For the first time companies are required to register with HMRC their employee share plans with participating UK tax payer employees via an online system by no later than 6 July 2015. For companies that have not yet registered, there are a few key points to note:
- Registration affects all UK employee share plans where there are outstanding options/awards - HMRC approved plans, unapproved plans and any ‘one man’ plans. This is regardless of whether the plan will continue to be operated going forward. Unapproved plans can be registered together as one plan, however, HMRC approved plans will need to be registered separately.
- HMRC approved Sharesave/ SAYE plans (SAYE), Share Incentive Plans (SIP) and Company Share Option Plans (CSOP) must be self-certified as to compliance with the relevant Schedule in the Income Taxes (Earnings and Pensions) Act 2003 at the time of registration. Companies that have not updated their HMRC approved plans in light of the changes brought about by the Finance Act 2013 (FA13) and Finance Act 2014 (FA14) (some of which are automatically imposed by the legislation and others which are optional) are strongly advised to do so to avoid incorrect self-certifying. Failure to self-certify or incorrectly self-certifying may result in a fine, or if sufficiently serious, the HMRC approved plan losing its approved status. For further information please see our briefings on how FA13 and FA14 have impacted SAYE, SIP and CSOP plans (available here and here).
- Any update to HMRC approved plan rules to take account of the FA13 and FA14 changes will no longer require approval by HMRC (as this is replaced by the self-certification regime). However, changes that are not automatically made by the legislation will still require approval by the Remuneration Committee or Board and this should be taken into account in the timelines for registration.
- Companies are also obliged to file their annual share plan returns with HMRC online by 6 July 2015. The new online returns replace the old paper Form 34 (SAYE), Form 35 (CSOP), Form 39 (SIP) and Form 42 (unapproved plans). See our briefing here on the new information required to be included in the annual returns. Online returns can only be submitted once the share plans to which the returns relate have been registered with HMRC. Therefore, registration must occur prior to 6 July 2015 and we would strongly recommend that companies register their plans in good time prior to the deadline to allow for any technical difficulties to be resolved.
- The registration process is only available online via a company’s PAYE system. Companies that outsource their PAYE functions will need to register for direct PAYE access in advance with HMRC. Agents are not able to register share plans with HMRC on a company’s behalf.
- As registration is made via the PAYE system, companies will need to consider data protection issues and the identity of the individuals who will register the share plans as they will have access to employees’ payroll information.