HMRC has sent a letter to companies with tax advantaged share plans as a final reminder to register them before the 6 July 2015 deadline. HMRC is concerned that some share plans have been registered incorrectly.
The letter sets out the consequences of failing to register a share plan or registering it incorrectly. Failure to register a tax advantaged plan correctly will lead to the loss of tax advantages on awards already granted.
Mistakes that HMRC has commonly seen include:
- Registering a tax-advantaged scheme more than once - a tax-advantaged plan should only be registered once by one company in the group (separately from any other plan);
- Registering the plan under the wrong type e.g. SAYE instead of CSOP - HMRC sets out how companies can identify each type of tax advantaged plan. All non-tax advantaged plans should be registered under the type "Other"; and
- Stating the wrong tax year of the first event - this should be 2014/15 for plans that existed pre-6 April 2014. Existing tax-advantaged awards will not be registered and therefore will lose tax-advantaged status, were the company to register 2015/2016 as the year of the first event.
A generic copy of HMRC's letter can be found here.
Companies must carry out their plan registrations as soon as possible and well in advance of 6 July 2015. The registrations can take up to around two weeks to go through on HMRC's system, which will be necessary before the online annual returns (due by 6 July 2015) can be submitted. It can take several weeks longer if the company needs to set up log-in access to HMRC's PAYE Online Services.
HMRC has said that it is important to print out a screen shot of the submission acknowledgement reference as HMRC may require this as proof that the annual return was submitted.