HMRC have announced that Employment Related Securities specialist guidance and forms can now be accessed from the GOV.UK website. The new link to use is:
www.gov.uk/business-tax/employment-related-securities
From this site there are links to information about:
- Registration of share plans and online filing
- Annual return forms and templates
- ERS manual
- ERS bulletins
Using this link you can access the most recent Employment-Related Securities Bulletin (Number 18) which has articles about the annual return checking services, end of year returns, the template spreadsheets and technical notes.
If you compile data for your company’s employee share plan annual returns, you need to ensure that you are collecting the additional information that is now included on the returns. To do this you need to access the templates on the site and review these together with the update in Bulletin 18.
From next year, where we are providing annual return data to our clients this will be provided in the new format. We have been reviewing the updated questions and have asked HMRC to clarify a few of the updated questions detailed in Bulletin 18. If you are going to be filing your company’s returns, this Bulletin provides information about how you can preview the end of year filing process using some example scenarios.
Going forward, information about participants who left the company in a previous tax year need to be included on the previous year’s annual return by making an adjustment to the previous return. This is likely to cause additional work related to adjusting and then filing those returns. HMRC are looking for reassurance that companies have appropriate procedures in place for the timely reporting of leavers to administrators.
Foreign Account Tax Compliance Act (FATCA) and OECD Common Reporting Standard (CRS)
Following discussions between offshore trustees and local authorities, we are waiting to see whether offshore FATCA Guidance Notes are to be updated to include a change regarding Employee Benefit Trusts. Changes could mean that FATCA reporting will not be required for shares transferred from discretionary Employee Benefit Trusts as part of an employee share plan.
On a related topic, FATCA-style reporting is likely to be extended to other countries with regulations enacted in 2015. HMRC issued a discussion document (Implementing Agreements under the Global Standard on Automatic Exchange of Information to Improve International Tax Compliance) which has the following background:
‘In April 2013 the UK along with France, Germany, Italy and Spain (the G5) set up a pilot to explore the possibility of developing a common approach to automatic exchange of financial account information. This was adopted by the G20 leading to work being commissioned with the OECD to develop a new global standard.
In February 2014 the OECD delivered the Model Competent Authority Agreements for a Common Reporting Standard (the CRS) which was approved by the G20 as the Global Standard for Automatic Exchange of Financial Account Information.
The CRS is designed to provide maximum consistency with US FATCA. This is in order to minimise the additional costs and burdens to business from the increased reporting requirements. There are areas where the CRS does not exactly mirror the US model due to differences in context, for example the taxation systems of the participating jurisdictions.
As at 14 July 2014, 45 jurisdictions, including the UK, have agreed to early adoption of the CRS. Under the proposed regulations that are the subject of this discussion financial institutions will be required to capture information in relation to accounts in existence as at 31 December 2015 and new accounts opened on or after 1 January 2016 with first reporting in 2017.’
Schedule 3 of the draft CRS Regulations lists products likely to be excluded from reporting and these include UK tax advantaged SIP, SAYE and CSOP plans. As per the UK FATCA Guidance, we would like to see a consistent approach adopted in relation to release of employee shares from a discretionary trust.
Out and about
We have recently attended conferences organised by ifsProShare and GEO and have supported our clients in sharing information about their share plans. Phil Ainsley, Managing Director, Employee Services and Julie Freakley, Personnel Systems Information Manager at Michelin presented a case study at GEO’s Pan European conference in Paris on 14 November on how Michelin launched their successful worldwide share plan (BIB’Action). Carl Trimmer, Client Services Manager, Equiniti and Francis O’Mahony, Head of Employee Share Plans and Share Registration, BT Group presented their case study on BT Group’s 2014 August SAYE maturity at the ifsProShare conference on 14 October. Also at that conference, Phil and Jennifer Rudman, Strategic Development Manager, Equiniti discussed the impact of SIP and SAYE limit changes.
Phil explains, ‘Presenting alongside clients at industry conferences is a great way of sharing information and best practice with other companies and helps to showcase the successes that are being achieved with employee share plans.’
If you would like to present a case study on your share plan and would like us to be involved we would be happy to discuss this with you.
For more information on any of these topics please contact your relationship manager.
Ezine issue: December 2014