From new self-assessment reporting requirements to mandatory payrolling of benefits, the 2025/26 tax year introduces several practical changes that accountants should prepare for now.

The latest webinar with Autumn Murphy and Chris Campbell from the Association of Taxation Technicians (ATT), Bookkeeping 2026 - Self-assessment Tax Returns and Employment Taxes Update, highlighted the areas most likely to affect tax return preparation, payroll processes and client conversations over the coming year.

Here are the key practical takeaways.

1. Self-assessment returns now require additional information

One of the biggest changes for the 2025/26 tax return is the introduction of mandatory additional information in several areas of the return.

While some of the boxes already existed, they must now be completed. Leaving them blank may result in a £60 penalty, even where the answer is simply "No".

The new mandatory reporting covers:

• Business commencements and cessations
• Company directorships
• Additional information for directors of close companies

Although most commercial tax software should populate these fields automatically, firms should still build checks into their review process.

2. Directors face new reporting obligations

Directors already completing a self-assessment return will need to provide additional details about their directorships.

Where the company is a close company, additional information includes:

• Company name
• Company registration number
• Dividend income received from that company
• Maximum percentage of nominal share capital held during the tax year

The webinar highlighted that the legislation uses broad definitions of both director and company, meaning some individuals may be caught unexpectedly.

For example, someone acting as a director without formal appointment could still fall within the reporting requirements depending on their role. Similarly, certain non-profit organisations may fall within the legislative definition of a company.

HMRC guidance is still evolving in some of these areas, so advisers should monitor future updates before filing returns.

3. Share capital reporting may produce unexpected results

One of the more technical changes involves reporting the maximum percentage of nominal share capital held during the year.

This differs from concepts accountants commonly use elsewhere in tax legislation.

For example, preference shares with fixed dividend rights are included when calculating nominal share capital, even though they are often ignored when considering ownership for other tax reliefs.

That means clients who believe they own 50% of a company may find the reported percentage is very different once all share classes are taken into account.

This is likely to be an area where clients need additional explanation before returns are submitted.

4. Winter Fuel Payment clawback will affect some taxpayers

For taxpayers born before 22 September 1959, Winter Fuel Payments may now be clawed back where gross income exceeds £35,000, unless qualifying benefits apply.

Where clients already complete self-assessment returns, the clawback will now form part of the return.

Practices should consider asking eligible clients whether they received a Winter Fuel Payment, rather than assuming the position.

For clients whose income consistently exceeds the threshold, opting out of future payments may reduce unnecessary administration.

5. Most tax thresholds remain frozen

The webinar confirmed that many familiar thresholds remain unchanged, including:

• Personal allowance
• Higher-rate threshold
• Additional-rate threshold
• Most National Insurance thresholds

The practical effect remains the same: more taxpayers are gradually moving into higher tax bands through fiscal drag.

The presenters also noted that the full State Pension is expected to exceed the personal allowance, meaning some pensioners will have taxable State Pension income. HMRC has confirmed this will not be collected through Simple Assessment, although the collection mechanism has yet to be confirmed.

6. Company car and employment tax changes continue

Several employment tax developments were highlighted.

For company cars:

• The benefit-in-kind percentage for fully electric cars increases from 3% to 4%.
• Double-cab pickups continue to be treated as cars under rules introduced in April 2025, resulting in higher benefit-in-kind charges for many employers and employees.

The presenters also discussed changes affecting:

• Flu vaccine exemptions
• Employer-provided eye tests and corrective eyewear
• Homeworking equipment
• Homeworking expense relief
• Approved mileage rates

One welcome change is the increase in HMRC's approved mileage allowance for cars and vans from 45p to 55p per business mile for the first 10,000 business miles, backdated to April 2026.

7. Mandatory payrolling of benefits is getting closer

Mandatory payrolling of benefits has been delayed until April 2027, giving employers more time to prepare.

