Changes to the administration of share-based remuneration

Catherine Merry

The way in which employers must report share-based remuneration to HM Revenue & Customs is changing – almost everything will need to be filed online.  In addition, HMRC will cease to approve certain share plan arrangements, putting the obligation on employers to “self-certify”.  The changes affect all employers whose employees or directors hold shares or otherwise participate in a share plan and all employers seeking to set up new share plans.

From 6 April 2014:

  • New Company Share Option Plans (CSOP), Sharesave Schemes (SAYE) or Share Incentive Plans (SIP) will no longer require approval by HMRC.  Instead, employers will need to “self-certify” that their plan rules meet the relevant legislative requirements.
  • Existing CSOPs, SAYE schemes and SIPs must be registered on HMRC online (via “the PAYE Online” portal).   Employers that are not already signed up for PAYE Online Services will need to sign up (details can be found at www.online.hmrc.gov.uk). 
  • Any use of other share incentive arrangements (including an acquisition of shares by a director or employee) which were previously reportable on a “Form 42” must also be registered online.  A single registration may cover all such other arrangements (although it is possible to have multiple registrations).

From April 2015, all annual returns (including Forms 34 (SAYE), 35 (CSOP), 39 (SIP) and 42) will need to be submitted online and automatic penalties will apply for late filing.  Paper annual returns relating to the 2013/14 tax year will still need to be filed by 6 July 2014.

For the changes affecting EMI options see “Changes affecting EMI options – are you ready?”

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