Employment Related Securities - Annual Return Reminder

As you will no doubt be aware, following the end of the 2020-21 tax year on 5 April 2021, the annual Employment Related Securities (“ERS”) return is due to be received by HMRC by 6 July 2021.

When is a return needed?

If you have any share schemes or other ERS arrangements (such as transactions involving employees or directors and any type of shares, loan notes or other securities, or any carried interest or co-invest arrangements) an annual return is required with HMRC. If you have any previously registered schemes which have not been closed with HMRC, an annual return is required for each, even if there have been no transactions.

What needs to be reported?

A nil return should be submitted for any schemes which have not had a “reportable event”. Otherwise, a full return, including details of the relevant events, will need to be submitted.

Reportable events include, but are not limited to, the following (in respect of any employee or director):

• acquisition of securities;
• grant of share options;
• exercise of share options;
• lifting or variations of restrictions (including vesting) on securities held; and
• other events which create a tax charge (such as the discharge of a notional loan, artificial enhancement of market value etc.)

Practicalities

Registrations of ERS schemes, and filing of annual returns, must be made via HMRC’s online portal (here). If you have not previously obtained a Government Gateway ID, or registered your ERS scheme online already, the process may take a number of weeks and should be started as soon as possible.

Once the scheme is registered, the annual return must be made in a specified format, using a template provided by HMRC (here).

If you have any tax advantaged schemes (such as EMI, CSOP, SAY, SIP) these will have separate references and a return must be made for each.

For non-tax advantaged schemes one registration may cover all group companies participating in a scheme, so only one company within that groups needs to file (but will need to include details of all reportable events from each group company).

If the ERS return is not received by HMRC by 6 July, automatic penalties (starting at £100) will apply.

Other year end tasks

We have produced a summary document setting out some of the other key year-end considerations from an employment tax compliance and reporting perspective which we hope you find useful to review, such as:

• Short Term Business Visitor reporting;
• P11D submission; and
• PSA calculations

To view this document, click here>>

If you have any questions or would like assistance with anything connected to your reporting obligations, please feel free to contact us at n-site@fticonsulting.com.

For more information, visit: FTI Consulting and N-Site. 

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