Initially, the requirement will apply to:

• Company cars and fuel
• Company vans and fuel
• Private medical insurance and treatment

Other benefits are expected to follow from April 2028, while loans and living accommodation will be introduced later.

Although the deadline has moved, preparation should begin well before April 2027.

Employers may need to:

• Review payroll software
• Work with benefit providers to obtain information earlier
• Decide whether to voluntarily payroll benefits that are not yet mandatory
• Update payroll processes for real-time reporting

Firms supporting payroll clients should start these conversations early, as collecting benefit information throughout the year represents a significant operational change.

Practical takeaway

Many of the changes discussed are not fundamentally new tax rules. Instead, they introduce additional reporting requirements, updated payroll processes and new administrative obligations.

For accountants, the priority is ensuring review procedures, client questionnaires and payroll processes are updated before filing season begins.

Small omissions—such as leaving a mandatory field blank—may now carry penalties, while larger changes such as mandatory payrolling will require firms and employers to adapt their systems well in advance.

Frequently Asked Questions

Do directors need to provide additional information on the 2025/26 self-assessment tax return?

Yes. Directors who are already required to file a self-assessment tax return may need to provide additional information about their directorships. Where they are directors of a close company, they may also need to report the company name, company registration number, dividend income received from that company and their maximum percentage of nominal share capital during the tax year.

What happens if the new self-assessment information boxes are left blank?

The additional information fields are now mandatory for the 2025/26 tax year. Even where the answer is "No", the relevant boxes should still be completed. The webinar highlighted that failing to complete mandatory fields may result in a £60 penalty. Firms should therefore ensure these fields are included in their review process before submitting returns.

How is share capital calculated for the new director reporting requirements?

The reporting requirement uses the percentage of nominal share capital held during the tax year rather than the ordinary share capital definition used elsewhere in tax legislation. This means preference shares and other share classes may affect the reported percentage, even where voting rights remain unchanged. Accountants should review company share structures carefully before completing returns.

Who is affected by the Winter Fuel Payment clawback?

The clawback applies to individuals born before 22 September 1959 who receive a Winter Fuel Payment and whose gross income exceeds £35,000, unless they qualify for certain exempting benefits. Where the individual completes a self-assessment tax return, the clawback will need to be reported as part of that return.

When does mandatory payrolling of benefits begin?

Mandatory payrolling of benefits is due to begin in April 2027 using a phased approach. Initially, the requirement will apply to company cars, company vans, fuel benefits and private medical insurance or treatment. Other benefits are expected to follow from April 2028, while loans and living accommodation will be introduced later.

Should employers prepare for mandatory payrolling before April 2027?

Yes. Employers should review their payroll systems well before the implementation date. They may also need to work with benefit providers to obtain benefit information throughout the year rather than after the year end. Early preparation should make the transition to mandatory payrolling more straightforward.

What are the approved mileage rates for employees using their own cars?

The webinar explained that the approved mileage allowance for cars and vans increased to 55p per business mile for the first 10,000 business miles from April 2026. The rate above 10,000 business miles remains 25p per mile. Employees may be able to claim tax relief where employers reimburse less than the approved rate.

Have income tax thresholds changed for the 2025/26 tax year?

Most income tax thresholds remain frozen, including the personal allowance and the higher-rate threshold. The presenters noted that this continues the effect of fiscal drag, bringing more taxpayers into higher tax bands over time.

Can employees still claim tax relief for homeworking expenses?

The rules have changed. Where an employer reimburses qualifying homeworking expenses, the payment can remain exempt from tax. However, where the employer does not reimburse those expenses, employees can no longer claim tax relief directly from HMRC under the previous rules.

Do dormant company directors need to complete the new reporting requirements?

The presenters explained that the additional reporting requirements can still apply to directors of dormant companies if they are otherwise required to complete a self-assessment return. A separate employment page may be required for each directorship, even where no remuneration has been received. HMRC guidance in this area should be monitored for any future clarification.

The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.