Business Finance: Peter Harrup highlights a key deadline for share scheme returns
- Credit: Archant
All employers that reward employees using share schemes must file annual returns and, for 2014-15 onwards, they must be filed online.
Before online returns can be filed, however, each share scheme must be registered online. Both exercises must be carried out by July 6 this year; failure to do so will result in penalties and the potential loss of tax benefits for tax advantaged share plans.
The online registration and filing requirements cover all share schemes and awards. So as well as dealing with CSOP, SAYE and SIP schemes, employers must also register and file for EMI option grants and unexercised options as well as all types of non-tax advantaged share arrangements potentially including gifts, changes in share rights, and even share for share exchanges, previously returned on Form 42. Where tax-advantaged schemes are not registered online in time, the tax advantages will be withdrawn (meaning the schemes will effectively become “unapproved”).
In addition to registering the share schemes, for tax advantaged schemes, employers are required to self-certify that each scheme meets the qualifying criteria as HMRC will no longer issue a formal approval notice.
Despite the July 6 deadline, many employers have yet to get to grips with online registration filing and experience suggests that those that have tried to use the online system are already having problems. During May, HMRC began sending out standard letters to point out common errors and how to resolve them. However, it is not helpful that HMRC’s letter incorrectly states that penalties will be charged where returns are filed after April 6, 2015 – the filing deadline remains July 6, 2015.
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According to HMRC, one of the most common problems is incorrect registration of a scheme, such as registering a SIP as a CSOP or vice versa. The only way to put this right is to complete a nil return for the incorrectly registered scheme for 2014-15 and show it as ceased. Then the scheme needs to be registered again correctly and the return subsequently submitted.
If you need professional help with online share filing, you must act fast: the postal agent authorisation process means it can take seven days to give your agent access to the online system. BDO can assist you with the online registration and filing process or supply a step-by step guide on how to get it right first time – but you need to act now.
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: : Peter Harrup is tax partner at BDO LLP in Ipswich.