Save As You Earn: guidance notes

Question 1

1. Guide to completing Save As You Earn (SAYE) annual return attachment

Accepted Answer

The company secretary or the person acting as the company secretary must complete an online end-of-year return on or before 6 July for each registered and self-certified Schedule 3 SAYE scheme.

The SAYE attachment only needs to be completed and then uploaded if you have information to report.

You will need to complete an online ‘nil’ return if there were no SAYE options granted, exercised, cancelled, lapsed, released (including exchanges) and there have been no alterations, amendments made to the scheme or SAYE options during the tax year.

Complete only the worksheets that are relevant but upload the whole workbook, including any blank sheets. If you change the structure or formatting of your attachment it will be rejected.

If you have created your own comma separated values (CSV) files using the HMRC provided technical note, upload each CSV file that contains data relevant to that scheme type. The comma separated values template you have created must accurately match the exact wording on the HMRC technical notes. You must make sure all punctuation and grammar is matched. If the column does not accurately match the technical specification, it will not be possible to submit the file successfully.

You can use the Employment Related Securities (ERS) checking service to check your attachment. The checking service will tell you if and where there are any formatting errors in your attachment. You can use the checking service as often as you like. Checking your attachments regularly allows you to identify and correct these errors. This makes it easier to submit your return at the end of the year. The checking service is accessed through ‘view my schemes and arrangements’ on the online ERS service.

1.1 General guidance on valuations

All values should be entered in pounds sterling and pence and entered to 4 decimal places. Where necessary, round up figures ending in 5 or more and round down figures ending in 4 or less. You should use any reputable currency convertor to convert to pounds sterling if the value is quoted in another currency.

There is no change in valuation practice with the introduction of the templates. It is not necessary to have formally agreed the valuation of shares and securities with HMRC. However, where shares are not listed on a recognised stock exchange, you may have asked for a valuation from HMRC. If you agreed a valuation with HMRC then provide the reference number on the attachment. If the number is prefixed with ‘Company Reference Number (CRN)’ do not enter those letters. If you did not get a valuation you should continue to retain records of how you reasonably established the valuation.

1.2 Actual Market Value (AMV)

AMV is the value of a share or security after taking into account any restrictions or risk of forfeiture.

1.3 Unrestricted Market Value (UMV)

UMV is the value of a share or security ignoring any restrictions or risk of forfeiture.

1.4 Recognised stock exchange

The Alternative Investment Market (AIM) is not a recognised stock exchange.

For more information about recognising stock exchange read Recognised stock exchanges: definition, legislation and tables.

1.5 General guidance on completing the attachment

Where a question or column requires an entry, use the required formats. Where a question does not apply or is not mandatory, leave the entry blank. Entering ‘N/A’ or ‘not applicable’ will result in your attachment being rejected. You can read the technical note to find out if a field is mandatory, conditional mandatory or optional and explain the formatting required for each question.

Where a question or column requires a ‘yes’ or ‘no’ entry, the following formats are acceptable:

Yes
yes
YES
No
no
NO

Question 2

2. 
SAYE Granted V4 worksheet

Accepted Answer

Use this worksheet to tell HMRC about any options you’ve granted in the tax year.

2.1 Question 1: Date of grant

Enter the date SAYE options were granted to the employees. The date will be on the option certificate and it must be within the tax year covered by this return.

2.2 Question 2: Number of individuals granted options

Enter the total number of employees granted SAYE options on the date of grant.

2.3 Question 3: Over how many shares in total were options granted

Enter to 2 decimal places the total number of shares granted to employees under SAYE options on the date of grant.

Enter the UMV of a share or security ignoring any restrictions or risk of forfeiture. How the option price is to be determined will be explained in the company’s scheme rules. The value should be entered to 4 decimal places.

Enter the price at which the employee was granted the option. This will be the price the employee will pay for each share on the exercise of the share option. The value should be entered to 4 decimal places.

2.6 Question 6: Are the shares listed on a recognised stock exchange (yes or no)

For more information about recognising stock exchange read Recognised stock exchanges: definition, legislation and tables.

If you enter ‘no’, read question 7.

2.7 Question 7: If no, was the market value agreed with HMRC (yes or no)

The market value of shares under SAYE options can be agreed with HMRC in advance of the date of grant of options.

Enter ‘yes’ if the market value was agreed advance and read question 8.

2.8 Question 8: If yes, enter the HMRC valuation reference given

The HMRC valuation reference will be on the valuation letter sent to you from the Shares and Assets Valuation office. The reference given will normally be your Company Reference Number (CRN). Enter the full reference including the letters and numbers. If the beginning of your reference has three letters, only include the numbers.

Question 3

3. 
SAYE RCL V4 worksheet

Accepted Answer

Use this worksheet to tell HMRC about options released (including exchanges), cancelled or lapsed in the tax year. Where an option is released, exchanged, cancelled or lapsed and no consideration was received, do not complete this worksheet.

3.1 Question 1: Date of event (yyyy-mm-dd)

Enter the date option was released (including exchanges), cancelled or lapsed for a consideration. Enter in the format as shown in the template.

3.2 Question 2: Was money or value received by the option holder or anyone else when the option was released, exchanged, cancelled or lapsed (yes or no)

You should only complete this worksheet if the individual employee or anyone else received money or money’s worth when the SAYE options were released (including exchanges), cancelled or lapsed.

‘Money’s worth’ means something that is:

of direct monetary value to the individual employee or someone else
capable of being converted into money or something of direct monetary value to the individual employee or someone else

You must not include the repayment of savings.

