22. Juni 2021
If your business offers UK employee share plans, you need to do the following by 6 July 2021 for the 2020/21 tax year:
If you don't take the above actions in time, you will be subject to automatic penalties and will lose the tax-favoured treatment for certain share options.
The following automatic penalties will apply:
There is also a £10 per day penalty if the filing is more than nine months late and HMRC decides to impose such daily penalty.
There is also a penalty of up to £5,000 for a material inaccuracy in a return which is not immediately addressed.
If any reportable events have taken place concerning either tax-favoured plans or non tax-favoured plans and arrangements during the 2020/2021 tax year, you will need to report them. "Arrangements" includes the acquisition of employment-related securities by employees and directors generally, not just under a formal plan.
Reportable events include the following:
You will need to register all new employee share plans and arrangements online. You will also need to self-certify that any new tax-favoured share plans (EMI, CSOP, SIP and SAYE) meet certain requirements.
If you have previously registered a plan or arrangement but have no reportable events for the 2020/2021 tax year, you must submit a "nil return" to avoid automatic penalties arising for non-filing.
Due to the ongoing disruption caused by COVID-19, we would recommend that you leave additional time to complete your annual returns, as it may be more difficult to gather the required data.
If you have not used the HMRC website for employment-related securities already, you will not be able to complete your end of year reporting until you have registered your plan or arrangement with HMRC. In normal circumstances, this can take over two weeks, so you don't want to leave it until the last minute!
At Spring Budget 2021, the UK government published a Call for Evidence to examine whether to expand the current EMI scheme to more companies. In particular, the government sought views on the following aspects:
The Call for Evidence has now closed. We await an announcement from the government on next steps, although this may not be until the Autumn Budget.
Please get in touch with a member of our Employee Incentives team if you need assistance or further information.
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