If your business has issued shares, options, or other types of securities to employees or directors during the 2024/25 tax year, you may have an obligation to submit an Employment-Related Securities (ERS) return to HMRC — and the deadline of 6 July 2025 is fast approaching.
Failure to comply can result in penalties, even if you had no activity but previously registered a scheme. So how do you know if this applies to you?
What is ERS and who needs to report?
ERS reporting is a legal requirement for companies that offer equity-based incentives or have made employment-related share transactions. This includes both formal share schemes and one-off awards.
You will likely need to report if, during the 2024/25 tax year, you:
- Issued shares, share options, or loan notes to any employees or directors
- Allowed an employee to exercise or assign options
- Removed or changed any restrictions on existing shares
- Carried out a conversion or disposal of shares or other securities
- Took action that increased the market value of securities artificially
The rules apply not just to large, listed companies with formal share plans, but also to private businesses and start-ups that reward employees through equity.
What’s not reportable?
There are limited exceptions, including:
- Transactions involving shares in newly incorporated companies before they start trading
- Share movements that are purely personal (e.g. family transfers unrelated to employment)
Even in these cases, you should review carefully to ensure all conditions are met before deciding not to report.
Registering and filing – what’s required?
Before filing, any relevant share scheme or arrangement must be registered with HMRC via your online PAYE portal.
Once registered, an annual return is due every year — including nil returns, even if no transactions occurred.
The deadline for submitting returns for the 2024/25 tax year is 6 July 2025. If this is missed, HMRC may issue the following penalties:
- £100 if the deadline is missed
- An additional £300 on 6 October if still outstanding
- A further £300 on 6 January
- Daily penalties of £10 may begin from 6 April 2026
Inaccurate returns can also result in fines of up to £5,000
Why is this important?
Aside from avoiding penalties, ERS reporting plays a important role in maintaining transparency around how your business incentivises and rewards staff.
It also sends a clear message to HMRC that your company has a strong grasp of its tax, compliance, and employment obligations — something especially important if you’re growing, raising investment, or undergoing a transaction.
How bk plus can help
ERS reporting can be complex — especially where share transactions aren’t part of your day-to-day operations. At bk plus, we help clients across all sectors assess whether they have an obligation, register schemes where required, and prepare and submit returns accurately and on time.
We can also support with:
- Reviewing historic share movements for unreported activity
- Advising on the structure of future share-based incentives
- Liaising with HMRC where clarification is needed
Even if you’re unsure whether a transaction qualifies as “reportable,” it’s worth a conversation — and we’re here to guide you through it. Contact us today.