A reminder about the share scheme returns deadline
The
absolute deadline for making online share schemes returns was 6 July. At
RM2 Partnership, we’ve completed and filed over 150 share schemes returns for
our clients, covering a range of share plans including Enterprise Management Incentives (EMI), Share Incentive Plans (SIP), Company Share Ownership Plans (CSOP) and
non-tax-advantaged schemes.
If
your returns have not been made, late filing penalties may now apply. The
initial late filing penalty is £100, although this will increase the later the
return is made. However, penalties can in some circumstances be much
higher. For example, a material and deliberate inaccuracy in an EMI return
carries a maximum fine of £5,000 if you don’t correct it.
Whether
you’re dealing with your own returns or whether you have professionals to help
you, it’s important to keep detailed records – including dates and prices – to
make sure you can complete the returns accurately and on time, so avoiding
unnecessary penalties.
In
some cases, you may need to check individual rules and option agreements to
identify the impact of events on the participants and the workings of the
scheme.
For
example:
- Have
there been changes to participants’ employment status or working
arrangements? This may result in options lapsing or ceasing to
qualify
- Have
any participants changed status from non-employee to employee? This
may result in changes to reporting requirements
- Have
there been changes in the Company’s share capital or ownership – even
smaller changes such as an investment by a third party, or an internal
reorganisation of a group? This may have consequences for your share
plans, depending on the details of the plan documents.
- Have
any options become exercisable during the course of the year – and were
they, in fact exercised by participants? The exercise will need to
be notified to HMRC.
- Have
any options lapsed during the year – for example as a result of a failure
to meet certain performance targets? This may also need to be
notified to HMRC.
Our
advice is always to keep good records throughout the year, which eases the
returns process as the returns deadline approaches. This is particularly
important as at present HMRC’s system doesn’t allow the submission of an
“early” return – so, for example, if your company is sold and options exercised
at the end of April 2016, you will not be able to complete and submit the
return until the window opens for returns almost a year later.
The next big deadline is 31 January 2017 when companies with employee trusts
will need to complete their annual trust returns for the tax year ended 5 April
2016 (the deadline for paper returns is earlier on 31 October 2016).
If you need assistance with managing your share plan records and administration, contact us on 0208 949 5522.