Guidance

Employment Related Securities Bulletin 24 (June 2017)

Find out about the employment related securities (ERS) deadline extension, late filing penalties, how to check for errors and cease schemes registered in error.

ERS bulletins give information and updates on developments relating to employment-related securities, including the tax-advantaged employee share schemes.

We publish ERS bulletins when:

  • articles or updates are available
  • HMRC has any item to bring to your attention quickly

Any reference to Income Tax (Earnings & Pensions) Act 2003 (ITEPA) is to the amended legislation.

ERS online service – deadline for returns

HMRC is aware that the ERS annual returns online service has experienced some issues. We’re sorry this has prevented some returns from being submitted.

The service is now working and you can upload open document spreadsheet (ODS) templates and CSV files when submitting your annual return for the tax year 2016 to 2017.

The deadline for filing annual returns is 6 July following the end of the tax year, so for the tax year 2016 to 2017 it’s 6 July 2017. However, in view of the recent problems encountered by customers using the ERS service we’ve extended the deadline to 24 August 2017 for the tax year 2016 to 2017.

Please note that the deadline has not been extended for new scheme registrations.

Penalties for late returns

Penalties are charged if you file your return late. If your return is not filed by the extended deadline of 24 August 2017 the first late filing penalty of £100 will be issued on 25 August 2017.

Additional automatic penalties of £300 will be charged if the return is still outstanding 3 months after the original deadline of 6 July, and a further £300 if it’s still outstanding 6 months after that date.

If a return is still outstanding 9 months after the 6 July, daily penalties of £10 a day may be charged.

Late filing penalties

You should read the following information before contacting HMRC or appeal against a late filing penalty and take any action needed so you do not pay further penalties.

Returns, including nil returns, must be submitted for any schemes that you’ve registered on the ERS online service, such as:

  • Enterprise Management Incentives (EMI)
  • a non-tax advantaged scheme or award
  • Schedule 4 Company Share Option Plan
  • Schedule 3 Save As You Earn scheme
  • Schedule 2 Share Incentive Plan

A return is required even if you have:

  • already paid the initial penalty of £100
  • had no transactions
  • made an appeal
  • had an appeal allowed
  • ceased the scheme by entering a final event
  • registered the scheme in error
  • registered a duplicate scheme
  • notified EMI option grants

Once a scheme or arrangement has been registered on the service and remains live, you have a continuing annual obligation to submit an end of year return online by the deadline. The statutory deadline for returns is on or before the 6 July following the end of the tax year.

Cease a scheme registered in error or that is no longer required

To cease a scheme you should access the ERS service through the company’s PAYE for Employers account.

  1. Select ‘View schemes and arrangements’, you’ll need to scroll down to the bottom of your screen to view schemes and arrangements.

  2. Select the relevant scheme.

  3. On the next screen provide a date of final event.

  4. To close an EMI scheme, after selecting the scheme select ‘End of year returns’ and on the next screen select ’provide a date of final event’ - this can be a date in the past, but remember that an annual return must be submitted for the tax year in which the final event date falls.

ERS agents do not have the function in their agent ERS service to enter the date of final event so this can only be completed by companies.

If you’re still not sure why a scheme was registered on the ERS service you’ll need to speak to the company secretary or seek professional advice.

Please note a scheme can only be registered by someone in the company who has access to the company’s HMRC online services account.

Participating company information

It’s no longer possible to upload a file to provide details of all participating companies in a scheme. If this applies to you and you have a nominated customer relations manager (CRM) in HMRC then you should enter details of one participating company and then send a separate list of all participating companies to your CRM.

Check for errors

Use the ERS checking service accessible from the ‘View schemes and arrangements’ screen to check for formatting errors before submitting your annual return.

If you’re creating your own CSV file to submit your annual return you need to follow the published technical guidance for each type of return precisely. For example, your first line of data should start from cell A1.

If there have been no reportable events you’ll still need to file a ‘nil’ return.

If you’ve registered a scheme in error you’ll still need to file a ‘nil’ annual return and then ‘enter a date of final event’ to close the scheme.

Contact HMRC about ERS bulletins

Email: shareschemes@hmrc.gsi.gov.uk if you have any questions, feedback or suggestions for future articles.

Published 17 September 2018