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Have you reported your ‘employment related shares’ transactions?

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Most shares or options acquired by employees or directors in a company that is, or is connected to, their employer are ‘employment related securities’ (ERS).

However, the reporting requirements of employment related securities are often missed. This is likely because the reporting requirements for non-tax advantaged share transactions are not well publicised.

What needs to be reported?

The types of reportable events include (but are not limited to):

  • Acquisition of shares, or interests in shares, by an employee.  Note: this acquisition could include an issue of new shares or a transfer of existing shares
  • Grant of options to an employee
  • Exercise of share options by an employee
  • Receipt of a benefit in money or money’s worth in relation to an employee share option
  • Assignment or release for consideration of an employee share option
  • The falling away of restrictions attaching to shares held by an employee
  • The disposal for consideration of restricted securities by an employee
  • Other events which give rise to a tax charge in relation to employment-related securities

What do I need to do?

Once you’ve ascertained you have something to report to HMRC, you need to register a ‘share scheme’ before completing an ERS return. This electronic return is then filed online through your HMRC PAYE account using a predefined table.

Act now

The filing deadline for the ERS return is the 6 July following the end of the tax year in which the share transaction has taken place. If you haven’t registered a scheme and you need to do so, act now as this process can take some time and the return cannot be filed until this has been done.

It’s also important to remember that once a scheme has been registered with HMRC, an ERS return will need to be filed annually thereafter, even if no share transactions have taken place, until you choose to close the scheme.

Need help?

There are penalties for late filing, or completely missing, the ERS returns. If you have any queries please get in touch with your usual Larking Gowen contact or Tessa Brown in our Tax Advisory Group.

Call 0330 024 0888 or email

Tessa Brown


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Larking Gowen

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