If you operate a share plan or there has been any type of equity transaction, involving UK employees or directors you will almost certainly have to submit a return to HMRC by 6 July to report all transactions in Employment Related Securities (ERS), also known as Share Plan Reporting. Private and listed companies should report annually. Where plans are operated by parent companies, the parent or a UK employing company should report.
Reportable transactions range from formal share plan activity to the acquisition of loan notes, gift of shares and disposals of shares for more than market value. The reporting obligation exists for private and listed companies and HMRC is increasingly looking at the correlation between payroll, corporation tax deductions and share plan reporting.
Download our guide to Share Plan Reporting which summarises the way employee or director share activity must be registered and reported in the UK.
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Below, we look at this further and explore the following:
When is the Share Plan Reporting deadline?
Transactions for each tax year should be included in the ERS return for that year which must be submitted by 6 July following the end of that tax year.
What are the penalties for a late return?
Penalties increase over time with £100 penalty for missing the 6 July deadline, £300 penalty issued on 6 October and a further £300 issued on 6 January. Daily penalties can then be applied from 6 April or 9 months after the deadline however we have never seen these applied in practice. The biggest risk for late returns is the additional attention from HMRC. We are seeing increasing levels of ERS compliance checks. Don’t take the risk of submitting your return late – now is the time to get prepared. Latest HMRC figures show that over one third of returns were submitted late.
How we can help you with Share Plan Reporting
Late returns trigger automatic penalties and late certification for tax advantaged share plans can be even more expensive. You can rely on us to help with all aspects of your reporting requirements so that you are fully compliant. Our Share Plan Reporting services include:
We recommend employers start the annual return process as early as possible. You will need time to identify all reportable events, such as where share options have been exercised or restricted stock units vested for internationally mobile employees. You should also allow time to identify and resolve any problems that arise.
Looking at implementing a share plan?
Do you want advice on how to create the right incentive plan to effectively recruit and retain the best talent? Our experienced team will help you create and implement the right share plan and other incentives to grow your business. Find out more about how we can help you implement the right Share plans and incentives.
Share Plan Reporting reporting is just one of the deadlines that employers need to be aware of for 2022. Read our guidance on how to ensure you have accurate data ready in time to meet all the reporting deadlines: Employer's Year End 2022