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Employee Services Update - July 2015

27 July 2015

Your round-up of the legislation, events and updates that matter in the Employee Services world

Equiniti Employee Services forum

This unique industry event will take place in the beautiful location of Ashdown Park in the heart of Sussex on Wednesday, 9th September, 2015. An unbeatable line-up of speakers discussing a wide range of current topics will allow you to learn, network, exchange views and gain real insight our industry.

Sessions include the hiring and firing of executives, how to tailor share plans to ‘mid-level’ executives and where we’re heading with malus, clawback and holding periods. Global topics include an international share plan update and how to improve services for your overseas employees. 

Looking to the future, we’ll cover how the evolution of Employee Benefits and advancing technology will help our 21st Century workforce and how we will communicate with employees through multiple channels. There will also be a Company Secretary’s guide to managing share schemes and a look at the benefits of management information. A final session on compliance hot topics will test whether you’re on top of the changes impacting employee share plans.

In addition to our own Equiniti experts, confirmed speakers include Gillian Chapman and Graham Rowlands-Hempel (Linklaters), Chris Stamp (Prism Cosec), Robert Head (Exec Remuneration), Francis O’Mahony (BT), Matthew Findlay (Pinsent Masons), Mark Ife (Herbert Smith Freehills), Jeremy Edwards (Baker & McKenzie), Neil Sharpe (Aon Hewitt) and Bob Grayson (Tapestry). More industry experts will take part in discussion panels to share their thoughts too.

This event is for Equiniti clients and invited guests with all conference sessions, materials, refreshments, lunch and dinner free of charge. To ensure you don’t miss out please email marketing@equiniti.com for a booking form.

Registration, self-certification and online filing 6th July 2015 deadline

The 6th July, 2015 deadline for registering and self-certifying existing share plans has now passed, with the fantastic news that our clients have successfully completed this process.

Phil Ainsley, Managing Director, Employees Services said: "We have been tracking the progress of this project for 16 months and it is fantastic to see all of our clients complete this process in time, ensuring share plan tax advantages were not lost. So, a big thank you to everyone for their involvement."

Many companies filed their 2014/2015 employee share plan annual returns online in advance of the deadline. However, on 3rd July, HMRC encountered technical issues with the ERS Online service, which meant that some companies were unable to file their annual return by 6th July. HMRC’s update on 20th July states that they have extended the deadline for filing annual returns. 

If a company files its returns on or before Tuesday 4th August they will not be charged a penalty. In April the method for calculating the value of listed shares for income tax purposes changed so that the closing mid-price can be used instead of the quarter-up price. At the same time there were also changes to the tax treatment for international mobile employees. As these changes will impact the completion of next year’s annual returns, we will provide some further information in due course.

Changes affecting Sharesave schemes in the Financial Services Compensation Scheme (‘FSCS’)

The Prudential Regulatory Authority (PRA) has issued changes that impact any deposits protected under the FSCS arrangements and this includes Sharesave savings. This has an impact on the way applications are made as well as changes to Sharesave documentation. If you would like detailed information about the changes, please contact your relationship manager.

The PRA has also announced changes to depositor and policyholder protection provided by the FSCS. For the majority of depositors currently covered by the FSCS, the existing level of deposit protection (£85,000) will be changing to £75,000 after 31st December, 2015. The PRA is required by the European Deposit Guarantee Schemes Directive to recalculate the FSCS deposit protection limit every five years and set it at a sterling amount equivalent to EUR 100,000. 

This means that there will be some further changes to documentation over the coming months. There is also a requirement to send information to all Sharesave participants about this change and an additional communication is planned.

Budget update

Dividend tax reform In the July budget it was announced that the government will reform and simplify the system of dividend taxation. The proposal is that from April 2016, the Dividend Tax Credit will be removed and replaced with a new tax-free Dividend Allowance of £5,000. 

Above this, there will dividend tax rates at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. This will have an impact on share plans, in particular with participant communications about the impact on SIP Dividend Shares.

ifsProShare annual survey results released

ifs ProShare has published its Annual 2015 Share Incentive Plan and Sharesave employee share plan survey results. The survey provides comprehensive industry figures for the whole of 2014 using data from the plan administrators. It was released at an ifs ProShare event on 16th July where the key findings were presented and discussed by a group of industry experts including Gabbi Stopp (ifs ProShare), Phil Ainsley and Jennifer Rudman (Equiniti), Lynette Jacobs and Suzanne Crookes (Pinsent Masons) and Robert Head (Pearson).

The figures show positive trends for both Sharesave and SIP. Gabbi Stopp, Head of Employee Share Ownership at ifs ProShare said: "These findings once again demonstrate the inherent value of employee share ownership to the economy, to productivity and to levels of savings throughout the UK. It is encouraging to see that recent changes introduced by HMRC and campaigned for by ifs ProShare have led to a greater uptake from employees deciding to participate in their companies’ share schemes."

Copies of the 2014 ifs ProShare Annual SIP & SAYE Survey are available to purchase for just £249 + VAT by calling ifs ProShare on 0207 444 7141 or e-mailing: ifsproshare@ifslearning.ac.uk