Annual Returns
If you are an employer operating an EMI (Entrprise Investment Management) or non tax advantaged share schemes, you must submit an ERS (Employment Related Scurities) return every year for all schemes, including one-off awards or gifts of shares.
Transactions for each tax year should be included in the ERS return for that year which must be submitted by 6 July following the end of that tax year.
Examples of transactions reportable under ERS rules include:
- HMRC tax-advantaged plans (EMI, CSOP, SAYE/Sharesave and SIP);
- share acquisitions and disposals;
- share options;
- share-for-share exchanges;
- overseas plans with UK participants (e.g. RSUs, RSAs and ESPPs);
- group re-organisations and other corporate transactions;
- variations in share capital;
- carried interest arrangements;
- the lifting of restrictions attached to shares (including on disposal);
- restricted stock units (RSUs) and restricted stock awards (RSAs);
- transactions involving loan notes or warrants; and
- units in investment schemes.
You need to submit an ERS return (or nil return) even if:
- there have been no transactions
- you have appealed a late filing penalty
- the scheme has been registered in error or there’s a duplicate scheme
- you did not get a reminder from HMRC
If your ERS scheme has ceased and you have entered a final event date, you must submit any outstanding returns up until the date of cessation.
If you do not file the annual return by the deadline, a £100 late filing penalty will be issued. A further £300 penalty will be issued if not filed by 6 October and a further £300 issued if not filed by 6 January. Daily penalties can then be applied from 6 April or 9 months after the deadline.
Scheme Registration
If your company is required to make the annual return filing in relation to a share option scheme, the scheme will need to be registered with HMRC before the annual return is filed.
If your company has already granted options under an EMI or non tax advantaged share option scheme, the scheme should have already been registered with HMRC and allocated a unique scheme reference number. If so, you do not need to go through the scheme registration process again.
If you fail to register a CSOP, SIP or SAYE scheme online by 6 July following the tax year in which the first awards were granted or of the grant of EMI options within 92 days from each grant date, the share awards will not qualify for the associated tax reliefs.
Critchleys can help you with all aspects of your ERS reporting requirements including:
- Helping you assess if a share plan return must be filed
- Identifying your share scheme reporting obligations
- Registering your share plans with HMRC.
- Preparing and submitting your share options annual returns and getting these up to date with HMRC if you are behind with your reporting requirements.
What should I do next?
If you would like to discuss your company’s position regarding it’s share option filing requirements please contact Jess Gray, our Business Tax Advisor, jgray@critchleys.co.uk
Critchleys Clients: If you have specific questions, don't hesitate to get in touch with your Critchleys contact directly.