Registration of 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:

  • Registration of non tax-advantaged share schemes
  • Background
  • First things first ― registering for HMRC’s online services
  • How to register a non tax-advantaged share scheme or arrangement

This guidance note provides practical information about the registration and annual reporting requirements for companies operating non tax-advantaged share plans or arrangements (including companies who make a taxable award of shares or securities to employees, directors and / or other office holders) where tax liabilities arise in the UK.

Background

Any company operating a non tax-advantaged share scheme or arrangement, or making awards of shares or other securities to employees, directors or other office holders, is required to give notification of the arrangements to HMRC online using its employment related securities (ERS) service. Although no notification needs to be made when the scheme or arrangement is established, only at such time as there is a ‘reportable event’, many companies choose to register the scheme or arrangement at the time of implementation.

Companies are required to make an annual return in respect of such schemes or arrangements by 6 July following the end of each tax year in which there is a ‘reportable event’ (see the Annual reporting for tax-advantaged share schemes guidance note). These include arrangements such as grants of non tax-advantaged share options and any acquisition of shares by employees, directors and other office holders. HMRC has provided guidance on what should and should not be reported, and this can be found starting at ERSM140000. Whilst there is no statutory requirement to notify or register the existence of a non tax-advantaged scheme or arrangement with HMRC prior to a reportable event, the company has to do so before it can submit its annual return online.

First things first ― registering for HMRC’s online services

Before a company can register its non tax-advantaged share scheme(s) or arrangement(s), it must be registered to use HMRC’s online services. HMRC advises that it can take up to seven days for a company’s login details to be generated, so if the

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