Employee Share Plan Annual Reporting

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All UK businesses operating employee share plans or equity-based incentives arrangement to employees need to submit an annual return. This includes tax-advantaged share plans such as EMI, CSOP, SAYE and SIP as well as any non-tax advantaged plans or arrangements such as unapproved options, conditional share awards (or restricted stock units), growth share plans etc. A separate return is needed for each share plan registered with HMRC.

Key Deadline

The final date to submit your annual returns is 6 July 2024, for the tax year 2023-24.

Why This Matters

It’s essential for every UK business to comply with HMRC’s requirements by submitting an annual return for each registered share plan. This is not just a routine procedure; it’s a legal obligation that helps ensure transparency and compliance with tax laws.

No Reminders from HMRC

Please be aware, HMRC will not issue reminders. It’s crucial to stay ahead of your compliance obligations without depending on external prompts.

Penalties for Late Filing

£100 if you miss the 6 July deadline. An additional £300 if filed after three months. Another £300 if filed after six months.

Record Keeping

Ensure you take screenshots of each step of your reporting process. HMRC does not acknowledge submissions, so keeping your own records is vital.

What to Report

Your return must include all relevant activities from the last tax year (6 April 2023 to 5 April 2024), such as:

  • the grant, exercise, cancellation, lapse or release of options;
  • the grant, vesting, assignment or release of other share awards like conditional share awards or restricted stock units;
  • the grant of SIP awards and SIP shares ceasing to be subject to the SIP;
  • post-acquisition chargeable events in relation to restricted securities;
  • post-acquisition benefits received in relation to convertible securities;
  • other post-acquisition benefits received in relation to employment-related securities;
  • discharges of notional loans;
  • artificial enhancements of market value of employment-related securities; and
  • employment-related securities sold for more than market value.

    • Even if no transactions occurred, you are still required to file a ‘nil return.’

    Consideration for Inactive Plans

    If your plans no longer have active options or awards, and no new grants are expected, it may be prudent to close the plan online.

    How to File

    Returns must be submitted using your plan’s unique reference number, either directly by your company or through an appointed agent.

    Recent Update

    For EMI options granted on or after 6 April 2024, there is a new deadline for notifying the grant; the new deadline is 6 July following the end of the tax year (previously, 92 days from the date of grant). HMRC has confirmed that the notification for the grant of EMI Options can be made earlier.

    For additional details or specific inquiries, feel free to contact JD Ghosh or David Turney.

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