Employment Related Securities Bulletin 57 (October 2024)
Find out about updates to the Employee Tax Advantages Share Scheme User Manual and process guidance.
Arrangements guidance
Updated guidance has been added to the Employee Tax Advantaged Share Schemes User Manual, Enterprise Management Incentives (EMI) — qualifying companies — independence requirement (ETASSUM52030), and a further page has been added into Enterprise Management Incentives (EMI) — qualifying companies — arrangements leading to loss of independence (ETASSUM52031).
The guidance explains HMRC’s position regarding ‘arrangements’ in relation to Enterprise Management Incentive (EMI) schemes. It also:
- explains the differences in the types of arrangements
- indicates at what point arrangements come into existence that could affect EMI schemes
Vermilion guidance
Guidance has been updated as a result of the supreme court judgement about Vermilion Holdings Ltd.
HMRC has published updated guidance in the Employment Related Securities Manual,Employment Related Securities and options ‘by reason of employment’ (ERSM20210), and added a further page into Employment Related Securities and options ‘by reason of employment’ — The deeming provision — HMRC v Vermilion Holdings Ltd (ERSM20215).
The guidance explains the application of ‘the deeming provision’ in sections 421B(3) and 471(3) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 03) following the Supreme Court judgment in Vermilion, in relation to:
- Employment Related Securities
- Employment Related Securities options
Employment Related Securities (ERS) process guidance
There have been recent changes to improve the Employment Related Securities detailed information.
How Employment Related Securities work if you’re an employer has been published which provides information about:
- the tax advantaged and non-tax advantaged share schemes
- how to register a scheme and what to report to HMRC
This is intended as a basic overview of ERS. To make sure you operate a fully compliant scheme, you may want to:
- read the technical manuals
- keep up to date with the latest HMRC bulletins
- take professional advice from an agent
Saving copies of your ERS return and EMI notifications
Before you submit your ERS end of year return or EMI notification, you should save a copy of it for your own records.
If you’re uploading an EMI notification attachment, you should save a copy of the file. If you’re filling in the details online, you should take screenshots of each page and save them, along with the confirmation page.
You will not be able to access a copy of what you submit through the online service once you’ve submitted it.
Ceasing your scheme if it’s no longer valid
You should cease your scheme if:
- you’ve registered a scheme in error
- it’s no longer operating
You must still submit an annual return for the tax year in which the final event date falls. Read Tell HMRC your Employment Related Securities scheme has ended to find out how to cease your scheme.
All ERS schemes must be linked to a live employer PAYE scheme. If you are closing your PAYE scheme, you may need to end your ERS scheme.
If you are ending your ERS scheme and no longer need your linked PAYE scheme, find out more about closing your PAYE scheme.