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An annual return needs to be submitted by 6 July 2025 for the 2024 to 2025 tax year for each share plan that has been registered with HMRC online (unless it was de-registered in a previous tax year). The return will need to cover all reportable events between 6 April 2024 and 5 April 2025.
Non-tax-advantaged awards and plans must be reported on the "Other" template. There are separate templates for each of the tax-advantaged CSOP, SAYE, EMI and SIP plans. If the template does not match the plan registration, the submission will be rejected. ALL template forms and guidance on how to complete them can be found here.
Reportable events include:
- For options – the grant (including on a rollover/assumption), exercise, assignment or release for consideration (not a lapse for nil consideration) or the receipt of a benefit in connection with the option.
- For Restricted Stock Units (RSUs) / conditional share awards – the grant, vesting, assignment or release for consideration (not a lapse for nil consideration) or the receipt of a benefit in connection with the award.
- The purchase of shares under share purchase plans (and potentially the grant of purchase rights).
The return needs to be filed by the entity that registered the plan with HMRC using the plan's unique reference number. For those companies that do not regularly access HMRC's website, now is the time to relocate those log-in details or identify the person who has access. Ahead of the return season it may be worth adding more than one administrator to your Government Gateway account just in case your primary administrator is not available to log in and submit your returns ahead of the deadline. To set up a backup administrator, log into your HMRC business tax account and follow the guidance to add a team member.
Before submission, files uploaded to HMRC's website will be checked for formatting errors by HMRC's checking service. The files are format sensitive and so companies are encouraged to check their files in advance of making the submission. This can be done here.
The website that HMRC introduced to report on the service availability of HMRC's website and any planned downtime remains available. It can be accessed here.
HMRC guidance
Net settlement
Please see HMRC's updated guidance here regarding the net settlement of securities, option awards, and the associated limitations which this has on claiming a corporation tax relief in the UK.
Net settlement versus 'sell-to-cover' arrangements are reported differently in your ERS return, and this will therefore highlight to HMRC if net settlement is being used. We are increasingly seeing HMRC challenge the corporation tax deduction position of companies using net settlement procedures. Given HMRC challenges, we would urge you to get in touch with us if your company is using net settlement to cover employees' tax liabilities.
EMI notifications
If you operate an EMI scheme and you have granted options on or after 6 April 2024, you must submit your EMI Notifications to HMRC by 6 July 2025. Failure to notify HMRC of your EMI option grants will mean that they do not qualify for beneficial EMI tax treatment.
Saving copies of ERS return and EMI notifications
You should save a copy of your ERS return or EMI notification for your own records before you submit it to HMRC. You should take screenshots of each page along with the confirmation page if you are filling in the details online instead of uploading a file.
De-register scheme if no longer valid
You should de-register your scheme if you have registered a scheme in error or if it is no longer operating. Please note you must still submit an annual return for the tax year in which the final event date falls.
If you need any assistance with the preparation of your annual share plan return, please do not hesitate to contact a member of your Baker McKenzie team.
Sonal Okhade, Trainee, has contributed to this legal update.
