Employment-Related Securities Bulletin Employment-Related Securities Bulletin provides information and updates on developments relating to employment-related securities, including

The Employment-Related Securities Bulletin provides information and updates on developments relating to employment-related securities, including the tax-advantaged employee share schemes. This bulletin contains articles on:

1. Introducing the employee share schemes annual returns checking service

2. End of year returns service preview

3. The ERS end of year template spreadsheets

4. Technical note for users writing their own program

Enquiries about the content of this bulletin should be addressed to: Hasmukh Dodia Employee Shares & Securities Unit HMRC Room G53 100 Parliament Street London SW1A 2BQ Email: [email protected] The Bulletin will be published as and when sufficient articles or updates are available, or when HMRC has an item that it wishes to bring to your attention quickly. We welcome any suggestions for future articles although we cannot guarantee publication. A reference to ITEPA is a reference to the Income Tax (Earnings & Pensions) Act 2003 as amended.

Employment-Related Securities Bulletin

Number 18 October 2014

mailto:[email protected]

1. Introducing the employee share schemes annual returns checking service

User feedback relating to our prototype end of year returns service revealed that you wanted to use your own software and spreadsheets to record reportable event data. You told us that you wanted to be able to upload this data rather than have to manually enter it. So, to make sure that your spreadsheets are formatted correctly for upload, we are introducing a checking service from 31 October 2014. Both employers and their agents can use the checking service provided they have access to the ERS service and the employer has registered at least one scheme. Access the checking service via the ‘view schemes and arrangements’ page within the ERS service. This provides a secure environment for checking your data. The data will not be saved to any HMRC system and does not form part of the submission of your return. Checking your spreadsheets regularly allows you to identify and then correct formatting errors. This makes it easier to submit your return at the end of the year. You’ll need to know which type of ERS scheme or arrangement the template spreadsheet is for and know where your spreadsheet is stored. The time it takes to check a file depends on the speed of your internet connection and the size of your template spreadsheet. Click here to access the checking service https://www.gov.uk/spreadsheet-checking-service-employment-related-securities-ers

We want this service to be the best it can be, so if you have any comments on it please let us know by using the feedback button within the checking service itself. 2. End of year returns service preview We are publishing today a series of screen shots that show in advance what the service may look like. There are a series of scenarios which you can click through. The preview is for informational purposes only. Click here to access the prototypes http://ers-return.herokuapp.com/

3. The ERS end of year template spreadsheets You told us that some of the questions on the templates are not very clear. We have listened and so are expanding on some of the questions. At the end of this bulletin are tables showing the amendments. The tables show which sheet of each template and which cell reference we are talking about and if the title or instructions have changed. Remember that if you are building your own spreadsheet, you mustn’t move, add or delete any columns or rows.

https://www.gov.uk/spreadsheet-checking-service-employment-related-securities-ers

https://www.gov.uk/spreadsheet-checking-service-employment-related-securities-ers

http://ers-return.herokuapp.com/

http://www.hmrc.gov.uk/shareschemes/annualreturns-index.htm

We have numbered the questions to help you navigate through each sheet. This is because some questions will not be relevant to the event you are reporting. We’ve only included questions which need clarifying, not those that don’t. And there will be some minor changes which we haven’t included here. For example on most of the sheets we have a column for ‘Employee second name’. The updated version will say ‘Employee second name (if applicable)’. These amendments should be read together with the guidance which is already available on our webpages at http://www.hmrc.gov.uk/shareschemes/annualreturns-index.htm We aim to incorporate all these changes on a second version of the templates which we hope to release sometime in the New Year. We will also update our guidance. We hope you find these clarifications useful. You can let us know by emailing us at [email protected] 4. Technical note for users writing their own program We know that some of you have written your own spreadsheets or software programs based on the ODS templates that we published earlier in the year. To help you make sure that you are keeping data in the right format we are producing a series of technical notes that will confirm how you should be keeping the event information. The note for ODS formats is available now and a similar note for .csv and other formats will be available later in the year. If you'd like us to send you a copy of the ODS note or would like a copy of the .csv note when it's ready, please contact Sharon Johnson at [email protected]

http://www.hmrc.gov.uk/shareschemes/annualreturns-index.htm



Changes to CSOP attachment template headings Sheet: CSOP scheme template – Options granted Starting at cell reference C13, questions on this sheet should be numbered 1-9

