UK employers should register for online reporting of share based remuneration

All UK companies, employers and trustees have a legal duty to report to HM Revenue & Customs (HMRC), the UK’s tax authority, when an employee receives share based remuneration, whether or not there is any tax payable.

The share-based remuneration to consider includes:

  • Share options: the granting and exercise of options need to be separately reported
  • Restricted stock units: the award of the stock has to be reported and any vesting separately reported
  • Forfeitable shares: the award has to be reported and when the forfeit period ends
  • Long-term incentive plans, where the incentive is in the form of shares for the employee

Reports must be made annually based on the UK tax year - that is, for each year ending 5 April - and need to be filed with HMRC by the following 6 July. At present, forms are submitted by post, but commencing year ending 5 April 2015, forms will have to be submitted online.

Failure to file forms can lead to penalties and, following the introduction of online reporting, it is anticipated that penalty notices will be issued automatically.

There are separate forms for certain government approved schemes.

Two actions are now required by employers:

  • Report any employee share-based remuneration for the year to 5 April 2014 by completing the relevant form and sending it by post to HMRC before 6 July
  • Consider how the online reporting will be dealt with

Affected employers will need to sign up for this new online service. HMRC assume that whomever handles the company payroll will handle the online share remuneration reporting. However, these can be managed separately, in which case the employer will need to arrange for a separate payroll reference to be set up.

TMF Group can assist employers meeting these compliance burdens.  For further information, please contact Vince or your usual TMF Group contact.

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