The UK tax authorities’ (HMRC) submission deadline for annual return filings in relation to employment-related securities for the 2020/21 tax year is midnight on 6 July 2021.
All reporting must be done via the HMRC Employment Related Securities (ERS) online service. In order to submit returns, companies must have registered to use the service, registered each employment related securities scheme or arrangement, and self-certified any tax advantaged plans.
WHAT TO KEEP IN MIND
Scope of the reporting requirements
The ERS reporting requirements apply to any share options, shares and other types of security that are acquired by UK employees by reason of their employment. It can therefore apply to share options and other kinds of share incentive that are granted by non-UK companies to UK based employees. Reporting may also be required in respect of non-UK resident employees who carry out work duties in the UK.
Each ERS plan or arrangement should be registered online, however non-tax advantaged plans or arrangements do not need to be registered until there is a reportable event.
Self-certification of UK tax advantaged plans
Companies that operate tax advantaged ERS plans, such as Share Incentive Plans (SIPs), Savings Related Share option plans (SAYE) and Company Share Option Plans (CSOPs) must self-certify online that the plan complies with the relevant statutory code. The company secretary (or the employer on their behalf) should complete an online form declaring certain requirements have been met at the date of registration or from when the first option or award was granted.
Online filing of annual returns
An online return must be completed for each registered ERS plan or arrangement by 6 July following the end of the tax year. The returns will contain details of any share options that have been granted and exercised, as well as any other reportable events in relation to employment-related securities.
If returns are filed after the deadline (6 July 2021), penalties may be imposed, and any tax advantages from a tax-advantaged plan for employers and employees may be lost. It is therefore important to start making the necessary preparations for annual returns compliance.
How can we help?
We can provide advice and assistance in relation to all aspects of the annual reporting requirements. For further information on how we can help please get in touch.