Employees And Shares The administration of share plans for employees and directors, known as “Employment Related Securities” or “ERS”, is changing. This covers all employee share related transactions such as HMRC approved schemes, share option plans or any other scenario where an employee or director receives an interest in shares or securities.
Returns for Year To 5 April 2014
This is the final year of the old regime, such that a company will submit paper returns (whether the relevant return is for an approved share plan, such as EMI, or Form 42 which covers any ‘unapproved’ arrangements).
There are three aspects to this:
1. Self-certification of HMRC approved share/share option plans.
2. Annual returns for year ended 5 April 2015 onwards.
3. Ongoing notifications from 6 April 2014.
Self-Certification Of Tax-Advantaged Plans
New tax-advantaged share plans no longer require prior HMRC approval. Companies must now register new tax-advantaged share plans with HMRC and confirm that the requirements of the relevant legislation are met.
The deadline for self-certification is 6 July after the end of the tax year in which the new plan is first operated.
Existing tax-advantaged plans must be registered with HMRC and “self-certified” by 6 July 2015.
Failure to self-certify can result in the loss of tax advantages for HMRC approved plans (including previously approved schemes). In addition, automatic penalties will apply for late filing.
Qualifying changes to “key features” and any variation of share capital affecting SAYE or CSOP plans made after 6 April 2014 must be notified to HMRC.
Online Registration With HMRC
In order to self-certify and make annual returns, online registration must be made by 6 July following the end of the relevant tax year.
Registration will need to be done earlier where, for example, a company needs to notify HMRC of the grant of EMI share options.
Registration needs to be done by logging on to the exiting PAYE Online service, at which point the user will be presented with various services, one of which is to register an employee share scheme (of which you may have more than one).
The registration/administration process depends on who will be responsible within or on behalf of the company, as follows:
ERS to be administered by existing external PAYE agents
The PAYE agent will automatically be enrolled for the ERS service but will need to request a separate client authorisation to do ERS work as this is a new role.
Company does PAYE in-house but wants external ERS agent
The agent needs to be registered for HMRC Online services for agents. Once registered, the agent can request client authorisation for access to the ERS service.
Company wants to limit agent access to specific schemes
All schemes registered under a specific PAYE reference number can be viewed by any authorised ERS agent.
If you want to limit an ERS agent to view only particular schemes then you will need to register the scheme(s) under separate PAYE reference numbers. The ERS agent will need to request client authorisation using the PAYE reference under which the specific scheme(s) is registered.
PAYE and ERS service – access within the company
Access to the ERS service is through PAYE online. This means PAYE details as well as ERS details will be visible to those in the company with employer access.
If companies want to prevent those dealing with ERS having access to PAYE details, they will need to give them agent only access. As agents cannot register schemes or arrangements, someone with full PAYE for employers’ access will need to do this.
It is not possible to prevent access to the ERS service for those who already have PAYE access. However, we understand from HMRC (to be confirmed) that no individuals’ details or share/securities details will be visible on the ERS service.
Notices and Reminders
For the year to 5 April 2015 onwards, HMRC will no longer issue either notices to file or reminders.
Our company has Employees And Shares specialists who help our clients design, implement and administer such arrangements.
Harbour Key Limited
+44 (0) 1242 244115
+44 (0) 1242 241747