Employee share plans: have you registered and filed your annual returns online with HMRC?

Speedread

Companies operating employee share plans (whether tax-advantaged or unapproved) must take action to comply with the new HMRC online registration and annual reporting requirements. 

The deadline is 6 July 2015, but the online processes take a few days to complete – if you have not already done so, action should be taken as soon as possible.

Failure to comply with these requirements will result in penalties and loss of tax relief in the case of tax-advantaged plans.

New registration requirements for all share plans

As set out in our update of earlier this year, employers must register their employee share plans and employment-related securities arrangements online with HMRC. This includes any enterprise management incentive (EMI) plans operated by the company. 

Registration is done using the HMRC Employment Related Securities (ERS) Online Service. 

All arrangements must be registered in good time to generate the reference number which is required to enable annual returns to be submitted by the deadline of 6 July 2015 (note that it can take up to 7 days for the appropriate reference number to be generated by HMRC). 

 If you have not already done so you should register your plans as soon as possible. 

Self-certification of tax-advantaged plans

For tax-advantaged plans, the company must self-certify the plan using the ERS Online Service. 

If you operate a company share option plan, savings related share option (SAYE) scheme or a share incentive plan, the company secretary will need to make the appropriate online declaration confirming that the plan meets certain requirements. This forms part of the registration process.

All arrangements must be registered and the appropriate declaration made by 6 July 2015 (and on an annual basis thereafter). Failure to do so will mean that tax advantages will be lost. 

Annual returns – online reporting 

Annual returns for tax-advantaged share plans and unapproved arrangements must now be submitted online to HMRC, using the ERS Online Service.

The returns for the tax year ending 5 April 2015 must be submitted by 6 July 2015, and can only be made after a plan has been registered.

Penalties 

HMRC has made it clear that the 6 July 2015 deadline for registering and submitting annual returns is a strict one. Failure to do so will have serious consequences, including penalties and loss of tax relief for tax-advantaged arrangements. 

 If the deadline for submitting annual returns is missed, a no return penalty of £100 will apply, with additional penalties of £300 for each period of 3 months for which the returns are outstanding (and after 9 months a £10 penalty for each day the return is outstanding).

HMRC website

Further information on the registration and self-certification process, together with the templates to be completed and submitted with the annual returns, is available on the HMRC website.