If you have an employee share or option plan, or otherwise make shares or other securities available to people working in your business (including family members who acquired their shares by reason of employment rather than purely the family relationship), important changes have recently been introduced to the way you must report to HM Revenue & Customs. Failure to comply with the two new requirements could prove costly both financially for the company, and in lost employee goodwill if participants in previously “approved” approved plans lose their tax breaks.
The changes are as follows:
- All employee share plans (new or existing and whether HMRC approved or not), must be registered with HMRC by 6 July 2015. This is a mandatory requirement and must be done using the Employment Related Securities section of the PAYE online facility. The process can be started now and it is worth doing this as soon as possible.
- Annual returns to HMRC in relation to share plans must, from the 2014/15 tax year, be made online. While HMRC were previously somewhat benign in their approach to late filings, in future, failure will result in an automatic penalty and, significantly, previously tax-advantaged plans will lose their approved status.