Share scheme returns – penalties are now being issued
Share scheme returns – penalties are now being issued by HMRC to employers who missed the deadline. Specifically, these penalties target employers who failed to submit their employment related securities (ERS) end of year returns on time. As a result, any employer that operates an employee share scheme should check its filing position now.
What are ERS schemes?
Employers use ERS schemes to reward or incentivise their employees. For example, these schemes can provide:
- shares
- options
- other securities.
What do employers need to file?
Employers must submit an annual ERS return for every scheme they have registered with HMRC. Importantly, this applies even when there have been no reportable events. In that case, employers must submit a nil return instead.
The deadline for 2025-26 returns was 6 July 2026. So, if you missed it, you may already have received a penalty.
How do the penalties work?
HMRC applies penalties in stages, and the cost rises the longer a return stays outstanding:
- First, HMRC automatically issues a £100 penalty if you miss the deadline.
- Next, a further £300 penalty applies if the return is still outstanding three months later.
- Then, another £300 penalty applies if it remains outstanding six months after the deadline.
- Finally, HMRC may charge daily penalties from nine months after the original deadline.
In other words, a small oversight can quickly become an expensive problem.
What should you do if you’ve received a penalty?
Now that share scheme returns – penalties are now being issued, employers need to act quickly. Above all, a penalty doesn’t remove your duty to file. You must still submit the outstanding annual return or nil return.
Likewise, this applies even if you’re appealing the penalty. Therefore, file the return first and pursue the appeal alongside it.
What if your scheme has ended?
Sometimes, a scheme stops operating. In that situation, you must still close it down properly. To do this, enter the final event date. Then, submit the return for the tax year in which the scheme ended. Otherwise, HMRC may continue to expect returns and charge further penalties.
Get in touch
Have you missed an ERS deadline or received a penalty from HMRC? Our experienced team can help you file outstanding returns, review your schemes and appeal penalties where appropriate. Contact us today for clear, expert advice.
