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January 6, 2015
As of 6 April 2014:
- All existing and new share plans need to be registered online with HMRC – including EMI option arrangements and non tax-advantaged plans (i.e. unapproved share options previously returned on Form 42).
- All grants of EMI options must now be reported online within 92 days of the grant date.
- The annual reporting for all share plans for the tax year 2014-15 onwards must be carried out online.
- The “working time declaration” by the employee is no longer part of the notification process (but see below).
HOW TO REGISTER
- Registration is through the PAYE Online system. Any active or live PAYE reference number operated by a company in the group can be used.
- Plans must be registered by the company, though subsequent reporting can be done by an external administrator or other agent.
- The deadline for registration of plans which already existed on 6 April 2014 or for which the first grant or award is during the 2014-15 tax year is 6 July 2015 – though we recommend that plans should be registered well before then.
- Any other share incentive arrangements (including an acquisition of options by a director or employee) which were previously reportable on Form 42 must also be registered online. A single registration may cover all such other arrangements (although it is possible to have multiple arrangements).
- EMI arrangements must be registered even if there are no separate plan rules (e.g. where there is simply an EMI option agreement).
- If a tax-advantaged plan forms a schedule to an unapproved plan, it must be registered as a separate plan.
- Non tax-advantaged plans may either be registered separately or batched together and registered as a single plan.
- Old non tax-advantaged plans do not need to be registered until the next tax year in which a reportable event occurs.
- The registered plan name must be meaningful, preferably including the name of the company and the type of plan.
- After a plan has been registered, the company will need to log back a few days later to obtain the unique registration number. This will not be the same as any HMRC reference which has been allocated to the plan in the past. It will also be different from the acknowledgement reference given at the time of registration.
NOTIFICATION OF EMI GRANTS
- The 92-day deadline for notification of EMI option grants to HMRC has continued to apply from 6 April 2014, but all notifications must now be made online.
- EMI option arrangements must be registered before grants can be reported online and so the registration deadline may effectively be brought forward.
- The working time declaration by the employee is no longer part of the notification process. However, the individual is still required to sign a written declaration about their working time. There is no template or model for this employee declaration. Copies of the employee’s signed declaration must be retained by the employer and HMRC may require that the declaration be produced to them. The wording of the old from EMI1 could be used or the declaration could be incorporated into EMI option agreements.
- Where the deadline for notification of an EMI option has been missed solely because of online service issues, this will be considered as a reasonable excuse for late notification.
Further details are available from HMRC.
- The old Forms 35, 40 (EMI) and 42 (unapproved) which had to be filed by post on July each year, have been replaced with online reporting for the tax year 2014-15 onwards. Automatic penalties will apply for late filing.
- A separate annual return is required for each registered plan.
- If non tax-advantaged plans have been registered as separate plans, an online return must be made for each individual plan.
For further information on any of the above please contact Sue Crawford.