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UK Share Plan Filings due by 6 July 2017

May 2017

The HMRC submission deadline for the annual filing of returns in relation to employment-related securities for the 2016/17 tax year is midnight on 6 July 2017.

You may wish to alert your clients to this deadline.  We have summarised details of the filing obligation below, which you are welcome to adapt to alert them to the deadline.

How can we help?

We provide advice and assistance in relation to all aspects of the annual reporting 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, as usual, 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.

UK SHARE 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 file an annual share plan return with HMRC following the end of the tax year.
  • The deadline for the 2016/17 tax year return (which ended on 5 April 2017) is 6 July 2017.

What are the filing requirements?

  • The annual share plan returns must be filed on-line, as part of the company’s PAYE on-line processes, via the HMRC Employment Related Securities (ERS) online service. 
  • In order to be able to file the returns, companies must have registered their share plans with HMRC. Where a company operates tax-advantaged share 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 share 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 filing of returns, or failure to file a ‘nil return’. It is therefore important to start making the necessary preparations for annual returns 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 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 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.

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.  

 

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