that PAYE doesn’t capture — most commonly, dividends. HMRC uses Self Assessment to calculate any additional tax you owe on top of what’s already been collected.
You’ll also need to report any benefits or expenses provided by the company, which we’ll come on to shortly.
If you’re looking for practical support with this, an experienced accountant for tax return can take the whole thing off your plate and make sure nothing gets missed.
Dividends: The Basics and What to Watch For
Most directors of owner-managed companies pay themselves a combination of a low salary and dividends. This is tax-efficient because dividends are taxed at lower rates than income — but they still need to be declared.
For the 2025/26 tax year, the dividend allowance is £500. Anything above that is taxed as follows:
- Basic rate taxpayers pay 8.75% on dividends
- Higher rate taxpayers pay 33.75%
- Additional rate taxpayers pay 39.35%
It’s worth reading our article on UK dividend tax for 2025/26 for a full breakdown of the allowances and how they interact with your other income.
One thing directors regularly get wrong: they only declare dividends they’ve actually drawn into their personal bank account. But if dividends have been voted by the board and recorded in the minutes, they may be taxable in the year they were declared — not just when the money was transferred. Your accountant can help you work out the timing.
If you’re still deciding on the best way to structure your pay, our guide on director pay — salary vs dividends in 2026 is well worth reading before you finalise anything.
Benefits in Kind: The P11D Problem
If your company provides you with anything of value beyond your salary and dividends, it may need to be reported as a benefit in kind. HMRC requires employers to report these on a form called a P11D, and directors need to include the figures from that form in their Self Assessment return.
Common benefits that get overlooked include:
- Company cars — The taxable value depends on the car’s list price and CO2 emissions. Even if you only use the car occasionally for personal journeys, it may still be reportable.
- Private medical insurance — If the company pays for your health cover, the premiums are generally treated as a benefit in kind.
- Interest-free or low-interest loans from the company — If your director’s loan account is overdrawn and the loan exceeds £10,000 at any point during the year, there’s a benefit in kind charge to declare.
- Gym memberships, phones, and other perks — Some of these are exempt, but many aren’t. It depends on the specific arrangement.
Missing a P11D benefit doesn’t just mean underpaying tax — it can also lead to HMRC interest and penalties. Our article on what is a director’s loan and how does it work goes into more detail on the tax implications of overdrawn loan accounts.
What People Forget to Include
Beyond dividends and benefits, here are the other things that regularly get left off a director’s Self Assessment return:
Salary from the company. Even if you’re on PAYE and tax has been deducted at source, your employment income still needs to appear on your return. Directors sometimes assume that because tax has already been taken, it doesn’t need to be reported. It does.
Interest on savings. If you receive more than £1,000 in savings interest (or £500 if you’re a higher rate taxpayer), you need to declare it. The personal savings allowance has been squeezed significantly for higher earners.
Rental income. If you’re renting out a property, even just a spare room above the Rent a Room Scheme threshold of £7,500, you need to report it.
Income from other sources. Freelance work, consultancy fees paid personally rather than through the company, or income from a side project — all of this needs to go on your return.
Pension contributions. These don’t add to your tax bill, but they do affect your tax relief. Making sure they’re correctly recorded can reduce what you owe.
Foreign income. If you have income from abroad — whether from investments, work, or property — it generally needs to be declared, even if it’s already been taxed overseas.
Good bookkeeping services for small businesses throughout the year make it far easier to gather all of this when the time comes, rather than trying to piece it together in January.
The Year-End Accounts Connection
Your Self Assessment return and your company accounts are separate documents, but they’re closely linked. Your salary and dividends need to be consistent with what’s recorded in the company’s books and approved by the directors.
If the company’s year-end accounts haven’t been finalised before you submit your personal return, you might find yourself having to amend it later — which is possible, but inconvenient. Our post on amending a tax return explains how that process works.
This is one of the reasons why having the same firm handle your company accounts and your personal tax return makes a lot of sense. Everything is joined up, and there’s less room for inconsistency.
If you’re a Slough accountant client of ours, we handle both as part of a joined-up service — so you’re not having to brief two different firms on the same set of numbers.
Deadlines and Penalties
The Self Assessment filing deadline for online returns is 31 January following the end of the tax year. So for the 2024/25 tax year, the deadline is 31 January 2026.
Missing that deadline results in an automatic £100 penalty, with further charges if you’re more than three months late. Interest also accrues on any unpaid tax from the 31 January payment deadline.
Our article on late tax returns and penalties goes through the full penalty structure — it’s worth knowing what you’re up against if you’ve already missed a deadline.
The other date to note is 5 October — this is the deadline to register for Self Assessment if you haven’t done so before. New directors who don’t register in time can face penalties before they’ve even filed anything.
How a Good Accountant Makes This Easier
Working with accountants for small businesses who understand how limited companies operate means you’re not navigating all of this alone.
A good accountant will:
- Pull together your salary, dividends, and P11D data in one place
- Flag any additional sources of income you may have forgotten
- Calculate whether you have any payments on account to budget for
- Submit the return on your behalf before the deadline
- Keep your financial reporting up to date throughout the year so there are no nasty surprises
If you’re based in Berkshire or the wider South East, our accountants in Reading office can support you in person, and we also work with directors across the country online.
We use QuickBooks to keep everything organised — and as a Certified QuickBooks accountant practice, our team knows exactly how to set it up so your records match what HMRC expects to see.
FAQs
Do I have to file Self Assessment if I’m a director but don’t take a salary? Yes, in most cases. HMRC requires directors to file a Self Assessment return regardless of whether they’ve taken a salary or drawn any dividends. There are some exceptions, but they’re narrow — it’s always worth checking.
What’s the difference between a dividend and a salary for tax purposes? A salary is subject to Income Tax and National Insurance through PAYE. A dividend is taxed at different rates through Self Assessment, and there’s no National Insurance on dividends. The combination of a low salary and dividends is one of the main reasons directors structure their pay the way they do.
What happens if I forget to declare a benefit in kind? HMRC can open an enquiry and charge you the unpaid tax, plus interest and potentially a penalty depending on whether the error was careless or deliberate. If you’ve missed something, it’s usually better to amend the return voluntarily than wait to be found out.
Can I claim expenses on my Self Assessment? Yes, if you’ve incurred costs that are wholly and exclusively for the purpose of your employment or self-employment and they haven’t been reimbursed by the company. The rules around what qualifies are fairly strict, so it’s worth checking with your accountant.
Do I need to include my spouse’s dividend income on my return? No — each individual files their own Self Assessment. If your spouse is also a shareholder and receives dividends, they’ll need to file their own return separately.
Let’s Make Your Tax Return Straightforward
Director Self Assessment doesn’t have to be stressful. With the right support in place, it’s a matter of gathering your information, checking everything is consistent with the company’s records, and submitting on time.
At Asmat & Co, we look after directors across a wide range of industries — from contractors and consultants to retail businesses and property investors. We handle the whole process from start to finish, including your company accounts, payroll, and VAT.
