Reward and employee share update


Annual share scheme returns for the year ended 5 April 2017 must be filed online by 6 July 2017.

Any returns not filed yet in respect of the year ended 5 April 2016 must be filed as soon as possible as automatic late filing penalties are now charged and will be accruing. This is a significant departure from HMRC’s previous position where penalties, or the threat of penalties, was seen by HMRC as a last resort."

HMRC no longer issue prior approvals for Company Share Option Plans ("CSOP"), Save As You Earn ("SAYE") and Share Incentive Plan ("SIP") schemes. This has been replaced by the online registration of such schemes. The deadline for such registration is 6 July following the year to 5 April in which the scheme was first implemented. If the scheme is not registered online by this deadline, all or some of its tax advantages will be lost. As part of the online registration of such schemes, there is a requirement to self-certify that tax advantaged schemes meet the requirements of the appropriate legislation.

It is necessary for the reporting of share scheme transactions to be made to HMRC using their Employment Related Securities ("ERS") service. In order to use the ERS online service, employers need to be registered with the Pay As You Earn ("PAYE") online service in their own name, ie not via a payroll agent. It should be noted that registration for the online service, whilst an administrative process, can take several weeks as the process is not as straightforward as it could be.

Consequently, the notification of grants of Enterprise Management Incentives ("EMI") options must be made online within 92 days of grant in order for the options to fall within the EMI scheme. It is no longer possible to file written notifications of grant with HMRC. Before registering the grant of options online, it will, however, be necessary for the EMI scheme to have also been registered with HMRC via the ERS service.

Gender pay gap reporting

From April 2018 employers will be compelled to publish data highlighting the gender pay gap within their organisation. This first report will cover the period to April 2017, and so data collection processes should be put in place now if they don’t already exist.

The gender pay gap is the difference between men and women’s aggregate hourly pay and makes no allowance for the nature of the roles undertaken. Therefore, it is likely that an organisation with junior roles predominantly staffed by one gender and/or senior roles by the other gender will show a significant gender pay gap.

The following changes will be introduced:

  • The regulations will apply to employers who employ 250 or more employees.
  • Employers are required to publish the figures on the organisation’s website and submit evidence of compliance annually to the government. The published figures must show both the mean and median gender pay gap.
  • Employers will also need to calculate and publish three other figures alongside the gender pay gap. These are:
  • The gender bonus gap.
  • The proportion of men and women receiving a bonus; and
  • The proportion of men and women working at each quartile of the organisation’s pay distribution.

For more information please contact Mark Abbs.