As the 2023/24 tax year has recently ended, this is a good time for employers to start collecting information regarding Employment Related Securities (‘ERS’) transactions that occurred during the period 6 April 2023 to 5 April 2024 that they’ll need to complete the annual Employment Related Securities (‘ERS’) return for the tax year by the 6 July 2024 deadline.
There are different returns required depending on the type of ERS “scheme”. Specific returns will be required if the company operates an EMI, CSOP, SAYE and SIP. Employee share transactions occurring outside these tax advantaged schemes must be reported on an “Other” return.
The “Other” ERS annual return discloses the “reportable events” that occurred during the tax year and would include events such as:
- The acquisition of shares or securities by an employee, company office holder or someone in their household (e.g., a spouse) by way of gift, award, or purchase.
- The grant, exercise, release, assignment, cancellation, or lapse of share options.
- The lifting or variation of any restrictions attaching to any securities.
- Any securities disposed of for more than their market value.
Where ERS returns have been filed previously, a “nil” return must still be submitted even if no reportable events took place during the tax year.
Registration
All new ERS schemes, whether tax-advantaged, such as EMI, CSOP, SAYE or SIP, or not must be registered electronically before the annual return can be filed.
As the registration process can take up to 10 days, it is important to start the registration process early to ensure the 6 July deadline is not missed.
Late Filing Penalties
If the ERS return is filled after 6 July, the following automatic late filing penalties will arise:
| Late Filing | Penalty Charged |
|---|---|
| Initial penalty for missing the 6 July 2024 deadline | £100 |
| Additional penalty if ERS return has not been submitted by 6 October 2024 | £300 |
| Additional penalty if ERS return has not been submitted by 6 January 2024 | £300 |
| Additional penalty if ERS return has not been submitted by 6 April 2025 | £10 per day |
How MHA Can Help
You can rely on us to help you with all aspects of your ERS reporting requirements such as
- Identifying what needs to be reported to HMRC.
- Preparing the ERS return.
- Helping you get up to date with returns from prior years.
If you would like bespoke advice on creating the right share incentive scheme or assistance with equity plans as part of your reward strategy, our experienced team will help you create and implement the right option tailored to suit your company’s needs.
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