RSM reminds businesses to submit Employee Share (ERS) returns now to avoid penalties
Data obtained from HMRC under a Freedom of Information request has highlighted a 15% increase in the number of penalties issued for late submission of an ERS (Employment Related Securities) return since 2018.
Leading audit, tax and consulting firm RSM is reminding businesses to make sure they submit a return by the 6 July deadline to avoid a fine. Companies should also note that to submit an ERS return they must first register with HMRC’s Employment Related Securities Service, which can take up to ten days.
Fiona Bell, employer solutions partner, RSM said: ‘directors or employees receiving shares, options, restricted stock units or LTIP share awards have ‘employment related securities’ (ERS) and their employer is obliged to submit an annual ERS return before July 6. After that, penalties are automatic.
‘Many companies do not realise that even one-off share acquisitions by directors and employees are within the scope of a return. Also, once registered with HMRC, you still need to submit a nil return to ensure you don’t get penalised.’
The penalty for late submission is £100, with further penalties if no submission is made within three months of the deadline. Penalties can also be incurred for any errors in submissions.
Despite the increase in the number of fines issued, the total amount collected by HMRC in late payment fees for has reduced by 22% since 2018, from £3,186,881.88 to £2,491,340.03.
More details on how to submit an ERS return can be found on the government’s website.