3.3 Question 3: If yes, amount or value

Enter the amount of money or money’s worth received if you answered yes in question 2. The value should be entered to 4 decimal places.

3.4 Question 4: Employee first name

This is the employee’s first name.

3.5 Question 5: Employee second name

Enter employee’s second name if known or leave blank if not known.

3.6 Question 6: Employee last name

This is the employee’s last name.

3.7 Question 7: National Insurance number

In most cases, individuals included on an ERS end of year return should have a National Insurance number. However, there may be some exceptional circumstances where an individual needs to be included on a return but does not have a National Insurance number. In these circumstances, an alternative reference should only be used on the ERS end of year return; it should not be used in any other correspondence.

This reference is not a National Insurance number and should not be given to the individual or used in any other correspondence with HMRC.

Where there are exceptional circumstances, the required format for the alternative ERS reference will be a total of 9 characters. This will be 2 letters, 6 numbers and 1 letter consisting of:

TN ― to indicate an ERS reference
Employee Date of Birth in format DDMMYY (for example, 080403) ― this data will enable HMRC to trace the individual
No National Insurance number Reason Identifier (X, Y or Z) ― this is to identify the reason why an individual does not have a National Insurance number:
X ― Under 16 years old
Y ― Applied for a National Insurance number and is waiting to receive it
Z ― Never paid National Insurance contributions as they have not been liable to UK National Insurance contributions, for example they’re not resident in the UK or are an ‘intra-company worker’ on transfer to work in the UK

3.8 Question 8: PAYE reference

Enter the PAYE reference number of the company that employs the employee with SAYE options.

3.9 Question 9: Was PAYE operated (yes or no)

Income Tax and National Insurance contributions will be payable on the amount of money or money’s worth received. The Income Tax and National Insurance contributions are payable through PAYE. Enter ‘yes’ or ‘no’ in this field.

Question 4

4. 
SAYE Exercised V4 worksheet

Accepted Answer

Use this worksheet to tell HMRC about SAYE options exercised in the tax year.

4.1 Question 1: Date of event (yyyy-mm-dd)

Enter the date option was exercised by the employee.

4.2 Question 2: Employee first name

This is the employee’s first name.

4.3 Question 3: Employee second name

Enter employee’s second name if known or leave blank if not known.

4.4 Question 4: Employee last name

This is the employee’s last name.

4.5 Question 5: National Insurance number

In most cases, individuals included on an ERS end of year return should have a National Insurance number. However, there may be some exceptional circumstances where an individual needs to be included on a return but does not have a National Insurance number. In these circumstances, an alternative reference should only be used on the ERS end of year return; it should not be used in any other correspondence.

This reference is not a National Insurance number and should not be given to the individual or used in any other correspondence with HMRC.

Where there are exceptional circumstances, the required format for the alternative ERS reference will be a total of 9 characters. This will be 2 letters, 6 numbers and 1 letter consisting of:

TN ― to indicate an ERS reference.
Employee Date of Birth in format DDMMYY (for example, 080403) ― this data will enable HMRC to trace the individual.
No National Insurance number Reason Identifier (X, Y or Z) ― this is to identify the reason why an individual does not have a National Insurance number.
X ― Under 16 years old.
Y ― Applied for a National Insurance number and is waiting to receive it.
Z ― Never paid National Insurance contributions as they have not been liable to UK National Insurance contributions — for example they’re not resident in the UK or are an ‘intra-company worker’ on transfer to work in the UK.

4.6 Question 6: PAYE reference of employing company

Enter the PAYE reference number of the company that employs the employee with SAYE options.

4.7 Question 7: Date of grant

Enter the date SAYE options were granted to the employees. The date will be on the option certificate.

4.8 Question 8: Total number of shares employee entitled to on exercise of the option

Enter the number of shares to 2 decimal places the employee is entitled to acquire on exercise of the option.

4.9 Question 9: Were the shares subject to the option listed on a recognised stock exchange (yes or no)

For more information, go to what is a recognised stock exchange and a table of recognised stock exchanges.

If you enter ‘no’, read question 10.

If you enter ‘yes’, read question 12.

4.10 Question 10: Was the market value agreed with HMRC (yes or no)

The market value of shares under SAYE options can be agreed with HMRC in advance of the date of grant of options.

If you enter ‘yes’, read question 11.

If you enter ‘no’, answer no and read question 12.

4.11 Question 11: If yes, enter the HMRC valuation reference given

The HMRC valuation reference will be on the valuation letter sent to you from the Shares and Assets Valuation office. The reference given will normally be your Company Reference Number (CRN). Enter the full reference including the letters and numbers. If the beginning of your reference has three letters, only include the numbers.

Enter the AMV of a share or security after taking into account any restrictions or risk of forfeiture. The value should be entered to 4 decimal places.

The exercise price per share is the price the employee was granted the share option and it is the price the employee will pay for each share on the exercise of the share option. The value should be entered to 4 decimal places.

Enter the UMV of a share ignoring any restrictions or the risk of forfeiture. The value should be entered to 4 decimal places.

4.15 Question 15: Does the exercise qualify for tax relief (yes or no)

The answer will be ‘yes’ if the option is exercised:

on or after the third anniversary of the date of grant
by a good leaver, according to the scheme rules, before the third anniversary of the date of grant

4.16 Question 16: Were all shares resulting from the exercise sold (yes or no)

Enter ‘yes’ if shares were immediately sold on exercise or instructions were given to sell on exercise. The application of a price limit should be disregarded.

Enter ‘no’ if any shares were retained or at a later point the employee decides they now want to sell.

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