If your business has issued shares, options or any form of equity to employees or directors, the Employment Related Securities (ERS) deadline is one you shouldn’t overlook.
With increased scrutiny and more detailed reporting expectations, getting this right matters more than ever. Here are five key areas to focus on before you file.
1/ Filing even with no activity
A return isn’t just required when transactions happen. If you have a registered ERS scheme, including an EMI or other share arrangements, you must submit an annual return every year until formally closed with HMRC.
If you miss the deadline, penalties will apply automatically and these start at £100.
2/ Make sure all schemes are registered
Before filing, check that all share schemes and arrangements are registered with HMRC.
This can include:
- Tax-advantaged schemes (EMI, CSOP, SAYE)
- Non-tax-advantaged options
- One-off share awards to employees or directors
If something hasn’t been registered, you won’t be able to report it properly, which could cause problems later on.
3/ Expect more detailed disclosures
HMRC is now expecting more data and consistency across ERS returns.
You’ll need to ensure all details are reported such as:
- Grant, exercise and disposal dates
- Number and value of shares
- Employee information
Returns aren’t just logged; they’re being reviewed and cross-checked.
4/ Don’t overlook EMI notification deadlines
For EMI options granted on or after 6 April 2024, the grant notification deadline is now aligned with the annual ERS/ EMI return deadline, meaning it must be completed by 6 July following the end of the tax year of grant.
This replaces the previous 92-day notification requirement for granted options, although earlier options may still fall under the old rules. Making sure this is done correctly is key to preserving the associated tax advantages.
5/ Getting it right matters
Ensuring ERS reporting is accurate and complete is key to avoiding unnecessary risk.
This is particularly important where a company is being sold, as ERS compliance is a standard area of focus during due diligence. Any gaps or errors are likely to be identified and can delay or complicate transactions.
Final thoughts
With increasing scrutiny and expectation for detail, getting ERS reporting right first time is more important than ever.
By having a proactive approach, checking registrations, data, and key deadlines, you can save significant time and disruption later.
PM+M can help by reviewing your returns, identifying potential issues early, and giving you confidence that everything has been reported correctly.
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