HMRC targets company shareholders

HMRC is in the process of writing to some individuals defined as a ‘Person of significant control’ (PSC) to raise awareness of potential tax liabilities and to help ensure their self-assessment tax returns are completed correctly for 2025-26.

The letters explain that an individual may be a PSC if they hold more than 25% of a company’s shares or voting rights, have the right to appoint or remove most of its directors or exercise significant influence or control over the company. HMRC stresses that the letter is an awareness campaign and is not a formal compliance check.

The letter highlights several situations that may have personal tax implications, including using company funds to pay personal expenses, using company assets without paying the market rate, transferring assets between an individual and their company, receiving interest-free or low-interest loans, exercising share options and disposing of shares, property or other assets.

HMRC is asking recipients to review their tax position and take the following action before 31 January 2027:

• Check their 2025/26 tax return. Ensure that any relevant income, benefits and transactions are reported correctly. The filing deadline is 31 January 2027.
• Review tax returns for earlier years. If errors are identified, taxpayers should amend their 2024-25 tax return and/or make a voluntary disclosure to HMRC for 2023-24 and earlier years. This could result in additional tax being due as well as interest and potentially penalties. The letter also states that any future disclosure relating to the issues raised by the letter will be treated as prompted, which may affect the penalties charged.

If you have received a letter from HMRC and are unsure whether your tax returns are correct or whether a disclosure is needed, we can help you review your position and discuss the appropriate next steps.