HMRC released updated guidance on 30 October 2026 regarding the filing of Employment Related Securities (ERS) annual returns for schemes that have been closed or wound up. The guidance addresses common confusion among employers and scheme administrators about whether a final return is required after a scheme ceases to operate, and the treatment of outstanding securities that have not been exercised or released. The clarification references the ERS (Annual Returns) Regulations 2014 and the Finance Act 2026 amendments to Section 702 ITEPA 2003.
Key Takeaways
- Final Return Mandatory: A final ERS annual return must be submitted for the tax year in which the scheme is formally closed, even if no new securities were granted during that year.
- Outstanding Securities Reporting: Any unexercised options or unvested awards at the date of closure must be reported with a nil value, along with an explanation of the scheme’s termination.
- Penalty Avoidance: Failure to submit the final return by the statutory deadline (6 July following the tax year) incurs automatic penalties starting at £100, escalating to daily penalties after six months.
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