Employment Related Security Reporting – 2022

BLOG28th Mar 2022

As the end of the tax year is almost upon us, it is important for employers to consider their Employment Related Securities (ERS) reporting requirements.  

ERS includes any share-related securities held (or interest held in) by an individual where the right or opportunity to hold is:

  • made available by reason of the employment of the individual acquiring the securities (or interest in the security) or any other individual; or 
  • made available by an individual’s employer.

If interest in shares is made available by a connected party, securities will be considered as being made available by reason of employment and therefore fall within ERS legislation. 

We have seen a significant rise in the number of employers which exercise ERS, hence, it is increasingly important that employers consider their reporting responsibilities. ERS returns are submitted through an employer’s HMRC portal. All movements or non-movements require a return to be submitted. This can be an overwhelming process administratively, however, although tricky and requiring care, is a worthwhile exercise. It should be noted that is it not only shares and share option awards that fall under the jurisdiction of ERS.  

The submission deadline of ERS returns for the 2021/22 tax year (being from 6 April 2021 – 5 April 2022) is 6 July 2022. Failure to submit ERS returns can lead to penalties of up to £700 (plus a potential £10 a day penalty for any returns more than nine months late). Furthermore, incorrectly completed returns can face penalties of up to £5,000. 

Employers who are filing for the first time are required to register with HMRC, a process which can take up to 28 days. Therefore, it is recommended that the reporting process is started as early as possible to avoid any potential late submission penalties.  

At AAB, we have a skilled and dedicated team available to help employers meet their ERS reporting requirements.

If you require support in this area, or think you may, please contact either Gregor McCallan or your usual contact at AAB.

Find out more about AAB’s specialist Expertise to Entrepreneurs team

How AAB can help you with

Corporate Tax

Corporate Tax covers a broad and complex area of tax legislation, so we provide a suitably broad and comprehensively experienced team to support your business with pragmatic, commercial advice. Businesses of all sizes and types, and across a wide range of sectors, benefit from our comprehensive corporate tax compliance and advisory service. We have exceptionally knowledgeable tax teams distributed across our offices, ready to support you with their wealth of experience and expertise. We can manage your global tax exposure with a coordinated response that saves you having to seek advice from separate advisors.

View our corporate tax service

Related services