Close companies face additional reporting requirements

Further administrative changes are on the cards for close companies, as the Government seeks to gain a better understanding of previously difficult-to-distinguish transactions.


Close companies – those companies controlled by five or fewer participators or by their directors if those directors are participators – may soon need to disclose details of transactions with participators in order to stay compliant.


A full definition of who qualifies as a participator can be found in CTM60107, but they will generally be shareholders or directors.


A business is controlled by a participator when the participator has voting power, share capital of the company and rights to capital on winding up.


It is worth understanding which transactions may be impacted and how this could change reporting requirements.


Which reporting requirements might change?


The proposed changes will cover a range of transactions, including:

  • Cash withdrawals
  • Loans
  • Debts
  • Dividends
  • Other distributions and transfers of assets to and from the company


It will exclude items that are already reported to HMRC, meaning that the changes will not result in a doubling up of administrative tasks.


To comply with the changes, close companies must provide details concerning the amount transacted, the date and the details of the recipient, including their name, address and national insurance number.


Why are these changes being introduced?


There is no guarantee that these changes will be introduced, as they are currently under public consultation.


However, there is a belief that transactions between close companies and their participators may be an area that is vulnerable to tax loss due to high levels of error and fraud.


Small businesses are seen as being particularly vulnerable to the tax gap, i.e. the difference between the amount of tax owed and the amount collected. They continue to be the focus of scrutiny and tax reform.


As these proposals are still under consultation, there is no clear indication of how and when the reports will need to be made.


The anticipated implementation will see the establishment of an annual reporting cycle that will be tied to the existing company tax return.


This should mean that the obligations will be easier to track, as they will not be an additional requirement.


Our team can help you understand your obligations and keep you updated on the outcome of the consultation.


Speak to our team to take the stress out of company tax compliance. 

Are your finances at risk of cyber-attack? Planning for the worst

By Charlie Flockhart • October 5, 2026
According to the latest Hiscox Cyber Readiness Report, almost two in five small businesses in the UK suffered a successful cyber-attack in the last year, with each attack costing an average of £26,650. Globally, cyber incidents cause around 32 hours of operational disruption a year on average. Cyber-attacks are no longer exceptional events, being viewed more as recurring costs, so businesses must prepare themselves financially for the impact. How should you prepare your finances in advance of a cyber-attack? A cyber-attack is slowly and sadly becoming a reality for many SME owners across the UK. To prepare, business owners should assess the potential financial risk a cyber-attack poses and forecast cash flow to ensure their business can survive one. It could also be beneficial to value your data assets to estimate the worth of any lost revenue and recovery expenses. Business owners may also want to keep offline playbooks. These are secure, printed offline copies of critical financial contacts, account numbers and recovery protocols to ensure that your business has key information in the event of a cyber-attack. Additionally, your business should establish strict double-check procedures for unusual payment requests or changes to supplier details to prevent business email compromise. You should also factor cyber insurance premiums into your operational risk management to ensure that you are prepared for any eventuality. What should you do to get your finances back in check after a cyber-attack? Should the worst-case scenario happen, once you are back on track, the first thing you should do is speak with your accountant. Your accountant will help you to calculate the exact monetary value of damaged assets, lost revenue and stolen money so that you know exactly where your business stands. They will then review your financial data and your tax records to establish a baseline for recovery and determine if the business can continue or if restructuring is necessary. Accountants can also help during complex cyber insurance claims by submitting the required evidence to ensure fair financial assessments of the business interruption costs. Once you have received any insurance payments, an accountant can advise on the tax implications.  How can we help? Cyber-attacks are becoming more prevalent for businesses up and down the UK. That is why it is imperative that you receive advice on how you can best prepare your finances in a worst-case scenario. Our team of accountants can help you to prepare your business for a cyber-attack and in the event of a cyber-attack, we can help you pick up the financial pieces. Get in touch with our team for support with preparing your business for a cyber-attack.

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By Charlie Flockhart • October 5, 2026
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Medium-sized companies may qualify for audit exemption

By Charlie Flockhart • October 5, 2026
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