HMRC extends employee share scheme online filing deadline after technical issues

Out-Law News | 21 Jul 2015 | 5:17 pm | 2 min. read

Employers due to file year-end returns online in relation to their UK employee share schemes will now have until 4 August 2015 to do so after technical difficulties interfered with the previous 6 July deadline, HM Revenue and Customs (HMRC) has announced.

HMRC has introduced online filing from tax year 2014/15, with penalties applicable where returns are late or incorrect. However, the new system failed ahead of the 6 July deadline and remained out of service until 20 July, according to share plans and incentives expert Suzannah Crookes of Pinsent Masons, the law firm behind

Crookes said that the problem did not appear to have affected the online scheme registration system or the online file checking service for return spreadsheets.

"HMRC appears not to have made any announcements about these technical problems on its website, instead communicating with companies and advisers through professional bodies," she said. "Some affected companies, therefore, may not be aware of HMRC's approach to dealing with these problems."

"Compiling the returns in the required format has proven to be quite a time-consuming process for companies with many share scheme participants, so the extended deadline could be a windfall for any company that had previously concluded it could not meet the original deadline," she said.

The new e-filing system was introduced this year and replaces and updates the previous paper forms. In order to use the service, companies must first register all their employee share plans and arrangements that existed during the 2014/15 tax year with HMRC via the Pay as You Earn (PAYE) online services portal. Following registration, share plan annual returns should be filed online, also via the PAYE online services portal.

Plans that benefit from tax advantages in the UK must also be formally 'self-certified' to benefit from, or continue to benefit from, tax-favoured status as part of the online registration process. This applies to Company Share Option Plans (CSOP), Sharesave/Save As You Earn (SAYE) and Share Incentive Plans (SIP), but not to Enterprise Management Incentive Plans (EMI).

HMRC said in its announcement that late-filing penalties would not be charged "if a customer files their return on or before Tuesday 4 August". There was no need for affected companies to contact HMRC, it said.

It is not yet clear whether those customers who filed their returns on or before 3 July and received an on-screen acknowledgment will need to submit them again. HMRC said that it was "still investigating the potential impact" of the failure on those customers, and would publish a further message in due course.

"HMRC's message raises the possibility that companies who had filed returns before these technical problems arose might have to re-submit," said share plans and incentives expert Matthew Findley of Pinsent Masons. "That, and the length of the service outage, suggests that the problems were serious."

"Hopefully, HMRC will update us about the possible need to resubmit soon. If they do, we will publish further details as soon as we can. It is to be hoped that HMRC will also reassure companies that the system will be made more robust before the 2015/16 returns need to be filed," he said.