Key takeaways
- Being a director does not, on its own, mean you must file; you file if you have income that is not fully taxed, such as dividends over £10,000, or if HMRC asks you to.
- Salary taxed through PAYE goes on the employment pages, using your P60 and any P11D.
- Dividends go on the main return and are taxed at 10.75%, 35.75% or 39.35% above the £500 allowance in 2026/27.
- Overdrawn director's loans can create a taxable benefit for you and a tax charge for the company.
- Directors usually make payments on account, so the first year can bring a large January bill.
Most owner-managed company directors pay themselves through a mix of salary and dividends. The salary is taxed through payroll, but dividends usually are not, which is why directors often need a Self Assessment return. This guide explains when you need to file and how each type of income is reported.
Do directors have to file a tax return?
There is no longer a blanket rule that every director must file. You need to file if, for example:
- you received dividends of more than £10,000 in the tax year (between £500 and £10,000 you can ask HMRC to collect the tax through your tax code instead)
- you had other untaxed income, such as rental income or significant savings interest
- you need to pay the High Income Child Benefit Charge and are not paying it through PAYE
- you had Capital Gains Tax to pay
- you want to claim higher rate relief on pension contributions or Gift Aid
- HMRC has sent you a notice to file
If HMRC sends a notice to file, you must file even if no tax is due. In practice, most owner-directors of trading companies receive dividends above £10,000 and file every year.
What goes where on the return
Salary and benefits
Use the employment pages, entering the figures from your P60 (pay and tax deducted) and P11D (benefits in kind such as a company car or medical insurance). Tick the box to show you are a director, and whether the company is a close company. Benefits that the company payrolled are already in your P60 pay figure.
Dividends
Enter UK dividends received in the tax year on the main return. Dividends are taxed in the year they are paid, based on the date of the dividend, not the company’s accounting year. See tax on dividends.
| 2026/27 | Rate |
|---|---|
| Dividend Allowance | £500 at 0% |
| Basic rate band | 10.75% |
| Higher rate band | 35.75% |
| Additional rate band | 39.35% |
Director’s loan account
If your director’s loan account is overdrawn:
- a loan of more than £10,000 at any time in the year, with interest below HMRC’s official rate, is a taxable benefit in kind reported on your P11D
- if the company writes the loan off, the amount written off is taxed on you as income (usually as a dividend, and NI may apply)
- the company pays a tax charge under section 455 on loans not repaid within nine months of its year end: 35.75% for loans made from 6 April 2026 (33.75% before), tied to the dividend upper rate; see close company rules
Other income and reliefs
Add any rental income, savings interest, capital gains and other income, and claim reliefs such as personal pension contributions (entered gross) and Gift Aid.
Worked example for 2026/27
A director takes a salary of £12,570 and dividends of £45,000 and has no other income.
| Item | Tax |
|---|---|
| Salary covered by the Personal Allowance | £0 |
| Dividends: first £500 | £0 |
| Dividends in the basic rate band (£37,200) | £3,999 |
| Dividends above £50,270 (£7,300 at 35.75%) | £2,609.75 |
| Total due through Self Assessment | £6,608.75 |
This is more than £1,000 and none of it was taxed at source, so payments on account of £3,304.38 each will also apply for the following year. See payments on account.
Directors and payments on account
Because dividend tax is not deducted at source, directors usually make payments on account. In the first year of taking dividends this means paying the full year’s tax plus half again on 31 January. Many directors set money aside monthly, or use HMRC’s budget payment plan.
Common mistakes
- Recording dividends in the wrong tax year, by using the company’s year end instead of the date paid.
- Missing benefits that appear on a P11D, or double counting payrolled benefits.
- Taking money without declaring a dividend, which creates an overdrawn loan account instead.
- Forgetting the High Income Child Benefit Charge when salary plus dividends exceed £60,000.
Frequently asked questions
Do company directors have to do a Self Assessment tax return?
Not automatically. You must file if you have untaxed income such as dividends over £10,000, need to pay certain charges, or receive a notice to file from HMRC.
How are directors’ dividends taxed in 2026/27?
At 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band, after the £500 Dividend Allowance.
Where do I put my director’s salary on the tax return?
On the employment pages, using the pay and tax figures from your P60, with benefits from your P11D.
Is a director’s loan taxable?
A loan over £10,000 with low or no interest is a taxable benefit. If the loan is written off, the amount is taxed as income, and the company may pay a section 455 charge if it is not repaid in time.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance in October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.