Owner-Managed Businesses

Annual return for Employment-Related Securities (ERS) – 6 July 2024

7th June 2024


Any award of shares or other securities (including loan stock and debentures) made to an employee or officer of a company by reason of their employment are known as ‘Employment Related Securities’ or ERS.

Companies are required to report ERS transactions and schemes annually to HMRC, regardless of whether a tax charge arises or not. The deadline for registering schemes and submitting the ERS return, for events occurring in the 23/24 tax year, is 6th July 2024 and penalties are issued for any returns not filed by the deadline. 

The ERS legislation brings most shareholder-director shares (as well as employee shares) under the ERS umbrella. It is also the mechanism for reporting annual movements relating to any Enterprise Management Incentive (EMI) Scheme, other HMRC-approved Share Option Schemes, or an Unapproved Share Option Scheme. Therefore, ERS must be considered whenever any share transaction, or share option event, has been undertaken.

 

Have there been any share transactions in the 2023/24 tax year (i.e. year to 5/4/2024)?

Further questions to help identify such transactions are:

  1. Has the company issued any shares in the year?
  2. Have you transferred any shares to another person or entity?
  3. Have you sold any shares in the year to another person or entity?
  4. Have you converted your Director’s Loan Account (DLA) to preference shares in the year?
  5. Have you incorporated your business in the year?
  6. Were any changes noted in the company’s most recent confirmation statement?
  7. Has a share-for-share exchange taken place?
  8. Has any employee been granted an option over shares?
  9. Has any employee exercised an option over shares?
  10. Was any employee granted an option over shares but has left the business without exercising that option?
  11. Has a share-for-share exchange taken place?

If the answer to any of the above is “yes” and you would like to discuss whether the transaction is reportable on the ERS annual return, please contact Stephen Martin directly by clicking here.

We recommend starting the process as soon as possible as it can take some weeks for any schemes to be registered with HMRC.