Simon Littlejohns, Partner and Head of Tax at Chartered Accountants Friend Partnership Limited, with offices in Birmingham and London, discusses share scheme changes.
As from 6 April 2014 all share schemes will have to self-certify. HMRC approval will no longer be needed. Also, from 2015 the annual returns will have to be made online.
The new system for share scheme administration is called ERS. All existing and new share schemes need to register through ERS and self-certify, in order for any share or option awards made from 6 April 2014 to qualify for tax advantages. All share schemes must register by 6 July 2015 or the tax advantages of the share scheme will be lost, even if the scheme already has HMRC approval.
A company may register for ERS at any time. We can register on behalf of our clients where we are already registered with HMRC’s online service for tax agents.
When enterprise management incentive (EMI) share schemes grant share options, that grant must be notified to HMRC within 92 days. Where EMI share options are granted on or after 6 April 2014, the notification to HMRC must be done online. However, the EMI scheme must be registered with ERS before those notifications can be made.
The annual share scheme returns (forms 42 etc) for 2013/14 must be submitted by 6 July 2014, but will have to be submitted on paper for this year. The electronic versions of the annual returns will be made available in October 2014. Penalties for not submitting annual share scheme returns online, or on time, will apply from July 2015.