Share scheme returns – another tax deadline looms!

By Clare Munro, Tax Partner
claremunro@lubbockfine.co.uk
020 7490 7766

The end of the 2016/17 tax year fired a starting gun for various employee tax reporting issues. P11Ds for benefits in kind is perhaps the most obvious one, but, with benefits increasingly going through an employer’s payroll, actually reporting for employee share schemes has become just as important.

Deadline

The deadline is 6 July 2017 so there are now only a few weeks left to compile the information and get it into the right format for HMRC’s online filing system. If you’re an employer doing this for the first time you need access to the online system via the Government Gateway, which can take a week or more to come through so it’s important to allow enough time.

Reporting requirements

Any employer who makes share-based payments to employees will need to file a return with HMRC by 6 July following the end of the tax year. HMRC refer to this as ‘employment related securities’ and the return requires details not just of share awards, but also grants of options or rights to acquire shares, restricted stock units, lapsed options and those that have been exercised. Both tax advantaged and non-tax advantaged schemes must be reported.

In general employers need to file a nil return even if the shares, options etc. were granted before the tax year in question began.

The online process

Employers need to register ‘schemes’ both tax advantaged and non-tax advantaged.  The online employment related securities, or ERS, system, is accessed via the employer’s PAYE reporting system. Once the scheme is registered with HMRC, the employer can use the same system to submit an end of year ERS return.

The end of year returns require the employer to upload details in a defined format, templates for which can be found in the ERS section of the government website.

What next?

HMRC impose fines for failure to submit ERS returns before the deadline and so it is worth taking the time to compile the information in the right format and get it submitted on time. 

At Lubbock Fine we have been preparing and submitting these online returns for our clients since the system was introduced two years ago, and so we have dealt with a wide range of schemes and are set up to cope. If you’d like us to cope with your online ERS returns, please contact Clare Munro claremunro@lubbockfine.co.uk

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