Employee Share Schemes are moving online!

HM Revenue & Customs (HMRC) is changing the way that share schemes are administered and reported to them. The changes will affect existing and new share schemes. If you are a company with an existing share scheme, or are considering implementing one, you should be aware of the new requirements.

HMRC have recently issued letters to all companies currently operating a share scheme informing them of the new online service, the Employment Related Securities (ERS) service, launching this April 2014.

Companies already using HMRC online services can access ERS through PAYE online. Alternatively, companies without this option will be required to complete an initial registration process. Companies can authorise third party administrators to act as an agent, this allows the continued administration of their schemes. We will be contacting our clients very shortly will full instructions.

What information will you need to register online?

From 6th April 2014, all share schemes must be registered with HMRC online. This includes ‘unapproved’ plans. Companies that have established an Enterprise Management Incentive (EMI), Share Incentive Plan (SIP), Company Share Option Plan (CSOP) and Save-As-You-Earn (SAYE) Scheme will need to self-certify that the schemes meet the legislative requirements.

In addition to this, and also in effect from 6th April 2014, HMRC will no longer pre-approve SIPs, SAYEs or CSOPs. Failure to register them online will result in any tax advantages being lost. Specifically the following will need to be reported:

  • New grants of EMI options – this will replace the requirement to file an EMI1 paper forms for each participant (known as Notices of grant forms). Remember that all EMI options must be filed within 92 days of the date of grant, therefore the EMI must be registered online first in order for the grants to then be able to be filed within the 92 day deadline.
  • Unexercised EMI options
  • Non-tax advantaged arrangements which are currently reported on Form 42
  • From April 2015, Annual returns EMI40, SIP39, CSOP35 and SAYE34 must be filed online – and HMRC will issue automatic penalties if the July 2015 submission deadline is not met.

If you have a share scheme or have any questions regarding the introduction of the ERS service, please contact us on 020 8949 5522, or via enquiries@rm2.co.uk, and we will work with you to ensure safe migration of your share scheme administration.