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Share scheme returns

Posted by admin at 15:52 on 13 Feb 2017

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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 a member of our Operations Team on 0208 949 5522 or by email operations@rm2.co.uk.