Employment Related Securities

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Online Filing Requirement for employment related securities

Companies frequently offer rights to acquire shares or other securities to their key employees and officers . This comes with new reporting obligations, new dates and new requirements with HMRC.

First, any employee share scheme must be registered online ahead of the filing deadline to ensure that the filing can actually be done – this affects the annual return and specific reporting on employee share transaction during the year.

The key deadline for filing with HMRC is no later than 6th July in the year following any such transactions.

As always, there are penalties if you fail to meet these obligations.  Failure to file the required returns by the deadline of 6th July will attract automatic late filing penalties of £700 and a further penalty of £10 per day if the returns are in excess of 9 months late.

Definition of “Employment Related Securities “

It is important to understand the definition of an employment related security and the nature of transactions that fall within the scope of legislation relevant to employment related securities.

An employment-related security includes shares, debt or other investment instruments, share options where the right or opportunity to acquire the securities interest or option is made available by reason of their employment.

Share Scheme Registration

The registration of the share scheme may be done via the online PAYE service.

The company is obliged to register the scheme . It cannot appoint a third party to register the scheme on its behalf.

Annual reporting

The online return replaces the traditional hard copy “Form 42”. The detail required includes a requirement to report the true market value of the shares acquired and details of share valuations.


The detailed registration and reporting requirements may appear complex and confusing but we can offer guidance on and assistance with the online registration of an employee share scheme. We can also submit the annual share scheme returns on your behalf in accordance with legislation and filing deadlines and advise on the management of potential tax charges where appropriate.