Employment related securities annual returns – Deadline reminder

All employment related securities (ERS) annual returns for the 2024/25 tax year must be filed by 6 July 2025. The returns are filed via HMRC’s online service (via the PAYE for Employers – Employment Related Securities section).

There are separate returns for the tax-advantaged employee share schemes (i.e. EMI, CSOP, SAYE and SIP) and one for all other arrangements (e.g. non-tax advantaged options, or the direct issue of shares to employees or directors).

A couple of points you should note in particular:

• even if there have been no reportable events, a filing must still be made to HMRC (known as a ‘nil return’)
• one-off share acquisitions by employees or directors must still be reported as part of an “other” arrangement; the returns are not limited to formal ‘schemes’

Failure to file accurate returns by 6 July may result in HMRC imposing penalties. There is an automatic penalty of £100 for a late return, with additional increasing penalties if the return remains outstanding for more than 3 months. In addition, if the return contains inaccuracies HMRC can impose penalties of up to £5,000 per return. If you have not already registered your ERS scheme, you should do so immediately as it can take up to 2 weeks for the schemes to become “active” on HMRC’s portal. HMRC do not send any reminders or notices to file in respect of these ERS annual returns.

You can register for HMRC’s online service by navigating to: HMRC services: sign in or register: Register for HMRC online services - GOV.UK (www.gov.uk). The returns can be found at the following link, including HMRC guidance on what needs to be reported Tell HMRC about your employment related securities (ERS) schemes - GOV.UK (www.gov.uk).

We recommend you take screenshots or print all the details that you are submitting to HMRC so you have an internal record (in addition to screenshotting or making a note of the acknowledgement number received once the return is filed).

Please also note that if you operate an EMI option scheme and have granted EMI options on or after 6 April 2024 and within the last tax year 6 April 2024 – 5 April 2025, the deadline to notify the grant of these EMI options is now 6 July following the end of the tax year in which the EMI options are granted (i.e. 6 July 2025), to coincide with these ERS annual return deadlines. For clarity, any EMI options granted within the current tax year of 25/26 will need to be notified by 6 July 2026. It is important that any EMI notifications are made by the deadline to ensure that the EMI options remain EMI qualifying.

Please consider whether your company has UK employees or directors who have been issued shares or granted options and if so, whether any action needs to be taken in respect of this upcoming HMRC filing deadline. Shoosmiths cannot file these returns for you, but our Tax & Incentives team can assist you if you encounter any difficulties or need any support. For more information, please contact Dan Sharman, Marie Mann or Sunny Mangatt.