Employment Related Securities Bulletin 55 (May 2024)
Find out about how to register a late Employment Related Securities (ERS) scheme, submit a late Enterprise Management Incentives notification, ERS end of year filing deadline, and updates to the Employee Tax Advantaged Share Scheme User Manual.
Late scheme registrations
You must register for a new Employer Related Security (ERS) scheme and submit an ERS return on or before 6 July following the end of the tax year in which either the first:
- award or option was granted
- reportable event happened
An ERS scheme can be tax advantaged or non-tax advantaged.
There are specific requirements for registering tax advantaged share schemes, such as a:
- Company Share Option Plan (CSOP)
- Save As You Earn (SAYE) scheme
- Share Incentive Plan (SIP)
- Enterprise Management Incentive (EMI) scheme
CSOP, SAYE and SIP
If you register a CSOP, SAYE or SIP scheme late, it’s only acceptable if HMRC agree that you have a reasonable excuse.
If you miss the deadline for registering, you must set out your reason for missing the registration deadline, either by email to shareschemes@hmrc.gov.uk or in writing.
Charities Savings and International 1
HMRC
BX9 1UA
If we are satisfied you have a reasonable excuse for missing the deadline to register, we’ll then explain the next steps, including the safe data transfer options to enable you to submit any late returns.
The HMRC preferred method for data transfer is through the Secure Data Exchange Service (SDES).
Submitting a late return, may result in you being charged late filing penalties.
Find out more information about how to appeal any late filing penalties.
Find out more information about how to register an ERS scheme and what to do if you missed the deadline.
EMI notifications
For Enterprise Management Incentives (EMIs), you must tell HMRC about a grant of an EMI option. To do this, you will need to register your EMI scheme first. Once you’ve registered, you will need to submit your EMI notification by the deadline and submit your end of year return by 6 July following the end of the tax year.
If you miss the deadline for submitting an EMI notification you must set out your reason for missing the deadline by email to shareschemes@hmrc.gov.uk, or in writing.
Charities Savings and International 1
HMRC
BX9 1UA
If we’re satisfied you have a reasonable excuse for missing the deadline for submitting an EMI notification, we’ll then explain the next steps, including how to submit any late notifications.
End of year filing deadline
If you operate an ERS scheme you must file an end of year ERS return.
For the 2023 to 2024 tax year, you must submit an end of year ERS return on or before 6 July 2024. If you miss this deadline, you will receive a late filing penalty.
You must submit a return or nil return for every scheme that you have registered on the ERS online service.
If you’ve registered a scheme in error, or it is no longer operating, you must cease the scheme. You must still submit an annual return for the tax year in which the final event date falls.
If you’ve stopped being an employer and have ceased your Pay As You Earn scheme, you’ll also need to consider whether you need to cease your ERS scheme.
Penalty impacts
A £100 penalty will be issued automatically if the end of year ERS return, including nil returns where appropriate is not submitted on or before 6 July 2024.
Additional automatic penalties of £300 will be charged if the return is still outstanding 3 months after the original deadline of 6 July. A further £300 will be charged if it’s still outstanding 6 months after that date.
You must still submit an end of year or nil return to meet your filing obligations, even if you’ve received and paid the initial penalty.
Find out more information about how to handle ERS late filing penalties.
Subsidy Control Act
The Subsidy Control Act 2022 provides a new framework for the provision of subsidies within the UK.
EMI is now registered on the UK subsidy database as a scheme that gives a subsidy in the form of a tax measure. The Act requires a public authority including HMRC to report specific data in relation to a company that receives such a subsidy, where this is worth over £100,000.
As set out in the Subsidy Database Regulations — SI 2022/1153, this will include the name of a company.
The first reports will relate to EMI returns for the 2022 to 2023 tax year and will be made by 6 July 2024.
Find out more information about the Subsidy Control Act.
Save As You Earn (SAYE) income tax liability paid through payroll — amendments made to ETASSUM38140
Income tax for SAYE exercises most commonly occur when a change of control takes place.
This can present administrative difficulties for the new company, where large numbers of individuals incur a liability to Income Tax, which should be reported using Self Assessment.
The previous arrangements in Employee Tax Advantaged Share Scheme User Manual — ETASSUM38140 detailed that in these circumstances, the new company could apply to HMRC for authorisation to collect the Income Tax due through the payroll, providing this arrangement was purely voluntary.
Where arrangements were authorised, a full schedule of those participants choosing to have income deducted through payroll should have been sent to HMRC.
Additionally, to ease the administrative burden, we’ve updated our processes to remove the need for HMRC authorisation.
Read the Employee Tax Advantaged Share Scheme User Manual — ETASSUM38140 for more information.
Companies are automatically able to account for Income Tax through payroll, providing this arrangement is voluntary on the part of the participants. These participants must be allowed to deal with Income Tax under Self Assessment if they wish.
Companies will also no longer be required to provide a schedule of participants to HMRC. However, the tax collected should be paid over with the normal monthly remittance and fully accounted for in the end of year returns. This includes the SAYE end of year return.
Carer’s Leave Act 2023 — amendments made to ETASSUM53020
The Carer’s Leave Act 2023 provides employees who have certain caring responsibilities, the right to one week of unpaid carer’s leave.
The Carer’s Leave Regulations 2024 (SI2024/251), which contain the details, brings in the provisions on 6 April 2024.
Paragraph 18 in Part 2 of the schedule to the Carer’s Leave Act makes an amendment to the Income Tax (Earnings and Pensions) Act 2003 — Schedule 5 paragraph 26(3)(b). This determines whether an employee meets the EMI working time requirement. Any time on carer’s leave will effectively be treated as time spent working.
The Employee Tax Advantaged Share Scheme User Manual — ETASSUM53020 has now been updated.