Key Takeaway

Annual share plan returns must be filed with the UK tax authorities (Her Majesty's Revenue & Customs or HMRC) on or before 6 July 2018 to report information pertaining to employee share awards in the prior UK tax year (6 April 2017 to 5 April 2018). Companies are encouraged to submit their returns as early as possible.

Annual Share Plan Return Process

The annual share plan return must be filed online with HMRC on or before 6 July 2018 by the local entity that registered the plan using the plan's unique reference number. The template forms for the returns and guidance on how to complete the forms can be found here. We are happy to report that there have been no changes to the returns again this year.

Non-tax advantaged awards and plans must be reported under the "Other" template. There are separate templates for each of the tax advantaged CSOP, SAYE, EMI and SIP plans. As reported in our recent Clients & Friends Newsletter, HMRC continues to see share plans registered under the incorrect plan type. HMRC has provided guidance on how to identify the correct plan type.

The return must report:

  • the grant (including on a rollover/assumption), exercise, assignment or release of options or receipt of a benefit in money or money's worth in connection with the options;
  • the grant (including on a rollover/assumption), vesting, assignment or release of RSUs or receipt of a benefit in money or money's worth in connection with said awards; and
  • the purchase of shares under the ESPP (and potentially the grant of purchase rights).

As the files are format sensitive, companies are encouraged to check their files for formatting errors prior to submission by using HMRC’s checking service.

As companies may be aware, since moving to the online format, HMRC's website has occasionally been affected by technical issues. This year HMRC has introduced a website that informs users about the website's service availability, any planned down time and any service issues.

Reporting equity awards in connection with corporate transactions and for mobile employees can be complex. Once a registration is no longer needed (e.g. after a corporate transaction), the registration should be formally closed; otherwise ongoing reporting will be required and penalties may be imposed for a failure to file.

If you have any questions, or would like assistance with reporting these items or completing the returns generally, please contact your Global Equity Services attorney.

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