Registering Your Employment Share Scheme with HMRC

Introduction

If you operate an employment share scheme, you must register it with HMRC and meet specific deadlines to protect valuable tax benefits for both your company and your employees. The registration process and timelines differ depending on the type of scheme you're running, with strict deadlines that could result in lost tax advantages if missed.

What are employment-related securities schemes?

Employment-related securities (ERS) schemes allow you to reward employees with company shares or share options. These schemes fall into two categories:

Tax-advantaged schemes offer special tax benefits approved by HMRC. These include Share Incentive Plans (SIP), Save As You Earn schemes (SAYE), Company Share Option Plans (CSOP), and Enterprise Management Incentives (EMI).

Non tax-advantaged schemes don't carry special tax reliefs but still need to be registered when certain events occur, such as employees acquiring or disposing of shares.

Registration deadlines for tax-advantaged schemes

You must register new tax-advantaged schemes by 6 July following the tax year in which you set up the scheme. This deadline applies when you make the first award of shares or grant the first options.

This 6 July deadline applies to:

• Share Incentive Plans
• Save As You Earn schemes
• Company Share Option Plans

Once registered, you must also submit an end-of-year return (or nil return if nothing to report) by 6 July following the end of each tax year.

Enterprise Management Incentives (EMI) deadlines

EMI schemes have different notification rules depending on when you grant the options:

For options granted before 6 April 2024: You must tell HMRC within 92 days of the date you grant the option.

For options granted after 6 April 2024: You must tell HMRC by 6 July following the end of the tax year in which you grant the option.

You need to register your EMI scheme first, then submit your EMI notification by the relevant deadline. You must also submit an end-of-year return by 6 July following the end of each tax year.

Registration deadlines for non tax-advantaged schemes

For share schemes without tax advantages, you only need to register when a reportable event occurs. Reportable events include employees acquiring or disposing of securities, or assigning or releasing share options.

You should register your non tax-advantaged scheme by 6 July following the tax year when the first reportable event happened.

Once registered, you must submit an end-of-year return (or nil return) by 6 July following the end of each tax year, even if you have nothing to report.

Before you register: setting up online access

Before registering any ERS scheme, you must be registered as an employer with HMRC. If you need to register as an employer, allow up to 30 working days to receive your PAYE reference number.

Once you have your employer PAYE reference number, you must enrol for and activate the PAYE online service for employers. You'll need your PAYE reference and Accounts Office reference, which are included in the letter HMRC sends confirming your registration.

To add the PAYE service to HMRC Online Services:

1. Sign in to HMRC Online Services for employers or create an account

2. Select 'Add a tax, duty or scheme now'

3. Select 'Employers or intermediaries, for example PAYE for employers or CIS'

4. Select 'PAYE for employers'

5. Complete the information required on screen

HMRC will send you an activation code by post. You must use this to activate your account within 28 days of enrolment.

How to register your ERS scheme

Once you've added the PAYE online service, you can register your scheme:

1. Sign in to HMRC Online Services for employers

2. Go to the 'Employment related securities (ERS)' section

3. Select 'Register or view your schemes and arrangements'

4. Select the ERS scheme type you want to register and select 'Next'

5. Fill in the self-certification declaration

6. Sign in again to complete your registration

HMRC will issue an ERS Scheme reference number online within 7 days. You can find this in your HMRC Online Services by viewing the 'Employment related securities (ERS)' section and selecting 'View schemes and arrangements'.

What information you need to provide

When registering your scheme, you'll need to complete a self-certification declaration. This confirms that your scheme meets HMRC's requirements for the type of scheme you're setting up. The exact information required depends on the scheme type you're registering.

If you miss the registration deadline

Missing the registration deadline risks losing tax benefits for you and your employees. If you miss the deadline to register a new CSOP, SAYE, SIP, or to submit an EMI notification, you must contact HMRC in writing.

You can contact HMRC:

• By email at shareschemes@hmrc.gov.uk
• By post at: Charities, Savings and International 1, HMRC, BX9 1AU

You'll need to provide a reason why you missed the deadline. If HMRC accepts you have a reasonable excuse, they'll explain the next steps, including how to register your scheme late and submit any late returns or EMI notifications. HMRC may ask you to use a safe data transfer method, such as the Secure Data Exchange Service (SDES), to submit late returns.

Penalties for late filing

Submitting a late return may result in late filing penalties. These penalties apply even if you successfully register your scheme late, so it's important to meet all deadlines once your scheme is registered.

Using an agent

If you want an agent to manage your ERS returns, they must complete the Online Agent Authorisation process. Agents can view and file returns on schemes that are already registered, but they cannot register or end a scheme on your behalf.

Sources

• Register your employment related securities scheme
• Late registrations for employment related securities

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.