The issuing of Employment-Related Securities Bulletin 55 (May 2024) is a useful reminder that the online filing season has begun for all employment-related securities (ERS) matters.
The Bulletin covers several matters, none of which are new or unexpected but all of which it is timely to consider:
- Late scheme registrations
- A scheme must be registered and/or an Online ERS return filed by 6 July after the end of the tax year in which an award or option was granted or a reportable event occurred.
- This applies to both tax-advantaged and non-tax-advantaged schemes.
- Registering late will give rise to penalties unless the taxpayer can satisfy HMRC that they have a Reasonable excuse for missing the filing deadline.
- End-of-year filing deadline
- For 2023-24, an ERS return must be submitted by 6 July 2024.
- A full return or nil return must be made for any scheme currently registered.
- If a scheme has been registered in error the scheme can be ceased. An annual return will still be required for the tax year in which the final event date falls.
- Penalty impacts
- There is a £100 automatic penalty for failing to meet the submission deadline.
- Further automatic penalties of £300 are charged if a return is still outstanding after the first three months, and then again six months from the original deadline.
- A return must still be submitted even if any penalty charge has been paid.
- Subsidy Control Act 2022
- Enterprise Management Incentives (EMI) are included in the Subsidy Control Act database. HMRC must report specific data in relation to a company that receives such a subsidy where this is worth over £100,000.
- Save As You Earn (SAYE): Amendments to ETASSUM38140
- Income Tax liabilities from SAYE exercises most commonly occur when the ownership of a company changes.
- To ease the administrative burden in arranging to settle these Income Tax liabilities through payroll, the user manual has been amended to remove the need for prior HMRC authorisation.
- Provided the arrangement is voluntary on the part of the participants in a SAYE scheme, companies are automatically able to account for tax through payroll.
- Companies will also no longer have to provide a schedule of participants to HMRC. The tax collected should be paid over with the normal monthly payments and incorporated into the end-of-year returns including the SAYE return.
- Carer's Leave Act 2023: Amendments to ETASSUM53020
- This Act provides employees with certain caring responsibilities with the right to one week of unpaid carer's leave.
- The user manual reflects the new regulations that take effect from 6 April 2024.
- In determining whether an employee meets the EMI working time requirement, any time spent as a carer's leave will be treated as time spent working.
Useful guides on this topic
Employee shares: the Employment-Related Securities rules
What are the tax consequences when a company gives shares to an employee or director? What are employment-related securities? What is best: shares or share options? How do you set up a share scheme?
Employment-Related Securities Update 2024
Employee shares, share options and shares schemes: a mini-CPD update on what's hot or not in Employment-Related Securities in 2023-24 and 2024-25.
EMI: Enterprise Management Incentives: at a glance
What is the Enterprise Management Incentive (EMI) scheme? What are the qualifying conditions? How do you set up an EMI share option scheme?
EMI: Checklist
EMI share option checklist for employers. What are the rules for setting up an EMI share option scheme? What does an employer need to do to create an EMI share option scheme?
Penalties: Employment-Related Securities and share scheme returns
What are the penalties for late and inaccurate share scheme returns? When do they apply?
Grounds for appeal: Reasonable excuse (freeview)
What is a 'reasonable excuse' in terms of making an appeal against a tax penalty for late filing, late payment or error?
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