Cell reference (column/row)

Question number Question

E13 3 Over how many shares in total were CSOP options granted

F13 4 Unrestricted Market Value (UMV) of option exercise price per share £

H13 6 Are the shares under the CSOP option listed on a recognised stock exchange? Enter yes or no

K13 9 Using the UMV at the time of each relevant grant, does any employee hold unexercised CSOP options over shares totalling more than £30k, including this grant? Enter yes or no

Sheet: CSOP scheme template – Options released (including exchanges) cancelled or lapsed in year

New ‘How to complete this schedule’: Enter details of each employee and the Company Share Option Plan (CSOP) below. Exclude any employees who received nil on release, cancellation or lapse of the option Please note: Enter monetary values in pound sterling including pence up to 4 decimal places Starting at cell reference C13, questions on this sheet should be numbered 1-9 Please note: It is not mandatory to enter an employee’s second name (Q5)



D 13 2 Was money or value received by the option holder or anyone else when the option was released, exchanged, cancelled or lapsed? Enter yes or no.

If yes go to next question

If no, no further information is required for this event.

Sheet: CSOP scheme template – Options and replacement options exercised Starting at cell reference C13, questions on this sheet should be numbered 1-23 Please note: It is not mandatory to enter an employee’s second name (Q5)



J13 8 Total number of securities employee entitled to on exercise of the option before any cashless exercise or other adjustment

http://www.hmrc.gov.uk/shareschemes/CSOP_template.ods

P13 15 If the answer to question 10 is no, was the market value agreed with HMRC? Enter yes or no

U13 19 Has a NICs election or agreement been operated? Enter yes or no

V13 20 Were all shares resulting from the exercise sold? Enter yes or no Answer yes if all the shares resulting from the exercise of the CSOP option were:

sold on the same day as the exercise

in connection with the exercise or sale instructions were given at the same time of the exercise for all the shares to be sold

W13 21 Leave blank

X13 22 Leave blank

Y13 23 Leave blank

Changes to EMI attachment template headings No changes to sheet: EMI template – Adjustment of options

How to complete this schedule:

Answer question 11 first. If the answer is yes, complete question 1-10. If the answer is no you can skip questions 1-10. Starting at cell reference C13, questions on this sheet should be numbered 1-14


Question number

Question

H13 6

PAYE reference of employing company

No changes to sheet: EMI template – Replacement of options

Sheet: EMI template – Options released, lapsed or cancelled Starting at cell reference C13, questions on this sheet should be numbered 1-12 Please note: It is not mandatory to enter an employee’s second name (Q5) or an employee’s National Insurance number (Q7)

K13 9

Number of shares subject to the option which have been released, lapsed or cancelled?

L13 10 Was money or value received? Enter yes or no


If no, no further information needed in relation to this event.

Sheet: EMI template – Non-taxable exercise of options Starting at cell reference C13, questions on this sheet should be numbered 1-18 Please note: It is not mandatory to enter an employee’s second name (Q3) or an employee’s National Insurance number (Q5)


Question number

Question

I13 7 Total number of securities employee entitled to on exercise of the option before any cashless exercise or other adjustment

M13 11 Are the shares subject to the option exercised listed on a recognised stock exchange? Enter yes or no

If yes go to question 14

If no go to next question

Q13 15 Were all shares resulting from the exercise sold? Enter yes or no Answer yes if all the shares resulting from the exercise of the CSOP option were:



http://www.hmrc.gov.uk/shareschemes/emi.htm

R13 16 Leave blank

S13 17 Leave blank

T13 18 Leave blank

Sheet: EMI template – Taxable exercise of options

Starting at cell reference C13, questions on this sheet should be numbered 1-20 Please note: It is not mandatory to enter an employee’s second name (Q5) or an employee’s National Insurance number (Q7)


