Share and share option plan reporting for 2019/20

Share and share option plan reporting for 2019/20

Overview

If your company operates a share or share option plan for employees or directors (including non-executive directors) you will need to report any awards by filing electronically with HMRC (as well as reporting the adoption of the plan if it is the first year in which awards have been made).

In addition, if employees or Directors (again including NEDs) have personally acquired shares in the business this may also need to be reported.

Finally, if you have an existing share or share option scheme for employees but have made no awards in the year, a NIL return will still be required to be sent to HMRC to avoid penalties and fines.

Practicalities

All reporting for the tax year ending 5 April 2020 must be done through the HMRC Employment Related Securities (ERS) online service. This is for both tax advantaged and non-tax advantaged plans. Registration is required, even where a company already operates the PAYE for employers online service.

All annual returns must be filed by 6 July 2020.

Any share or share options transactions in any group entity involving employees or office holders will need to be reported online on an Employment Related Securities return. In addition to acquisitions or grants, the form also covers the position where shares / options have been sold, lapsed or cancelled due to someone leaving the organisation.

For approved schemes, there is also a self-certification process under which all EMI, CSOPs, SIPs and SAYEs must submit a declaration to HMRC that the criteria for qualification have been met. Self-certification only needs to be done once, therefore only new schemes which commenced operation in 2019/20 need to be completed by 6 July 2020. Failure to register the scheme within the ERS online service could mean the tax benefits of the approved scheme will be lost.

It can take up to a week to register a scheme on the ERS online service, so we recommend registering sooner rather than later to ensure any technical issues can be resolved without any delay before the deadline.

For further information about the issues raised in this article or to discuss any questions you may have, please contact Stuart James.

Posted in 2020, News.