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This publication is available at https://www.gov.uk/government/publications/employment-related-securities-bulletin/employment-related-securities-bulletin-no-26-march-2018
The employment related securities (ERS) bulletin provides information and updates on developments relating to employment related securities, including tax advantaged employee share schemes.
This bulletin contains articles on:
- Save as You Earn (SAYE) savings holiday
- ERS online data
- common issues
- top things to remember
You should send any queries about this bulletin to firstname.lastname@example.org.
The bulletin will be published as and when sufficient articles or updates are available, or when HM Revenue and Customs (HMRC) has an item that it wishes to bring to your attention quickly. We welcome any suggestions for future articles although we can’t guarantee publication.
A reference to ITEPA is a reference to the Income Tax (Earnings & Pensions) Act 2003 as amended.
Remember to electronically submit your employment related securities annual return for 2017 to 2018 on or before 6 July, following the end of the tax year.
All annual returns for ERS have to be submitted online by 6 July. All new schemes established during 2017 to 2018 should be registered by 6 July. For new Company Share Option Plan (CSOP), Share Incentive Plan (SIP) and SAYE schemes established during 2017 to 2018 - these schemes can’t be registered once the 6 July deadline has passed and you’ll be prevented from submitting an annual return.
SAYE savings holiday
Autumn Statement 2017 announced an extension to the SAYE savings holiday for employees on qualifying parental leave from 6 months to 12 months. This was due to take effect from 6 April 2018.
After receiving representations from the share plan industry, the government is delaying implementation of the extended SAYE savings holiday. This is to provide plan providers and administrators with time to make and test system changes.
The government has also announced that the SAYE savings holiday will now be extended to 12 months for all SAYE plans, not just those with qualifying parental leave. This change will take effect on 1 September 2018.
HMRC will update the SAYE prospectus and guidance in the Employee Tax Advantaged Share Scheme User Manual (ETASSUM) to reflect these changes.
ERS online data
Please treat the following data as approximate:
- schemes registered – 25,000
- 2016 to 2017 – £100 penalties (7,100) and £300 penalties (4,600)
- appeals received 2016 to 2017
- 1st penalty 2,200
- 2nd penalty 600
- 3rd penalty 398
- penalties upheld – approximately 2,256
- returns still outstanding 3rd penalties issued – 2,700
The interpretation of this data for 2016 to 2017 alone suggests that employers are still failing to fulfil their obligations in terms of registering new schemes and filing annual returns on time.
Most common ERS issues encountered
In addition to what was highlighted in bulletin 25 below are the most common ERS issues that we continue to see.
Registering schemes incorrectly or duplication
Customers will select ‘register a scheme or arrangement’ instead of ‘view schemes or arrangements’. This causes duplication of the same scheme and often penalties are charged unnecessarily. If you only have one scheme that has already been registered you don’t need to register it again. You’ll be able to see the scheme registered and upload and submit returns by selecting ‘View scheme and arrangement’. You’ll need to scroll down the screen to make this selection.
Not filing in good time and failing to file nil returns
The filing deadline is 6 July following the end of the tax year. Failure to submit your return by the deadline will result in penalties being issued. A nil return is also required if there has been no reportable event.
Failing to correctly cease a scheme
This was covered in ERS bulletin 25. The important thing here is to remember to file your return for the relevant year after you’ve provided a final event date.
Misunderstanding of admin responsibility
The onus is on the employer to fulfil ERS obligations. HMRC accept this responsibility can be passed to representative bodies once registration has been undertaken but HMRC’s view is that the legislation is clear of the employers responsibility.
ERS online access and uploading templates
Please don’t alter the template in any way. This includes deleting tabs or columns, altering the format or changing the name of the template. If you do alter the templates you’ll receive an error message and the gateway won’t allow you to upload it.
HMRC acknowledge that the current templates display a non-current year but they should continue to be used and unchanged until amendments are made by HMRC.
Late notification of EMI options
After you register your EMI scheme you’ll receive an acknowledgment receipt. It can take HMRC up to 10 days to approve a scheme registration. It’s the company responsibility to check back via the ERS online service, under ‘view schemes and arrangements’ for their scheme reference number.
Registration is only the first step in ERS online for new EMI schemes. Once the scheme reference number appears in ‘view schemes and arrangements’ notification of the options is then required.
It’s imperative that this is done within the legislative timeframe of 92 days.
Currently the system won’t allow you to notify the options if the deadline has been missed.
Top things to remember
Registration of new tax advantaged schemes CSOP, SAYE, and SIP’s must be done by 6 July following the end of the relevant tax year.
The annual return filing deadline is 6 July following the end of the relevant tax year, to avoid penalties.
HMRC will not issue you with reminders to file your annual return. This is the responsibility of employers.
Once the scheme is registered it can take up to 10 days for you to be allocated a unique scheme reference number. You’ll not be sent an email, fax or letter. You must check for the reference number in ‘view schemes and arrangements’.
Only once the unique scheme reference number has been issued can you then submit EMI notifications of the grant of EMI options and submit annual returns.
The checking service in ‘view scheme and arrangements’ will only work once a scheme has been registered and allocated with a unique scheme reference number.
You must file an annual return even if there has been no reportable events.
To submit a nil return you don’t need to upload a blank annual return template.
Always select ‘view scheme or arrangement’ before registering a new scheme to avoid duplication. If you do register a scheme in error you’ll need to cease the duplicated record by recording a ‘final event date’ and submit a nil return. You must also remember to file a return for the original registered scheme to avoid late filing penalties being issued.
Remember the registration of a new EMI scheme is only the first step in the process. This isn’t the notification to HMRC of the grant of EMI options. You’ll need to notify this separately after the scheme has been registered and allocated a unique scheme reference number.
If you do miss any deadlines and believe that you have a reasonable excuse for having done so then you can contact HMRC at email@example.com. Please include full details of your scheme in your email.