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HMRC internal manual

Compliance Operational Guidance

Supporting guidance: employer compliance guidance by subject: employment related securities: overview

There are currently four HMRC approved or tax advantaged schemes that provide employees and employers with income tax and National Insurance advantages:

  • Schedule 2 Share Incentive Plan (SIP), see ETASSUM20000
  • Schedule 3 Save As You Earn (SAYE or Sharesave), see ETASSUM30000
  • Schedule 4 Company Share Option Plan (CSOP), see ETASSUM40000
  • Enterprise Management Incentives (EMI), see ETASSUM50000

Shares acquired under these schemes are generally free from income tax and National Insurance contributions (NICs).

From 6 April 2014 HMRC introduced a new online Employment Related Shares (ERS) service for registration and self-certification of these schemes.

Note: Agents will not be able to register schemes on behalf of companies.

Where the scheme (SIP, SAYE or CSOP) has been approved by HMRC before 6 April 2014, in order to retain tax advantaged status for 2014-15 it is mandatory for the company to make a declaration before 6 July 2015 that its scheme:

  • met the relevant legislative requirements at 6 April 2014 and
  • continues to meet the relevant legislative requirements.

Note: Where a plan was approved by HMRC prior to 6 April 2014, and the scheme has not been amended since approval, it is accepted that the plan met the requirements of the legislation at the date of approval.

There is no approval process for Enterprise Management Incentives. The employer is required to notify HMRC within 92 days of when an EMI option is granted.

Following declaration of the tax advantaged share scheme, the company must submit annual returns, including nil returns, for each year ending with the year in which the termination condition is met, see ETASSUM11400.

Company discovers an error in a return

If a company discovers that the return they have submitted to HMRC is incomplete or incorrect, they must submit a full amended return.

Scheme ceases

When a scheme ceases, the company is required to submit an annual return for the year in which the termination condition is met, see ETASSUM11700.