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Employment related securities – changes to compliance and online filing

10th March 2014

HMRC is changing the way both new and existing employee share schemes and arrangements are administered, as from 6 April 2014. These affect Enterprise Management Incentives (EMI) and approved schemes, i.e. Company Share Option Plans (CSOP), Save As You Earn option schemes (SAYE) and Share Incentive Plans (SIP), which together will be referred to as “tax advantaged”, as well as other (hitherto unapproved, now non-tax advantaged) arrangements.


The main thrust is twofold:

  • Tax simplification for CSOP, SAYE and SIP. Applications to HMRC for approval of these schemes will become obsolete. Instead, employers must self-certify – initially and annually – that all conditions for tax-advantaged status continue to be satisfied. This will require registration online. 
  • Mandatory online annual reporting for the 2014/15 tax year (onwards) for all types of share scheme, having registered each scheme latest by 6 July 2015.

However, the existing paper returns will still be required for 2013/14, e.g. for EMI on form EMI40 and for non-tax advantaged schemes on form 42, to be filed no later than 6 July 2014. (For CSOP, SAYE and SIP the deadline is 7 July 2014.)

Much tighter sanctions will apply from 2014/15 on compliance failures, including:

  • Tax advantages lost if scheme registration is not made in time, and 
  • Increasing penalties where returns remain outstanding beyond the filing date. 

Companies affected should check they have the right access to the new HMRC employment related securities (ERS) service within the PAYE Online for employers’ service (or their agent does), so as to be ready to begin registration of schemes etc. as from 6 April 2014.

Contact Katharine Arthur, head of tax, for assistance with certifying your shares schemes, or setting up a new share incentive scheme for your employees.