Requirements to report dividends from close companies (by RTI?) from 2025/2026

[matzie]

Article on AccountingWeb this morning may be of interest:

https://www.accountingweb.co.uk/tax/...in-three-areas

- exact hours worked by each employee
- who operates through their own company, and what dividends they receive from that company
- when self-employed traders start and finish their businesses.

HMRC has not been clear about why it needs a breakdown of dividend income between that generated from the taxpayer’s own company and dividends from other sources. As it also wants the taxpayer to report what percentage of the company’s shares the individual owns, leads me to assume that this data grab is designed to target personal service companies which may not be applying the IR35 rules correctly.

HMRC has confirmed that only directors of close companies will be required to provide this dividend breakdown and shareholding data, but that still leaves these outstanding questions:

1. Why is this information needed by HMRC?
2. How will the regulations define ‘owner-managed business’?
3. What will the taxpayer have to provide in terms of the percentage of shareholding?

[Peoplesoft bloke]

The exact hours is for Min wage I think - not sure why but someone at HMRC has convinced the high-ups to spend big on trying to catch out as many employers as possible for technical min wage breaches.

[Peoplesoft bloke]

As for divis stuff - I expect it's to help them mine data for targeted attacks on IR35, given their woeful success rates using whatever selection criteria they currently have, but who knows?

[hobnob]

Hopefully the bit about "exact hours worked" won't apply to contractors who work outside IR35 (since we're not employees of our limited companies). However, it will presumably affect people who are working through umbrella companies.

For my current contract (inside IR35), I have to list my hours as well as days when I submit my timesheet through Hays. It says "Please enter the hours worked as per the HMRC regulations", and I assume that this is something to do with the EU working time directive, i.e. to make sure that I'm not exceeding 48 hours per week. This doesn't affect my payslip from the umbrella, i.e. I get minimum wage for 37.5 hours regardless of what I type in. However, the simple solution would be for the agency to share the hours with the umbrella when the new rules come in.