From April 2014, all share schemes will need to be self certified by employers, as well as employers also having new online filing obligations for annual returns.
Further guidance has been issued regarding the introduction of self-certification and online filing, which will apply to all employee share schemes, including non tax advantaged arrangements.
This will affect the following share schemes:
- Enterprise Management Incentives schemes (EMI)
- Share Incentive Plans (SIP)
- Save As You Earn (SAYE)
- Company Share Option Plan (CSOP)
- Any other arrangements reported on Form 42
From April 2014 employers will need to begin registering existing and new employee share schemes with HMRC. To enable the employer to do this they must first be registered with the PAYE Online service.
It is therefore important to consider whether any “reportable events” are likely to occur in the year, in particular in connection with unapproved schemes, such as transfers of shares to employees or directors, or where there may not be any employees on the payroll, to ensure that the correct procedures are put in place now to enable timely online submission of the mandatory forms.
Where share schemes obtain tax advantages, the employer will be required to Self-certify that the scheme meets the criteria to obtain those advantages. No approval is required for EMI schemes. This shifts the burden of responsibility onto the employer, where previously it was necessary to obtain approval from HMRC. Again there are time limits within which this must be completed, otherwise the tax advantages will not be obtained.
It is anticipated that it will be possible to file the information online required on EMI 1 from April 2014, and it will become mandatory for all other share reporting to be done online from April 2015.
These details are still subject to finalisation and we will keep you updated.
The tax legislation covering share schemes is complex, and so please do contact us before implementing any transactions that may be covered.