As the 2014/15 tax year ends it is time to take stock of any employee share plans in place. In previous years it was only necessary to update HMRC with any changes in the year. However, as the reporting process transitions from paper returns to online filing additional compliance steps and reporting is required for before the 6 July 2015 reporting deadline.
What happens if the schemes are not registered on time?
If the schemes are tax advantaged and not properly reported within the deadline the tax advantages will be lost. This applies even in cases where HMRC have previously approved the scheme.
What schemes need to be registered?
All share plans must be registered with HMRC using the PAYE online service. This includes both tax advantaged and non-tax advantaged share schemes such as:
• EMI options including all unexercised EMI options. The paper form EMI1 will be replaced with online reporting but the 92 day notification period remains therefore, the EMI scheme must be registered online first to allow for the grants to be filed within the deadline.
• CSOPs, SIPs and SAYE option schemes. Each of these schemes must be notified and self certified online. This replaces the previous pre-approval requirements in place.
• Other non-tax advantaged schemes. This would include any schemes normally included on Form 42 including the relatively new Employee Shareholder Status (ESS) awards. If there is an existing arrangement but there are no reportable events during the year the scheme does not have to be registered by 6 July 2015. It will only need to be registered after the next reportable event occurs.
How do I register my schemes?
The ERS service should be used to register the schemes and can be accessed via the PAYE for employers online service.
If you are not already registered to use HMRC online PAYE services this will need to be done first which can take up to two weeks.
Each scheme must then be registered using this service providing the company’s corporation tax reference, company registration number and type of scheme. A unique scheme reference will then be provided for each registered scheme which should be used when submitting the end of year report. It may take up to 7 days for HMRC to generate this.
Inconveniently the employer must first register the scheme but can then authorise an agent to act on their behalf thereafter. The agent authorisation process may take up to two weeks to complete.
We would recommend the process is started as early as possible to register given the potential time delays and the 6 July deadline rapidly approaching!
An online return will need to be filed for each registered ERS scheme or arrangement by 6 July after the end of the tax year i.e. 6 July 2015 for the 2014/15 tax year. A separate attachment will also need to be provided if there are any reportable events. Nil returns must also be made if the scheme has been registered but nothing has happened during the year.
As mentioned earlier the grant of EMI options must still be notified within 92 days.
Where we can help
We can assist you with the online registration process and the reporting requirements e.g. preparing and submitting the online Form 42 returns.