Employee share plans: deadline for online HMRC annual returns approaching

Written on 25 May 2016

Speedread

A reminder for companies operating employee share plans: 6 July 2016 is the deadline for filing annual returns online with HMRC in respect of the tax year ending 5 April 2016.  This includes EMI plans and self-certifying any tax-advantaged arrangements operated by the company.  Failure to self-certify tax-advantaged plans will result in loss of tax relief.

Annual returns: online reporting

As set out in our previous Updates, HMRC practice has recently changed so that annual returns for tax-advantaged share plans, enterprise management incentive (EMI) option plans and unapproved arrangements must now be submitted online to HMRC.  Companies must do this using the HMRC Employment Related Securities (ERS) Online Service.

For tax-advantaged plans, the company must also self-certify the plan annually using the ERS Online Service.  Tax-advantaged plans include the company share option plan, savings-related share option (SAYE) scheme and the share incentive plan.

The annual returns for the tax year ending 5 April 2016 must be submitted by 6 July 2016.

You can confirm whether a return has been submitted by logging into the ERS Online Service and viewing your currently registered schemes and arrangements (which will include details of any online returns that have been previously submitted).

If your return for the tax year ending 5 April 2015 is still outstanding, you will need to use the new templates for the tax year ending 5 April 2016 when submitting that return (as the earlier versions have now been withdrawn).

Registration of new plans

If any new plans have been adopted during the tax year ending 5 April 2016, the company will need 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.

Penalties

The 6 July 2016 deadline for 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 that the return remains outstanding).

HMRC website

The current templates to be completed and submitted with the annual returns are available on the HMRC website, together with further information on the registration and self-certification process.