Register your share schemes to avoid penalties

25 June 2015

Many small employers may be unaware that by 6 July 2015 they need to register all employee share schemes with HMRC and file online returns. It is important that employers and their agents take action as early as possible to ensure that everything is in place in good time before the deadline.

Employers who fail to implement these major changes by July face:

  • loss of the tax advantages expected by their employees if a scheme remains unregistered
  • penalties of up to £700 for a late return, with an extra £10 per day if the return is still outstanding after nine months
  • a penalty of £5,000 for a material inaccuracy in a return which is not corrected without delay.

The changes include:

  • online filing for all share scheme forms from April 2015, including Share Incentive Plans (SIP) and unapproved arrangements and
  • self-certification of Share Incentive Plans (SIPs), Save As You Earn (SAYE) schemes and Company Share Option Plans (CSOPs) from April 2014.

In order to register with HMRC, the employer will need to provide HMRC with basic information such as their company registration number and unique tax reference number. Once the business has registered, HMRC will provide a unique scheme reference number.

Schemes only need to be registered once. However, HMRC must be notified of specific amendments to scheme rules as part of the annual online return process.


Employment-related Securities update

HMRC has published the following update in Employment-related Securities Bulletin No 20:

Companies are required to supply HM Revenue and Customs (HMRC) with an online return for each registered employment-related securities scheme or arrangement by 6 July following the end of the tax year, including details of any reportable events in the tax year. Before you can submit a return using the ERS Online Service you must be registered to use HMRC Online Services.

HMRC has come across instances of companies which are unable to make returns of reportable events in particular circumstances. Where this is the case, for 2014/15 returns of reportable events will not be required if all of the following apply:

  • Neither the company, nor any other company in the same group or under the same ownership, is registered for PAYE
  • The arrangements are not tax-advantaged schemes (that is, not SIP, SAYE, CSOP or EMI schemes)
  • The company has no obligations to operate PAYE in respect of the reportable event
  • The company has no obligation to operate PAYE in respect of anything else it does.

HMRC will be writing individually to everyone who has raised this specific question with them.