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Self Assessment Tax Return Guide for Limited Company Directors and Shareholders
September 06, 2025
Running a limited company means you are responsible not only for business accounts but also for your own personal tax. Filing accounts at Companies House and paying Corporation Tax only covers the company. Your own position as a director or shareholder is separate. If you take dividends, borrow money from the business, or receive income outside PAYE, HMRC expects you to file a Self Assessment tax return. Many directors overlook this step, assume everything is taken care of, and then get caught out with late filing penalties and interest charges.
Here is the important point. A Self Assessment for limited company directors is not about the company’s tax. It is about your personal income and making sure HMRC sees the full picture. Once you understand that distinction, it becomes easier to stay on top of your obligations and avoid fines. This guide will walk you through who needs to file, how registration works, the deadlines that matter, and what happens with dividend tax and director’s loans.
It will also explain how Making Tax Digital for Income Tax Self Assessment (MTD ITSA) changes the process in the next few years. If you have searched for answers on a Self-Assessment limited company tax return and only found confusing or conflicting advice, this article gives you a clear roadmap you can rely on.
How Self Assessment applies to directors
Self Assessment is how HMRC collects tax on income that was not taxed at source. For directors and shareholders, this often includes
- dividends above the annual allowance
- a director’s loan that is not repaid within nine months
- benefits in kind such as a company car or private medical cover
- rental income, investment income, or savings interest outside PAYE
Your company files its own Corporation Tax return. You may also need a director Self Assessment tax return for your personal income.
Do all directors need to file a Self Assessment
Not always. It depends on how you are paid and whether you have untaxed income
- salary only through PAYE, usually no return needed
- dividends above the allowance. must be declared
- dividends over ten thousand pounds, filing is mandatory
- a director’s loan not repaid within nine months. triggers a tax charge
- other untaxed income such as rent, investments, or benefits in kind, filing required
If you are unsure, ask a tax return accountant who works with limited company directors. A quick check now is cheaper than a penalty later.
How to register for Self Assessment as a director
The steps are simple, the timing is strict
- Create a Government Gateway account
- Complete the SA1 form with your National Insurance number and personal details
- Wait for your Unique Taxpayer Reference by post
- Activate your account and file online
Register by 5 October after the tax year in which you received untaxed income.
Key Self Assessment deadlines for directors
- register by 5 October after the tax year
- paper returns due by 31 October
- online returns due by 31 January
- any tax due must be paid by 31 January
Late filing starts at a one hundred pound fine and increases if you keep delaying.
Dividend tax rules for directors and shareholders
Dividends are the most common reason directors need a return. For the 2024 to 2025 tax year
- the first five hundred pounds are tax free
- above that, the rates are 8.75 % for basic rate, 33.75 % for higher rate, and 39.35 % for additional rate
- dividends over ten thousand pounds must be reported through Self Assessment
A tax return accountant can make sure dividend entries are correct and that allowances are used properly.
📞 Call us at 020-8239-4999 📧 Email us at dhruv@doshiaccountants.co.uk. Our tax return accountants make the process straightforward so you avoid penalties and focus on running your business.
Corporation Tax and Self Assessment are different
Keep these separate to avoid headaches
- Corporation Tax return. Reports company profits and is due twelve months after year end, with tax payable nine months and one day after year end.
- Self Assessment tax return. Reports your personal income such as dividends, salary, loans, rental, and investment income, and is due online by 31 January.
Making Tax Digital for Income Tax Self Assessment
MTD for ITSA begins on 6 April 2026 for individuals with self-employment or property income above £ 50,000. From April 2027, the threshold reduces to thirty thousand pounds. This is about personal income for sole traders and landlords. It does not make directors file digitally just because they receive salary or dividends, although software can still include those figures on the annual return.
What MTD ITSA requires
- keep digital records for self-employment and property income
- send quarterly updates for each income source through compatible software
- send a final declaration after the tax year to confirm totals and reliefs
- continue to meet the usual 31 January payment deadline
Your software guides the update periods and tells you when to submit.
Choosing software
You or your accountant will need software that can create, store, and correct digital records, send quarterly updates, and submit the annual return.
To choose the right software for Making Tax Digital for Income Tax refer to HMRC details here:
https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax
You only need digital records for self employment and property income. Other income such as employment, pensions, savings, or dividends can still be reported without keeping digital records for those items.
