In more detail
An annual return needs to be submitted by 6 July 2023 for the 2022/23 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 that occurred between 6 April 2022 and 5 April 2023. 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. The template forms and guidance on how to complete them can be found here. These have been updated since last year and so should be used to avoid submission errors as the previous templates will no longer be accepted by HMRC.
By way of reminder, 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. HMRC's website operates automatic penalties for open share plan registrations if a return is not received by 6 July 2023. The initial penalty is GBP 100 with additional penalties of GBP 300 each becoming due if the return remains outstanding after 3, 6 and 9 months from the deadline.
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
HMRC has published its Employment Related Securities Bulletin 47 containing updated guidance on Employment Related Securities (ERS) annual return templates. HMRC is introducing changes to the ERS annual return templates from 6 April 2023, which will require mandatory completion of the:
- 'PAYE reference of the employing company'
- 'Is PAYE operated Y/N'
- Employee's National Insurance number
Please see here for further guidance on the associated changes.
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.
