However, at a recent presentation about this topic, HMRC informed us that a number of companies have incorrectly registered their share plans. Examples included:
- Registering the plan under the wrong ‘Scheme type’ e.g. registering a SIP with a scheme type of ‘SAYE’ or ‘OTHER’/registering SAYE with a scheme type of ‘SIP’ or ‘OTHER’. The error can be identified if there is a mismatch between the ‘Scheme name’ and the ‘Scheme type’.
- Selecting the wrong ‘tax year of first event’ from the drop down menu. This is a more recent issue that has emerged since ‘2015/16’ has been added as a selection choice.
Failure to register properly could mean the loss of the tax advantaged status of the plan. Phil Ainsley, Managing Director, Employees Services comments: "As this is so important, we would ask anyone who has already registered their share plans to go back and check that the details are recorded correctly."
The ‘Scheme name’, ‘Scheme type’ and ‘Tax year of first event’ are all shown on the Employment Related Securities page viewed through HMRC’s Online Services. Phil says: "If a mistake has been made there is no simple way to rectify it and there is very little time left. Registration can take a couple of weeks so needs to be completed and then checked as soon as possible and well in advance of the July deadline."
Online filing and internationally mobile employees
Jumping ahead to next year’s annual returns, changes to the tax treatment for international mobile employees took effect from 6 April 2015 and has an impact on discretionary share plan releases and option exercises taking place on or after 6 April 2015. Where there are ‘chargeable events’ (exercise of share options/release of shares) for internationally mobile employees, the UK tax treatment will generally be apportioned based on work duties performed in/outside the UK over the grant to vest period.
There are plans underway to hold an Equiniti Discussion Forum on this topic to cover the changes and their impact on administration. Further details will be available soon.
E-Zine issue: May 2015