For more details see our full guide on Making Tax Digital for Income Tax Self Assessment.
Common mistakes directors make
- assuming a PAYE salary covers everything
- forgetting to declare dividends
- leaving a director’s loan unpaid for the past nine months
- missing the 5 October registration deadline
- filing late and paying avoidable penalties
📞 Call us at 020-8239-4999 📧 Email us at dhruv@doshiaccountants.co.uk today. Get your tax return handled with ease.
Quick reference checklist for directors
Situation | Do you need to file a Self Assessment |
|---|---|
salary only through PAYE | usually no |
dividends above five hundred pounds allowance | yes |
dividends over ten thousand pounds | yes, mandatory |
director’s loan unpaid after nine months | yes |
benefits in kind, rental, or other untaxed income | yes |
Handle your director’s tax return early and avoid the last-minute rush. Three steps keep you safe. register, file, and pay on time. If you would rather not deal with the forms, a tax return accountant who supports limited company clients can take care of everything and keep you informed.
Need additional help if this is your first time filing? Check out our detailed guide: First Time Filer’s Guide to Self Assessment Tax Returns
FAQs: Self Assessment for Limited Company Directors
1. Do all directors need to file a tax return?
Not always. If your only income is a PAYE salary with no dividends or other untaxed income, you may not need one. However, most directors do file because dividends, director’s loans, or other income must be reported. HMRC can also issue a notice to file, which makes it compulsory even with PAYE-only income.
2. What are the Self Assessment deadlines?
The deadlines follow the same pattern every year. You need to register by 5 October after the end of the tax year. If you file a paper return, the deadline is 31 October. For online returns, the deadline is 31 January, which is also the date when any tax owed must be paid. Missing these dates can lead to fines and interest charges.
3. How do I register as a director?
You must register for Self Assessment with HMRC. Create a Government Gateway account, complete form SA1, and wait for your Unique Taxpayer Reference (UTR). Once activated, you can file your tax return online. Registration should be done by 5 October following the end of the tax year.
4. What are the dividend tax rates for 2024/25?
For 2024/25, the first £500 of dividends is tax-free. After that: 8.75% (basic rate), 33.75% (higher rate), and 39.35% (additional rate) apply. Dividends above £10,000 must be reported through Self Assessment. Directors often use a mix of salary and dividends for tax efficiency.
5. Do directors on PAYE need a tax return?
Usually no, if PAYE is your only income. But if you also receive dividends, rental income, or benefits in kind, you must file. HMRC can still issue a notice requiring directors to complete a tax return even if no extra tax is due.
6. How do director’s loans affect tax?
If a director’s loan isn’t repaid within 9 months of year-end, the company may face a 32.5% tax charge (s455 tax). There may also be a personal tax charge if the loan counts as a benefit. These must be reported on the director’s Self Assessment.
7. What if I miss the filing deadline?
Missing the Self Assessment deadline triggers a £100 penalty straight away. After 3 months, HMRC adds £10 per day up to 90 days. At 6 months, there’s another 5% penalty (or £300), and again at 12 months. Interest is also charged on unpaid tax.
8. Do directors make Payments on Account?
Yes, if your tax bill is over £1,000 and less than 80% was collected through PAYE. Payments are made in two instalments: 31 January and 31 July. Each is usually 50% of the previous year’s bill.
9. What records should directors keep?
Keep: dividend vouchers, payslips, P60/P45, P11D (if applicable), bank and investment statements, rental accounts, and details of director’s loans. HMRC requires records to be kept for at least 5 years after the 31 January deadline.
10. Does Making Tax Digital affect directors?
From April 2026, anyone with self-employed or rental income over £50,000 must use Making Tax Digital (MTD). From April 2027, the threshold drops to £30,000. Directors who only take salary and dividends are not directly affected by MTD.
11. Can I file my tax return without an accountant?
Yes, directors can file online themselves. But dividend entries, director’s loans, and Payments on Account can be tricky. Many directors use an accountant to avoid mistakes, reduce risk of HMRC enquiries, and sometimes save tax.
12. How much does an accountant cost?
Prices vary. A simple director return with PAYE and small dividends may cost £150–£300. More complex cases with rental income, loans, or benefits can cost £400–£600+. Always ask for a fixed-fee quote that includes HMRC support.