UK News

Reminder: UK stock plan filings due by July 6th 2017

June 2017

The UK tax authorities’ (“HMRC”) submission deadline for annual filings in relation to employment-related securities for the 2016/17 tax year is midnight on July 6th 2017.

You may wish to alert your clients with UK subsidiaries to this deadline.  We have summarised details of the filing obligation below, which you are welcome to “cut and paste” to alert them.

UK STOCK PLAN FILINGS: SUMMARY FOR YOUR CLIENTS

What needs to be done and by when?

  • All companies which award share incentives (options, restricted stock, long term incentives, etc.) to their employees in the UK must submit an annual stock plan filing to the UK tax authorities’ (“HMRC”) following the end of the tax year.
  • The deadline for the filing for the 2016/17 tax year (which ended on April 5th 2017) is July 6th 2017.
  • Where stock awards are granted by a non-UK parent company to employees of its UK subsidiary, the annual filing can be made by either the non-UK parent or the UK subsidiary. In practice, it may be simpler for the UK subsidiary to make the filing.

What are the filing requirements?

  • The annual filing must be made online, as part of the company’s tax withholding online processes, via the HMRC Employment Related Securities (ERS) online service.  
  • In order to be able to make the filing, companies must have registered their stock plans with HMRC. Where a company operates tax-advantaged stock plans in the UK, it must register each tax-advantaged plan separately, and self-certify that those plans satisfy the conditions for favourable tax treatment. All non-tax advantaged plans operated by a company can be registered under a single registration number. 
  • Where a company has previously registered a stock plan, it must complete a ‘nil return’ if no reportable events (grants, exercises, vestings, etc.) have occurred during the tax year. 

What are the risks?

  • There are penalties for late filings, or failure to file a ‘nil return’. It is therefore important to start making the necessary preparations for annual filings compliance and we can help.


Do give me a call or drop me an email and we can discuss next steps.  

FURTHER DETAILS 

Scope of the reporting requirements

The ERS reporting requirements apply to any stock options, shares and other types of security that are acquired by UK employees by reason of their employment.  It can therefore apply to stock options and other kinds of share incentives 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.

Online registration

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. 

Annual online filings

An online filing must be completed for each registered ERS plan or arrangement by July 6th 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

How can we help?

We provide advice and assistance in relation to all aspects of the annual filing requirements and are happy to help your clients.  Either you can be our client or we can have a direct relationship with your client. Either way, we will not act for them on any other matters or market to them without your permission. For further information please contact Alasdair Friend, Partner (Compensation & Benefits), on +44 203 051 5711, or email us at compandbens@abbisscadres.com.

 

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