Question number

Question

K13 9 Total number of securities employee entitled to on exercise of the option before any cashless exercise or other adjustment

Q13 15

Is the company listed on a recognised stock exchange? Enter yes or no



U13 19

Was a NICs election or agreement with the option holder been operated on the exercise? Enter yes or no

Changes to SAYE attachment template headings Sheet: SAYE scheme template – Options granted Starting at cell reference C13, questions on this sheet should be taken as numbered 1-8



F13 4 Unrestricted Market Value (UMV) of option exercise price per share £

Sheet: SAYE scheme template – Options released (including exchanges), cancelled or lapsed in year

New ‘How to complete this schedule’: Enter details of SAYE options released (including exchanges), cancelled or lapsed in year below. Exclude any employees who have cancelled their savings contract Please note: Enter monetary values in pound sterling including pence up to 4 decimal places.

Starting at cell reference C13, questions on this sheet should be taken as numbered 1-9



D13 2 Was money or value received by the option holder or anyone else when the option was released, exchanged, cancelled or lapsed? Enter yes or no.


If no, no further information is required for this event.

Sheet: SAYE scheme template – Options exercised Starting at cell reference C13, questions on this sheet should be taken as numbered 1-20



J13 8 Total number of securities employee entitled to on exercise of the option before any cashless exercise or other adjustment

K13 9 Were the shares subject to the option listed on a recognised stock exchange? Enter yes or no



N13 12 Actual Market Value (AMV) of a share on the date of exercise £

R13 16 Were all shares resulting from the exercise sold? Enter yes or no Answer yes if all the shares resulting from the exercise of the CSOP option were:



S13 17 Leave blank

http://www.hmrc.gov.uk/shareschemes/saye.htm

http://www.hmrc.gov.uk/shareschemes/saye.htm

T13 18 Leave blank

U13 19 Leave blank

V13 20 Leave blank

Changes to SIP attachment template headings Sheet: SIP template – Share awards Starting at cell reference C13, questions on this sheet should be numbered 1-18



T13 18 If any other types of shares were awarded at the same event date, enter the details on the next line.

Sheet: SIP template – Shares withdrawn from plan

Starting at cell reference C13, questions on this sheet should be taken numbered 1-17



Q13 15 Have all the shares been held in the plan for 5 years or more at the date they ceased to be part of the plan? Enter yes or no.

If yes, no further information is needed in relation to this event.

If no, go to question 16 R13 16 If no, for other than dividend shares, was PAYE

operated? Enter yes or no

http://www.hmrc.gov.uk/shareschemes/sip.htm

http://www.hmrc.gov.uk/shareschemes/sip.htm

Changes to OTHER (Form 42) attachment template headings Sheet: Other ERS schemes or arrangements – Grant of options

New title for sheet: Other ERS schemes or arrangements – Grant of securities options, including Restricted Stock Units (RSUs) Starting at cell reference C13, questions on this sheet should be numbered 1-4



E13 3 Unrestricted market value of a security at date of grant £

F13 4

Number of securities over which options granted

Sheet: Other ERS schemes or arrangements – Other option events New title for sheet: Other ERS schemes or arrangements – Other option events, including conditional awards. Options lapsed for nil consideration should not be included Starting at cell reference C13, questions on this sheet should be numbered 1-42 Please note: It is not mandatory to enter an employee’s second name (Q5) or an employee’s National Insurance number (Q7)



S13 17 Grantor Company Registration Number (CRN) , if applicable

T13 18 Grantor Company Corporation tax reference (if applicable)

AF13 30 Were the options exercised? Enter yes or no.


If no go to question 38

AG13 31 Total number of securities employee entitled to on exercise of the option before any cashless exercise or other adjustment

AH13 32 If consideration was given for the securities, the amount given per security £

AI13 33 If securities were acquired, Actual Market Value (AMV) of a security on the date of acquisition £

AJ13 34 If shares were acquired, are the shares listed on a recognised stock exchange? Enter yes or no.


