You may not be aware but HMRC has recently changed the reporting requirements relating to shares schemes. We are aware that HMRC has been writing to the company secretary of affected taxpayers to notify them of the changes, but in the event that you either have not received such letters or are unclear as to the impact, a short note outlining the changes follows:
From 6 April 2014, employers need to register existing and new
share schemes and arrangements online with HMRC. This will enable employers to file share scheme returns and information digitally, and to self-certify any tax advantaged share schemes.
The new system for share scheme administration is called ERS; all share schemes must be registered and self-certified online in order for any share or option awards made from 6 April 2014 to qualify for tax advantages.
Also, it is now a requirement to inform HMRC online of the grant of Enterprise Management Incentive (EMI) options. This applies to any EMI options granted after 6 April 2014 and, as before, HMRC must be notified within 92 days of the grant date. In order to notify HMRC of the grants, the EMI scheme must already be registered with ERS.
HMRC has suggested a timetable for companies to register their share schemes between April 2014 and October 2014, based on the company name, but a company may register for ERS at any time.
However, we recommend that registration should be done as soon as possible, regardless of the company’s name. All share schemes must register by 6 July 2015 or the tax advantages of the share scheme will be lost, even if the scheme already has HMRC approval.
Annual return filings
You will also be familiar with the annual share scheme returns that need to be filed by 6 July following the end of the tax year.
There are specific forms relating to the separate approved schemes, such as Form 34 (Save As You Earn), Form 35 (Company Share Option Plan), Form 39 (Share Incentive Plan) and Form EMI 40 (Enterprise Management Incentives). Reportable events relating to unapproved schemes need to be reported on Form 42.
For the year ended 5 April 2014, the forms need to be submitted by paper to HMRC by 6 July 2014. However, as part of the ERS system, all annual share scheme returns will have to be submitted to HMRC electronically for the year ending 5 April 2015 and for subsequent tax years. We understand that electronic versions of the 2014/15 returns will be made available in October 2014.
We are able to deal with the ERS registration and notification process on behalf of companies as their tax agents, so if you would like our assistance with any of the above, please get in contact.