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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

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HM Revenue & Customs
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Schedule 3 SAYE option schemes: Option Notifications: Notice of enquiry

An enquiry may be opened into:

The declaration made by the company when notifying the SAYE scheme to HMRC (paragraph 40A see ETASSUM37030);

HMRC may send a notice of enquiry into the declaration made by the company secretary when notifying the SAYE scheme to HMRC no later than 6 July in the tax year following the tax year in which the ‘initial notification deadline’ falls. The ‘initial notification deadline’ is the 6 July in the tax year following that in which the first grant date falls. So for example if a company grants the first option under a scheme on 31 December 2014, and notifies the scheme on 31 March 2015, HMRC can open an enquiry any time up to and including 6 July 2016.

HMRC can enquire into whether the scheme meets the requirements of Parts 2-7 of Schedule 3 and also whether the scheme has been operated in accordance with the scheme rules.

If a scheme is notified after 6 July following the end of the tax year in which the first grant of option is made, HMRC may send a notice of enquiry no later than 6 July in the second tax year following the ‘relevant tax year’. The ‘relevant tax year’ is the tax year in which notice is given in this instance. So for example, if a company grants the first option under a scheme on 31 December 2014 and notifies the scheme on 31 December 2015, HMRC can open an enquiry any time up to and including 6 July 2017.

An enquiry may also for example, be opened into the declaration made by the company when notifying an alteration to a key feature or variation of capital (see ).

HMRC may send a notice of enquiry into a declaration made by the company secretary when notifying an alteration to a key feature or variation of capital, at any time within 12 months from the date on which the return containing the declaration is given (paragraph 40F(3)).

A notice of enquiry can be issued at any time if HMRC have reasonable grounds for believing that the requirements of parts 2-7 of Schedule 3 are not met or have not been met in relation to the SAYE scheme (paragraph 40F(4) and (5)).

There is no statutory definition of “reasonable grounds” and this therefore takes its ordinary meaning.

A notice may be given and an enquiry undertaken even if the termination condition has been met in relation to the SAYE scheme (paragraph 40F(6)).

Where a scheme was approved by HMRC prior to 6 April 2014, it is accepted that the scheme met the requirements of the legislation at the date of approval. The approval will not be reviewed by HMRC as part of an enquiry unless new information comes to light which was not available at the time the approval was given.