New HMRC Employee Share Scheme Filing Penalties Will Come Into Force From 6th July, 2015.

Does your SME know what new rules will apply to employee share schemes from next year?

Are you fully up to speed with what your business will need to do? The accountants at Steven Glicher think the answer is probably not, so we thought we’d try to explain the new rules and the new procedures you will have to follow. You should make a note of the date 6th July 2015, because from that date, UK firms will be required to have registered all employee share schemes with HM Revenue and Customs (HMRC) and filed all online returns in relation to them.

As things currently stand, businesses are only required to report employee share schemes to HMRC in the event of any statutory tax advantages or a taxable event – for example the grant of a share option or acquisition of shares by an employee during the relevant tax year. However, under changes announced in the Finance Act, 2014, any employee rights over shares in their employer must now be registered online with HMRC, and returns must be filed each year even if there has been no taxable event.

The new legislation potentially covers all types of employee share incentive schemes, even those that are not part of HMRC’s tax-advantaged schemes or where there has been no activity in the previous tax year.

It’s important to note that the new regulations also apply to shares that were in existence before these changes came into force.

Employers must submit annual return information relating to each scheme, including those with nil returns, to HMRC by 6th July 2015 otherwise the above automatic penalties will apply.

Business must register with HMRC Online Services before they are able to submit online share returns, and they must also register each individual share scheme.

What will happen if employers fail to comply with the new regulations?

Well, as you would expect there will be penalties to pay. What’s more, these penalties are severe: if employers make late returns they could face fines of up to £700 and additional fines of £10 per day if the return remains outstanding for more than nine months. HMRC also has the ability to impose further penalties of up to £5,000 for material inaccuracies in filing returns that are not corrected without delay.

For further clarification about the new rules relating to employee share schemes, contact Steven Glicher accountants on 0161 485 8007 or email

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