Following the end of the UK tax year on April 5, 2019, annual share plan returns can now be filed online with HMRC. All companies with open share plan registrations with HMRC are required to submit an annual return, even if it is a nil return (i.e., even if there has been no share plan activity during the 2018/19 tax year). The deadline for submission is July 6, 2019.
Please note that HMRC will not send companies a reminder to file their share plan returns.
Annual Share Plan Return Process
An annual return needs to be submitted by July 6, 2019 for the 2018/19 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 April 6, 2018 and April 5, 2019. 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 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 remain the same as last year.
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.
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 last year to report on the service availability of HMRC's website and any planned downtime, remains available. It can be accessed here.
HMRC has noted that the most common errors on the share plan returns are:
- Using drag and drop to fill in the template, which can increase numbers incrementally instead of copying. This can be problematic for PAYE references and addresses
- Entering outdated or incorrect PAYE reference number
- Not using pounds currency, which can lead to amounts appearing inflated
HMRC still see a significant number of companies forgetting to file returns or filing late returns. For the 2017/18 tax year (which ended on April 5, 2018), HMRC issued 9,253 penalties to companies that missed the deadline. HMRC then issued a further 6,014 penalties for being more than three months late.
Companies should ensure that they have submitted a return for all open registrations. This includes any share plans that were registered by companies that were acquired during the tax year. For these registrations, you will need to locate the log-in details that match the original registration. If companies have any registrations that are no longer needed, you should consider de-registering to stop ongoing reporting requirements (and the risk of penalties for late filing). An annual return for the year of any final events will still need to be submitted.
For those companies that are operating share plans in the UK for the first time, they will need to register the share plan with HMRC before being able to submit the annual return. Registration is made through the "PAYE for Employers" section of HMRC's website. Any new tax advantaged plan or sub-plan will need a separate registration.