Employee share plans: deadline for filing annual returns extended to August 24 2017

Companies operating employee share plans and employment-related securities arrangements in respect of their UK employees and directors will be aware that they need to file annual returns online with HMRC – the normal deadline is July 6 each year.

HMRC has recently announced that, due to technical issues experienced by some users with the HMRC online service, the deadline for the tax year ending April 5 2017 has been extended from July 6 2017 to August 24 2017.

Companies must file their annual returns using the HMRC Employment Related Securities Online Service.  This includes the templates to be completed and submitted with the annual returns.

There are separate templates in respect of each UK tax-advantaged share plan (including enterprise management incentives).  The company is also required to make a declaration confirming that the legislative requirements are met in respect of any tax-advantaged company share option plan, savings-related share option plan and/or share incentive plan.

The “Other” template must be completed in respect of any non-tax-advantaged arrangements, including non-statutory stock options, restricted stock and other acquisitions of employment-related securities by UK directors or employees (even where there is just one UK participant or where the participants have paid for the shares).

If UK directors or employees have participated in any new plans adopted during the tax year ending April 5 2017, it is necessary to register such arrangements online with HMRC before annual returns can be submitted in respect of them.  The registration process can take a few days to complete, so any new plans should be registered by the company as soon as possible, to enable the annual returns and any necessary declarations to be made by the deadline.

Where a plan has previously been registered but there is no activity to report, a nil-return should be filed.

Failure to file annual returns and make the appropriate declarations by the extended deadline of August 24 2017 will have serious consequences, including penalties and loss of tax relief for tax-advantaged arrangements.