In the 8 October 2026 Tax Matters Digest, KPMG highlights HMRC’s latest compliance campaign targeting employment-related securities (ERS). HMRC has issued ‘nudge’ letters to individuals holding employment-related securities, asking them to verify their employers’ ERS reporting and withholding obligations. The letters focus on potential under-reporting of taxable events such as share option exercises, restricted securities units (RSUs), and other equity incentives. KPMG’s article details the content of the letters, the underlying reporting requirements under the Income Tax (Earnings and Pensions) Act 2003, and the actions employers should take to mitigate risks, including reviewing annual ERS returns and PAYE settlement agreements.
Key Takeaways
- Targeted Compliance Campaign: HMRC is using data analytics to identify discrepancies between employee tax returns and employer ERS filings.
- Employer Liability Exposure: Failure to correctly report and withhold on ERS events can lead to employer PAYE liabilities, interest, and penalties.
- Proactive Review Recommended: Employers should audit their ERS processes, ensure timely annual returns, and consider voluntary disclosures where errors are found.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement