New rules came into effect last year governing the way that employee share plans and similar arrangements must be reported to HM Revenue & Customs (HMRC) for the 2014/15 tax year onwards. Notifications and annual returns can no longer be made on paper forms; they must all be made online.
If the 6 July online reporting deadline is missed, a company may be fined and/or the tax advantages of options or awards lost. As some of the stages require a week or so to receive a registration number before the next stage can be started, it is necessary to get this process under way sooner rather than later and not leave it until July.
The deadline applies to all types of tax-advantaged share plans. This covers company share option plans (CSOPs), savings-related share option schemes (SAYE/Sharesave), Enterprise Management Incentive (EMI) options and share incentive plans (SIPs). The process for these plans follows this sequence, all of which takes place online:
- Registration with HMRC Online Services. This applies whether the plan was approved by HMRC under the old prior approval procedure that existed before 6 April 2014 or is a new plan established between then and 5 April 2015. Each plan must be registered separately and will be given a unique HMRC reference number.
- Self-certification (other than EMI). This involves an officer of the company certifying that the plan complies with the relevant legislation and is included as part of the registration process.
- End-of-year return due by 6 July each year. This includes details of each “reportable event”, such as the exercise, surrender, release, roll-over or lapse of an option. A return needs to be made for each registered plan every year, even if nothing has happened under that plan during the previous tax year (that is, a nil return).
Non-tax-advantaged plans (formerly called “unapproved plans”) and similar arrangements do not need to be self-certified and only have to be registered online by 6 July 2015 if a “reportable event” occurred in the 2014/15 tax year.
The table below summarises the position for the various plans:
Click here to view the table.