HMRC employment-related securities 6 July UK filing deadline nears for carried interest and co-investment

The deadline for submitting employment-related securities (ERS) annual returns to HMRC for the tax year ending 5 April 2025 is by 6 July – and missing the deadline for filing these annual returns leads to automatic penalties.

ERS are shares and other securities including units in a collective investment scheme that are acquired by an individual, where the right or opportunity to acquire the security is available by reason of employment.

Carried interest and co-investment entitlements issued to UK-based directors or employees of a fund manager or investment adviser are generally treated as ERS.

What are the obligations?

Employers have an obligation to:

• Register any new carried interest or co-investment, and any top-up/reallocations of carry, issued between 6 April 2024 and 5 April 2025 with HMRC. This process can take up to 10 days, so it is important to allow time for registration to meet the annual returns deadline.
• File annual returns in respect of carried interest or co-invest schemes for the 2024/25 tax year – even if nothing has paid out or changed, and/or the business is filing a nil return.

This must be done online using HMRC's Employment Related Securities Service by the deadline of 6 July 2025. As the deadline falls on a Sunday this year, most employers will likely aim to file by Friday 4 July. Late filing will trigger automatic penalties from HMRC.

Where to find the templates?

Carried interest and co-invest should be reported under "Other ERS schemes and arrangements" using the relevant HMRC template and guidance note which can be accessed through HMRC's Employment Related Securities Service.    

While it is possible for businesses to use their own templates, downloading HMRC's template will ensure that any recent changes are taken into account.

Practical points

• Carry and co-invest held by salaried members of a limited liability partnership will count as ERS for these purposes.
• New and top-up carry or co-investment interests should be reported using the "other acquisition" tab in the template.
• Returns are required for carry or co-investment interest issued to employees or directors who are liable to UK employment tax. This will include all UK residents and any non-UK residents who carry out duties in the UK.
• If an individual needs to be included on a return but does not have a UK national insurance number, an alternative reference should be used, as outlined in Employment Related Securities Bulletin 47 (January 2023).
• Employers will want to take screenshots of all the information uploaded to HMRC for their records.
• If a scheme is no longer active (or was registered in error), the employer must terminate the ERS scheme, specifying a final event date and submitting a return for the tax year in which this final event date occurs.
• HMRC reports that many companies miss the ERS filing deadline due to login issues and recommends having multiple administrators for each Government Gateway account. ERS Bulletin 59 offers instructions on how to set up a backup administrator.

For a more general overview of the reporting obligations for ERS returns and enterprise management incentive notifications, please read this Insight from our colleagues in the Incentives team.

Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.