Employee Share Plans and Annual Returns: This Year it’s Different

Sean MacKenzie

As the deadline for filing annual returns for employee share plans approaches (6 July 2015), it’s worth remembering that this year is different.

This is the first year in which companies need to both register their plans and file annual returns online via the Employment Related Securities section of the PAYE Online portal as HMRC’s record keeping for employee share plans moves online.

All tax advantaged plans (CSOPs, SIPs, SAYE and EMI plans) must be registered. As part of the registration process for CSOPs, SIPs and SAYE plans, companies also need to self-certify that the relevant plan complies with the applicable legislation.

Failure to register CSOP, SIP and SAYE plans online before 6 July 2015 will result in the loss of certain of the tax advantages these plans provide.

Non-tax advantaged, or ‘unapproved’, plans are slightly different. These arrangements only need to be registered by 6 July following the end of the tax year in which the first “reportable event” takes place. Reportable events include certain acquisitions and disposals of shares by employees and the grant and exercise of unapproved share options.

Companies need to make separate annual returns in respect of each employee share plan that it has registered with HMRC.

Historically, HMRC had power to impose penalties for late filing of annual returns but automatic penalties will now be imposed. Penalties could, therefore, accumulate quickly for those companies that miss the deadline and have several plans registered.

If you have any questions about the need to register plans, self-certify tax advantaged plans or file annual returns please contact our Employee Incentives team.

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