On 19 March 2026, HMRC quietly published one of the most significant consultations for small business owners in years. It’s called Reporting Company Payments to Participators, and if you run a limited company, you need to know about it.
The deadline to respond is 10 June 2026. After that, the window closes.
What HMRC Is Proposing
In short: HMRC wants every close company to report detailed information about every transaction between the company and its directors or shareholders (known in tax law as “participators”).
A close company is one controlled by five or fewer shareholders, or by any number of shareholders who are also directors. That covers the vast majority of UK limited companies — if you’re a director-shareholder running your own business, this almost certainly includes you.
The transactions HMRC wants reported include:
- Cash withdrawals — any money you take out of the company
- Bank transfers — between company and personal accounts
- Dividends — every dividend payment, with dates and amounts
- Loans — director’s loan account movements in both directions
- Asset transfers — purchases or sales of assets through the company
- Any other transfer of value — a deliberately broad catch-all
For each transaction, they want the amount, the date, and the recipient’s name, address and National Insurance number.
The only exception? Salary and employment income already reported through RTI (Real Time Information) — your regular PAYE submissions.
Why This Matters
Currently, the main reporting touchpoint between a close company and HMRC on participator transactions is the CT600A supplementary page — and that only applies when there’s a Section 455 tax charge on an outstanding director’s loan. Beyond that, HMRC largely relies on the company’s accounts and the director’s personal tax return.
This consultation proposes something fundamentally different: transaction-level reporting. Not a summary. Not a year-end balance. Every individual movement of money between you and your company, reported to HMRC with identifying details.
HMRC’s justification is the small business Corporation Tax gap, which they say has been growing since 2011-12 and now stands at £14.7 billion — representing 40.1% of the small business theoretical CT liability for 2023-24. They argue that the “blurring of boundaries” between close companies and their owners enables both genuine mistakes and deliberate non-compliance.
The Practical Impact on Small Businesses
Let’s be direct about what this means in practice.
If you’re a director-shareholder who takes a modest salary and quarterly dividends, keeps a tidy director’s loan account, and has a good accountant — you’re probably already keeping records that would satisfy most of this. The additional burden is the reporting of it to HMRC, not the record-keeping itself.
But for the hundreds of thousands of owner-managers who run their companies less formally — who transfer money between personal and company accounts as needed, who don’t always document every movement in real time, or who rely on their accountant to sort everything out at year end — this could be a significant step change.
Consider the typical sole director of a small consultancy or trade business. They might have dozens of transactions a month flowing between company and personal accounts: expenses paid on personal cards, company funds used for mixed purposes, informal loans in both directions. Under these proposals, every single one of those would need to be identified, categorised, and reported — with the director’s NI number attached.
The ICAEW has noted that HMRC hasn’t yet decided on the reporting frequency — it could be annual (aligned with the company tax return) or potentially more frequent, even real-time. They’ve also flagged that the normal penalty regime would apply, with the possibility of specific penalties for deliberately omitted transactions.
The Bigger Picture
This consultation didn’t appear from nowhere. It was announced at Budget 2025, and it fits into a broader pattern of HMRC tightening oversight of small companies:
- From April 2025, directors of close companies are already required to include additional information in their personal tax returns, including company details, dividends received, and shareholdings
- HMRC confirmed that Making Tax Digital will not be extended to Corporation Tax — but this consultation shows they’re finding other ways to increase the data they collect
- The consultation explicitly states that HMRC “expects to explore other ways in which to address the small business CT gap in the future”
In other words, this is likely the beginning, not the end.
What You Should Do
1. Read the consultation. It’s available in full on GOV.UK. It’s written in reasonably plain English and runs to about 20 questions.
2. Respond. HMRC has specifically said they want to hear from business owners directly — not just accountants and professional bodies. You don’t have to answer every question. Even a partial response focused on the areas that affect you most is welcome. You can submit your response via this form or email closecompanyconsultation@hmrc.gov.uk.
3. Talk to your accountant. Ask them whether they’re aware of this consultation and whether they’re responding on behalf of clients. If they’re not, that’s worth knowing.
4. Consider the proportionality. If you believe the level of transaction-by-transaction reporting being proposed is disproportionate for a small business with straightforward affairs, say so. That’s exactly the kind of feedback HMRC is asking for. Consultations genuinely can shape outcomes — but only if people engage with them.
The Bottom Line
HMRC want to see inside the relationship between you and your company in a way they never have before. Whether you think that’s reasonable oversight or regulatory overreach, the consultation is open now and your voice can influence what happens next.
The deadline is 10 June 2026. Don’t let it pass without being heard.
This article is for general information only and does not constitute tax advice. Always consult a qualified tax professional regarding your specific circumstances.