Get ready - share plan returns are approaching!

Posted by Jennifer at 11:00 on 20 Feb 2017


As we approach the end of the tax year, our Operations Team starts to think about the Share plan annual returns that we will prepare and submit to HMRC for our clients.

Since April 2014, HMRC has required all reportable share plans to be registered online under Employment Related Securities (“ERS”), which you can access via the PAYE portal of the HMRC online Services; this includes the non-tax advantaged plans - but only where there has been a reportable event.

Companies that established a tax-advantaged scheme such as an Enterprise Management Incentive (“EMI”), Share Incentive Plan (“SIP”) Company Share Option Plan (“CSOP”) and Save-As-You-Earn Scheme (“SAYE) will need to self-certify that their plans meet the legislative requirements to HMRC at the end of each tax year that and complete an online declaration.

What is a reportable event and when do I need to notify HMRC?

  • Report new share plan arrangements – your company has until 6th July, following the tax year from when the company established the plan, to notify HMRC of the new share plan’s existence and file a return. A share plan return is required for each and every arrangement that you’ve registered.
  • New grants of EMI options – this replaced the requirement to file an EMI1 paper form for each participant (also known as a Notice of Grant from). For HMRC to receive notification of a specific award, your company needs first to register it’s EMI online, and then, you must file all EMI options within 92 days of the date of grant.

Other activities you must report on the share plan return include, but is not restricted to:

  • The exercise, lapse and disqualification of EMI share options
  • New awards made under a Share Incentive Plan
  • New awards made under a Company Share Option Plan
  • The award of non-tax advantaged options
  • An issue of shares under the Employee Shareholder Status

Since the introduction of the online service, HMRC does not remind companies of the requirement to file an annual return, so the onus is on your company to have its records in order. If you fail to submit your share plan return on time, HMRC will issue an automatic penalty. Your company has the right to appeal a penalty if it has a reasonable excuse.

Need help with your share plan return?

RM2 act as an ERS agent for its clients and files the returns on their behalf. As HMRC is due to release new templates for the annual returns very soon, make sure you give yourself plenty of time to complete the new forms. Alternatively, we can ease the administration of your share plan. Should you wish to instruct us, contact Caroline Parker on 020 8949 5522 or to discuss how RM2 can become your ERS agent.