If your business offers UK employee share plans, growth shares or share awards you need to do the following by 6 July 2022 for the 2021/2022 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 2021/2022 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. This would include growth shares and the acquisition of restricted and unrestricted shares.
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 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. This can take over two weeks, so you don't want to leave it until the last minute!
If you have previously registered a plan or arrangement but have no reportable events for the 2021/2022 tax year, you must submit a "nil return" to avoid automatic penalties arising for non-filing.
At the Spring Statement 2022, the UK government confirmed that it will not be expanding the EMI scheme. However, it is considering whether the Company Share Option Plan should be reformed to support companies that have 'grown beyond the scope of EMI'.
Please get in touch with a member of our Employee Incentives team if you need assistance or further information.