16 April 2020
You need to do the following by the current deadline of 6 July 2020:
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 9 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 in relation to either tax-favoured plans or non tax-favoured plans and arrangements during the 2019/2020 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 2019/2020 tax year, you must submit a ‘nil return’ to avoid automatic penalties arising for non-filing.
Against the backdrop of the 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 online site 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 do not want to leave it until the last minute!
We will keep you updated should there be any updates from HMRC with respect to the timing of these returns or the position on penalties in the context of COVID-19.
Please get in touch with a member of our team if you need assistance or further information.
by multiple authors
by multiple authors