Annual reporting for non-tax advantaged share schemes

By Tolley in association with Karen Cooper and Jeremy Cavendish, Cooper Cavendish LLP
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The following Employment Tax guidance note by Tolley in association with Karen Cooper and Jeremy Cavendish, Cooper Cavendish LLP provides comprehensive and up to date tax information covering:

  • Annual reporting for non-tax advantaged share schemes
  • Annual returns
  • How to file an online annual return
  • Nil returns
  • Checking annual returns
  • Who can make the declaration that the annual return is correct and complete?
  • Late filing penalties

Annual returns

Companies operating a non tax-advantaged share scheme or arrangement which has been registered are required to make an online annual return by 6 July after the end of the tax year in which the scheme or arrangement was registered and each tax year during the life of the scheme or arrangement. This includes where the company is making a nil return (see below).

HMRC’s 6 July deadline is a strict one and failure by a company to make the relevant annual return will have serious consequences, including penalties.

It is therefore essential that companies operating non tax-advantaged share schemes or arrangements or making awards of shares or other securities to employees, directors or other office holders are familiar with and fulfil their compliance obligations with regard to notification and annual reporting. For more information on the requirement to register non tax-advantaged schemes and arrangements, please see the Registration of non tax-advantaged share schemes guidance note.

HMRC has no obligation to remind a company to make its annual return(s). It is therefore important that the company is prepared to make the annual return(s) on time. The person responsible for making an annual return submission may find it helpful to set electronic calendar reminders in the period leading up to the deadline.

How to file an online annual return

The company needs to use HMRC’s ERS online service to file its annual return(s). The company will not be able to file an online annual return until the relevant scheme or arrangement has been registered with HMRC and the scheme or arrangement has been issued with a unique scheme reference number (see the Registration of non tax-advantaged share schemes guidance note).

HMRC strongly recommends that a company uses its template as this will limit the margin for error and rejected filings as a result, but it

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