HM Revenue & Customs Share Scheme Returns

There are some important deadlines looming for companies which operate share schemes. In brief:

by 6 July 2007, all companies are required to submit to HM Revenue & Customs ("HMRC"), annual returns in respect of HMRC approved schemes operated during the tax year 2006/2007; and by 6 July 2007, all companies are required to submit to HMRC a Form 42 if "reportable events" have arisen during the tax year 2006/2007.

Online filing

From 6 April 2007, companies will have the opportunity to file certain share scheme returns online. To use this facility, companies must be registered for the PAYE Online - Internet Service.

The important point to note is that HMRC will no longer issue paper returns to companies. Instead, it will issue notices to file share scheme returns to those companies which are known to it. Unapproved arrangements will still have to be reported without any prompting from HMRC.

Companies are encouraged to file returns online but may continue to file paper returns if they wish to do so. The deadline for submitting returns is the same whether the return is filed online or by paper. Companies can obtain paper copies of the annual returns by printing a copy from HM Revenue & Customs' website.

Approved schemes

Each type of approved scheme has its own bespoke return: Form 34 (ShareSave or SAYE), Form 35 (company share option scheme or CSOP), Form 39 (Share Incentive Plan or SIP) and Form 40 (Enterprise Management Incentives or EMI).

Each return can be accessed online from HMRC's website at http://www.hmrc.gov.uk/shareschemes/ann-app-schemes.htm

Forms 34, 35 and/or 39 may be submitted online. You need to ensure that Forms 34, 35 and/or 39 are submitted to HMRC online or at the following address by 6 July 2007:

Employee Shares and Securities Unit

Room G52

100 Parliament Street

London

SW1A 2BQ

Form EMI 40 for reporting EMI options will continue to be issued by (and should be returned to) the Small Company Enterprise Centre. Online filing is not available for Form 40.

Reportable events and unapproved schemes

In relation to unapproved arrangements including share option schemes and share acquisitions by employees and directors (including non-executives), an employer is required to provide HMRC with written details of any "reportable events" which occurred during the tax year ending 5 April 2007. The appropriate form to use is Form 42 available online form HMRC's website...