HMRC say that they have started issuing penalty notices for late or non-filing of employment related securities annual returns.

Employment related securities returns should have been filed by 6 July 2016: an online annual return is required in respect of any unapproved share scheme, e.g. the award of shares to a director or employee.

The online return replaced the paper version 'Form 42'. The return is controversial because it uses open source software that although attractive to IT developers is not in general use amongst tax payers. 

Late filing penalties are £100, and then a further £300 if unfiled by 6 October 2016.

If schemes have been opened in error the only way to close it is to enter a 'final event' date, this should be the first day of the tax year in which it was opened.

Nil returns must still be submitted if the scheme is open but you think that futher shares may be issued in the future. 

Penalties may be appealed in writing to:

Employment Related Securities 
Room G46 
100 Parliament Street 

or by email: This email address is being protected from spambots. You need JavaScript enabled to view it..

Links to our guides

Penalties: Employment Related Securities

Employment Related Securities and share schemes

How to appeal a tax penalty

If you require assistance in completing the annual return please contact the Virtual Tax Partner support service.