Annual Employment Related Securities (ERS) Return Due July 6th
An Employment Related Securities scheme lets you share your company's success with employees by giving them ownership (shares). This can boost morale, encourage them to stay, and give them a reason to go the extra mile.
ERS schemes and filing returns can be tricky to navigate. If you're a Dragon Argent client, our client managers can answer your questions about our ERS service. For everyone else, here's a basic explanation to get you started.
What is an ERS return?
If your company has operated any share-based schemes in any tax year, you are required to file and submit an annual ERS return with HMRC by 6 July of the following tax year. The following ERS schemes are classed as tax-advantaged:
Enterprise Management Incentives (EMIs) schemes
Share Incentive Plans (SIP)
Save as You Earn (SAYE)
Company Share Option Plans (CSOP)
and the issue of shares in the company (including growth shares).
Accordingly, if you have operated or set up a share-based scheme during the period of 6 April 2023 to 5 April 2024 (inclusive), you are required to file and submit an ERS return by no later than 6 July 2024.
The ERS return is in addition to the (old) requirement of registering any grants of EMI options within 92 days (this latter period has now been extended).
HMRC does not send reminders about this so the onus is to on you to remember to file and submit the annual ERS return on time.
How to make an ERS return?
Firstly, log-in to your HMRC government gateway and have a look at the schemes registered within the ERS section. Where there have been no changes (no options have been exercises, lapses and/or the company has issued any shares to any employees), you can file a nil return.
If changes have occurred, download the relevant template from HMRC – link here. The template spreadsheet will need to be diligently completed and filed with HMRC within the relevant option scheme. You must submit an annual return or nil return for all schemes that you have registered on the ERS online service with HMRC.
What happens if returns are not made on time?
HMRC will apply a £100 penalty if an ERS return or nil return is not submitted by 6 July. Further penalties will be automatically applied if these have still not been completed in 3 months, 6 months and daily from 9 months.
If you're unsure what level of support you need, our experts are here to help you.
Speak to one of our Corporate Law Solicitor today ↓
Written by:
Join our network of entrepreneurs and benefit from a range of support including an ecosystem of trusted partners, our weekly blog, plus webinars and whitepapers on the leading challenges founders face when scaling businesses.
