Employee Share Schemes | You may have reporting obligations by 6 July 2025
Employment Related Securities (ERS) return reminder
An ERS return is required each tax year to record share issues or share option movements during the year to employees/directors or their family members.
If you operate an employee share scheme or have awarded shares to employees in the tax year to 5 April 2025, you will need to register your scheme online and file an annual return in relation to the scheme with HMRC by 6 July 2025.
It is likely that you will have reporting obligations if any of the below apply to your business for the tax year:
- Issued shares to employees/directors or the employees/directors family members
- Granted share options to employees/directors or the employees/directors family members
- Have an existing scheme or set up a new ERS scheme in the period
- One-off transactions such as a director or employee acquiring shares by reason of their employment
In summary, companies with any type of employee or director share plan or incentive scheme are likely to be required to register plans and submit annual returns online. This includes Enterprise Management Incentives (EMI) schemes, non-tax advantaged schemes or awards, a Company Share Option Plan (CSOP), Save As You Earn Scheme (SAYE) or Share Incentive Plan (SIP).
No transactions
It is important to remember that you must file an annual return for any schemes registered on HMRC’s online service even if there have been no reportable transactions in the year. A nil return is required until a plan is formally closed on the HMRC system.
Avoid filing penalties
There are penalties for late filing and also for incorrect returns. It is therefore important that due care is given to the information to be reported.
Change to EMI notification for the tax year to 5 April 2025
For EMI options granted on or after 6 April 2024, the deadline for notifying the option grants to HMRC has been extended from 92 days following grant to 6 July following the end of the tax year.
As such, an EMI option granted on 30 June 2024, for example, would need to be reported by the deadline of 6 July 2025. The notification must be made separately from the filing of the EMI annual return.
Financial statements
All of these types of schemes will have an associated accounting impact. A financial reporting valuation will be needed in order to derive a fair value as at the grant date, which is then spread over the vesting period in the financial statements. Note that this valuation differs to a tax valuation. Please get in contact if you require any support on this area.
We are here to help
If you have any questions regarding what needs to be reported, or if you would like any assistance with online filing, please get in touch with your local Azets adviser or one of our Tax specialists.
