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.