You will need to take the following actions by 6 July 2015:
- register all share plans on the HMRC online system;
- complete end of year reporting for options and share plans on the HMRC online system; and
- self-certify tax-favoured share plans.
A failure to comply will result in automatic penalties and the withdrawal of tax-favoured treatment for some employee options.
As announced in 2014, all new and existing employee share plans and arrangements need to be registered online. Arrangements cover the acquisition of employment-related securities generally, not just under a formal plan.
Companies will also need to self-certify that any tax-favoured share plans meet certain requirements by 6 July 2015. This is because the process of HMRC approving tax-favoured plans has been replaced by the self-certification process.
Previously, companies were required to file share plan annual returns (i.e. the EMI 40, Form 42, Form 34 (SAYE), Form 35 (CSOP) and Form 39 (SIP) with HMRC on paper by 6 July of the relevant year. These forms will now be available as online versions to be completed through the HMRC online system by 6 July 2015. There will be automatic penalties for late filing after 6 July 2015.
Companies who have granted Enterprise Management Incentive (EMI) options after 6 April 2014 will have already registered their EMI plan online in order to notify the grant of EMI options. Where options are granted over shares in a non-UK company to employees of a UK subsidiary, it will be simpler for the UK subsidiary to be responsible for the online registration, self-certification and end of year reporting.
Next steps – start early
If you have not used the HMRC online site for employment-related securities already, it can take over two weeks to register your share plans. The end of year reporting cannot take place until registration has happened so you do not want to leave it until the last minute.
You can set up a new login by entering the Government Gateway site and registering. To register on the Government Gateway site you will need your PAYE reference number and Accounts Office reference. Please note that your activation code for this site will be sent through the post and may take seven days to arrive.
Once you have your activation code, the new online system is accessed through HMRC's online services. Once you have set up your account, you will need to register your share plans. This may take up to two weeks following your registration for HMRC to process and verify. Once the registration of the share plan has been processed and verified, you will be able to view your unique scheme reference on the online system. Following the successful registration of the share plan, you will be able to complete the end of year returns.
We would advise leaving plenty of time to complete this process so you can meet the 6 July deadline for end of year reporting.