Employment-related securities Bulletin published | Impact of coronavirus

Published on 18th Jun 2020


HMRC published Employment Related Securities Bulletin 35 on 8 June 2020. This covers the impact of coronavirus on tax-advantaged share plans, and contains some helpful clarifications for participants, employers and administrators.

SAYE Plans

In relation to savings-related share option (SAYE) plans, HMRC has confirmed that:

  • Where participants are unable to contribute because they are furloughed or on unpaid leave during the pandemic, HMRC will extend the payment holiday terms.
  • All employees with a savings contract in place on 10 June 2020 can delay the payment of monthly contributions beyond 12 months, where those additional months are due to coronavirus.
  • For participants who are unable to make monthly contributions from their salary, due to having to take unpaid leave during the pandemic, payments via standing order will be permitted.
  • Payments made under the Coronavirus Job Retention Scheme (CJRS) can constitute a salary and SAYE contributions can continue to be deducted from CJRS payments.
  • Any temporary postponement of contributions will put back the maturity date by the total number of months missed, including any additional months missed as a result of the impact of coronavirus.

Share Incentive Plan

In relation to the Share Incentive Plan (SIP), HMRC has confirmed that CJRS payments can constitute a salary and SIP contributions can continue to be deducted from CJRS payments.

SIP participants are already permitted to stop their deductions from their salary, but they will not be able to make up missed deductions at a later date.

Company Share Option Plan

Where participants holding options under a Company Share Option Plan (CSOP) are furloughed because of coronavirus, HMRC accepts that those options will remain qualifying (on the basis the individuals were full time directors and qualifying employees at the time of grant).


HMRC is exploring technical issues raised in relation to coronavirus and Enterprise Management Incentive (EMI) options, and has promised to provide updates as soon as possible.


The bulletin confirms an extension of the EMI valuation window for valuations agreed during the pandemic. Broadly, provided that there has been no change that may affect an appropriate value, the valuation period is extended from the normal 90 days to 120 days from the date of HMRC's agreement. The specific terms of any agreement reached with HMRC Shares & Assets Valuation should always be considered carefully.

Deadlines for registration of new schemes and filing annual returns

The deadline for submitting annual returns in respect of employment-related security arrangements for the tax year ending 5 April 2020 is 6 July 2020.

HMRC recognises that some employers and agents may struggle to meet employment-related securities tax obligations due to coronavirus.

The bulletin stresses that employers should try to meet their obligations as soon as they can. HMRC has indicated that if an employer cannot meet its employment-related securities obligations due to the pandemic, HMRC may consider coronavirus as a reasonable excuse for missing such deadlines. An employer will need to explain how it was affected by coronavirus when making an appeal against automatic penalties.

Clearly, to avoid fines or the need to run such an argument, any new schemes should be registered and all annual returns filed by the deadline of 6 July 2020 wherever possible. For further information on the annual returns process, see our recent Insight.

Osborne Clarke comment

The publication of the bulletin on tax-advantaged plans is helpful, clarifying a number of points for affected participants, employers and administrators.

It is to be hoped that HMRC will provide the promised update on EMI options soon. The EMI regime is subject to State Aid rules, and we understand that HMRC is considering certain aspects with the European Commission.

The main issue relates to the EMI working time requirement. In the absence of clarification from HMRC, there is a risk that an EMI option holder who is placed on furlough will cease to meet the working time requirement. This would trigger a disqualifying event and change the tax status of the EMI option.

We would hope that HMRC would be sympathetic to such a situation, perhaps by extending or granting a concession or relaxing the rules on a temporary basis.

Any updates from HMRC are likely to be communicated by way of a further Employment Related Securities Bulletin, which would be published here.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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