Employee share plans: HMRC online registration and annual return deadlines approaching!

Speedread

Companies operating employee share plans must register their arrangements and submit their annual returns online to HMRC by 6 July 2015. 

The deadline is fast approaching. Companies which have not yet registered must do so as a matter of urgency, as it is necessary to have registered before annual returns can be submitted (and it can take up to 7 days for HMRC to issue the appropriate reference number).

Penalties and loss of tax relief in the case of tax-advantaged plans will apply in the event of failure to comply with the new online requirements.

Whilst many companies are aware that these requirements apply to tax-advantaged plans, it is important to note that they extend to unapproved arrangements for employees and directors.

New registration requirements for all share plans

As set out in our recent update, employers must register all their employee share plans and employment-related securities arrangements online with HMRC. This includes any enterprise management incentive (EMI) plans operated by the company and any unapproved arrangements involving, for example, the award of shares and share options.

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

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

Self-certification of tax-advantaged plans 

For tax-advantaged plans, the company must self-certify the plan using the ERS Online Service. This forms part of the registration process.

All tax-advantaged plans 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 online to HMRC 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 plans.

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.