• Share Plan
    Reporting 2021

    Does your organisation need to file a return?


Share plan reporting 2021

29 March 2021

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.

Managing your employee share plans and designing new arrangements as we continue to navigate the COVID-19 crisis will require the consideration of many new additional areas. There will be many design issues and unintended tax consequences to deal with. Read our full summary of what you need to know now.

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.

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.

BDO 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:

  • Identifying all share scheme reporting obligations
  • Assistance with registering plans
  • Becoming your ERS agents so that we can complete and submit the share plan returns
  • Assisting with historic reporting to ensure your records are up to date, to put a stop to further penalties.

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. 

Read more on Share plans and incentives