Close companies and participators: reporting company payments consultation

Consultation publisher

HMRC

Response publication date

09 June 2026

Executive summary

AAT welcomes the opportunity to respond to this consultation on reporting transactions between close companies and their participators. Our members work closely with SMEs and bring direct, practical insight into how the current system operates.

We support efforts to improve compliance and close the tax gap. However, the core challenge is limited awareness of existing rules. Many small business owners do not fully understand concepts such as close companies, directors’ loan accounts or dividend requirements. 

In this context, additional reporting requirements risk increasing complexity without addressing the root causes of non-compliance. For many SMEs, more detailed or frequent reporting would add cost and administrative burden, particularly where records are not maintained in real time. This could make compliance harder for those trying to meet their obligations.

We believe a more effective approach would focus on improving understanding through clearer guidance and targeted education. If changes are introduced, they should build on existing processes and remain proportionate. SMEs are critical to the UK economy and reforms must be aligned with how businesses operate in practice.