HMRC Bulletin 61

HMRC’s recent ERS (Employment-Related Securities) Bulletin 61 has provided some updates, clarifications and reminders on various aspects of employee share schemes – we take a quick look at a couple of the updates which may affect you.

PISCES – EMI and CSOP options

If you have granted EMI or CSOP options and are considering applying to use the new PISCES trading platform when it goes live, draft legislation is waiting for approval to allow for EMI/CSOP options to be amended to allow this.

It should be noted that only options granted before 20th March 2025 (The Royal Assent of the Finance Bill 2025 to 2026) can be amended & option holders would need to be notified in writing of the amendments to their option agreements to include/allow a sale on the PISCES trading platform as an exerciseable event.

Options granted after 20th March 2025 would need for the PISCES exercise/sale clauses to be already included in the award contract paperwork.

Share Incentive Plan – untraceable employees

At RM2 we take the administration of Share Incentive Plans seriously, but occasionally a Company is faced with being unable to trace a former employee to take a direction on what to do with their SIP shares.

Normally contained with the SIP plan documentation are clauses giving the Trustee certain powers over the shares held by the SIP participant if they can’t be traced or contacted.

If the shares in the Company are classed as readily convertible assets then the Trustees can direct that sufficient shares are sold to cover any tax or National Insurance contributions so that these are paid to HMRC through PAYE.  The remaining shares or their proceeds can then either be given to charity or held on bare trust by the Company for the participant (dependent on the terms of the agreements in place).

If the shares aren’t readily convertible assets but there is an Income Tax charge the participant is legally bound to report the tax due through Self-Assessment.  If the participant can’t be traced, then the Trustees should notify this to HMRC.

Employment Related Securities (ERS) – Late filing & penalty appeals

If you have been unfortunate to have forgotten to file your share plan return and have received a penalty, don’t delay submitting your share scheme annual return (even if it is a nil return).  This will prevent you from receiving further penalties.

Feel your penalty was unfair and are thinking of appealing – it’s worth remembering that HMRC will not be able to respond to your appeal if you have not submitted an annual or nil return for the relevant tax year.

At RM2 we file over 150 ERS year end returns for our clients each year for all types of share plan and are experts at knowing what information to put where on the myriad of forms.  We take on the burden of share plan administration for all sizes of clients who wish to take comfort that the correct information is being reported to HMRC in a timely manner.

If you have any questions on the above or on any share plan we would be happy to speak with you, drop us a line at enqurires.co.uk and we can book a slot with one of our expert advisers.