Employment related securities annual reporting for the tax year 2023/24

Each tax year there is a requirement for companies to submit an electronic annual return to HM Revenue and Customs (HMRC) by 6 July for the previous tax year in relation to approved share schemes (EMI, CSOP, SAYE and SIP) and also for any ‘reportable events’ that involve employment - related securities that are not under one of the approved share shares, for example, shares and securities that have been acquired by reason of an individual’s employment.

Therefore, the deadline for tax year 2023/2024 is 6 July 2024 otherwise penalties will arise for non-submission.

Any company who has submitted annual returns in the past and still have an active scheme open will have this set up under their PAYE HMRC company login and will be able to see that HMRC have now made available the 2023/24 annual return for submission.

Any company who has made any ‘reportable events’ in the tax year and do not have an active scheme open will then be required to set up an active scheme and complete the annual return by the required deadline. Please be aware that the setup of the scheme is not instant as you will have to wait for HMRC to authorise and make available the annual return before this can be completed and submitted. Therefore, it is recommended that the scheme is set up in advance of the deadline to give HMRC time to authorise and open the annual return.

EMI annual return (formerly known as an EMI40 return)

For the EMI annual return, it is necessary to include all or any of the following events in respect of the options:

  • exercise (whether taxable or non-taxable)
  • lapse, release or cancellation of options
  • variations in share capital lending to an adjustment of option price or description of option shares
  • replacement of options due to a reorganisation.

If any of the above has happened in the tax year then the annual return submission will also require the relevant EMI template to be attached, which can be found on HMRC’s website, which details the event being reported.

If no reportable events have happened in the tax year, then it will be a nil annual return submission to be made.

Other employment related securities annual return (formerly known as a Form 42 return)

Any ‘reportable events’ that involve employment-related securities, for example, shares and securities that have been acquired by reason of an individual’s employment, it is necessary to submit an annual return in relation to these events.

Reportable events include, but are not limited to:

  • grant of unapproved options
  • acquisition of shares or other securities by officers of the company and employees by reason of their employment
  • lapse of options for consideration
  • disposal of securities for more than market value
  • any other post-acquisition benefit, enhancement, etc.

If you are uncertain whether a reportable event has taken place, further guidance can be found at this page on the GOV.UK website which gives more detail as to the kinds of events that need to be reported.

If any of the above has happened in the tax year, then an annual return will be required.

If you have an active scheme already set up for an “other” annual return and no reportable events have been made in the tax year, then a nil return can be submitted by the deadline.

Also, if you consider the active scheme is no longer required because you will not be undertaking a “reportable event” again then you can close the scheme down by entering a closing date on the online HMRC portal. This can only be done through the company’s PAYE login and it will save having to submit nil annual returns in the future.

The next step

If you consider that you have made “reportable events” during the 2023/24 tax year and that an annual return is required, then please contact Rebecca Martin on, or your usual UHY adviser.

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