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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Schedule 2 share incentive plan (SIP): Notification & Enquiries: Alterations

A “key feature” is any provision of the SIP which is necessary in order for the requirements of Parts 2-9 of this Schedule to be met in relation to the SIP (paragraph 81B(8)). Changes to a “key feature” can for example include (this list is not exhaustive):-


  • changes to the eligibility of the individuals to participate in a plan,
  • changes to the shares subject to the plan,
  • amendments to existing awards which might also be as a result of a company reconstruction,
  • a variation in share capital,
  • a change of Trustee.

Where a company makes an alteration to a key feature of the plan, it must provide details of this in its annual return for the tax year in which the alteration is made. It must also certify in the return that the alteration does not result in the plan no longer meeting the requirements of Parts 2-9 of Schedule 2 (paragraph 81B(5)). This will also apply where a company makes an alteration to a “key feature” of any of the plan documents to the extent it involves noting a change to a “key feature” of the Schedule 2 SIP.

Failure to report details of an alteration or variation in a return may lead to a penalty of up to £5,000.