If no go to question 37

AM13 37 If securities were acquired, deductible amount £ Then go to question 40

AN13 38 If securities were not acquired, was money or value received on the release, assignment, cancellation or lapse of the option? Enter yes or no


If no, no further information required on this event.

AP13 40 Was a NICs election or agreement operated? Enter yes or no

AR13 42 Was any adjustment made for amounts subject to the remittance basis? Enter yes or no

http://www.hmrc.gov.uk/shareschemes/other.htm

Sheet: Other ERS schemes or arrangements – Acquisition of securities Starting at cell reference C13, questions on this sheet should be numbered 1-40 Please note: It is not mandatory to enter an employee’s second name (Q5)



W13 21 If the securities are shares, are the shares listed on a recognised stock exchange? Enter yes or no. If yes go to question 70.

Z13 24 Number of securities acquired

AA13 25 Security type. Enter a number from 1 to 3. Follow the link at cell B10 for a list of security types. (1. Restricted securities; 2. Unrestricted securities; 3 Convertible securities)

If restricted go to next question.

If convertible go to question 32.

If both restricted and convertible enter 1 and answer all questions 26 to 32.

If neither restricted nor convertible go to question 33.

AC13 27 If restricted, length of time of restriction in years (if less than a whole year, enter as a decimal fraction e.g 0.6)

AD13 28 If restricted, Actual Market Value per security at date of acquisition £ (an entry should be made even if an election to disregard restrictions is operated).

AE13 29 If restricted, Unrestricted Market Value per security at date of acquisition £

AF13 30 If restricted, has an election been operated to disregard restrictions? Enter yes or no

AG13 31 If an election has been operated to disregard restrictions, have all or some been disregarded? Enter all or some

AK13 35

Was there an artificial reduction in value on acquisition? Enter yes or no

If yes go to next question,

If no, no further information is required on this event

AN13 38 If shares were acquired under an employee shareholder arrangement, was the total actual market value (AMV) of shares £2,000 or more? Enter yes or no

AP13 40 Was any adjustment made for amounts subject to the remittance basis? Enter yes or no

Sheet: Other ERS schemes or arrangements – Restricted securities post acquisition events Starting at cell reference C13, questions on this sheet should be numbered 1-23 Please note: It is not mandatory to enter an employee’s second name (Q5)



M13 11 Was the event a chargeable event? Enter yes or no. If yes go to next question If no go to question 19

T13 18 For variations, market value per security directly after variation £ Go to question 21

V13 20 If an election has been made to disregard restrictions, have all or some restrictions been disregarded? Enter 1 for all or 2 for some then go to question 22.

W13 21 Was a NICs election operated? Enter yes or no

No changes to sheet: Other ERS schemes or arrangements – Receipt of other benefits from securities post acquisition

Sheet: Other ERS schemes or arrangements – Convertible securities post-acquisition Starting at cell reference C13, questions on this sheet should be numbered 1-15 Please note: It is not mandatory to enter an employee’s second name (Q5)



M13 11 For receipt of money or value, enter amount or market value of the benefit £ Then go to question 14

Sheet: Other ERS schemes or arrangements – Discharge of notional loans post-acquisition Starting at cell reference C13, questions on this sheet should be numbered 1-13 Please note: It is not mandatory to enter an employee’s second name (Q5)



M13 11 Amount of notional loan discharged £

Sheet: Other ERS schemes or arrangements – Artificial enhancement of market value. Value of securities post acquisition Starting at cell reference C13, questions on this sheet should be numbered 1-14 Please note: It is not mandatory to enter an employee’s second name (Q5)



P13 14 Was any adjustment made for amounts subject to the remittance basis? Enter yes or no

No changes to sheet: Other ERS schemes and arrangements – Securities sold for more than market value post acquisition.

Documents

Employment-Related Securities Bulletin Employment-Related Securities Bulletin provides information and updates on developments relating to employment-related securities, including