Employers who operate an employment related securities (ERS) scheme for 2024/25 must submit an annual return to HMRC by 6 July 2025 to avoid a late filing penalty. This applies regardless of whether any transactions occurred during the year or whether a reminder has been received by HMRC.

HMRC has included some guidance for employers on completing ERS returns in recent editions of its newsletters. Employers should:

• use the correct and most up to date return template, otherwise HMRC’s online service may reject the submission;
• save a copy of the return before they submit it to HMRC, as they will not be able to access a copy through HMRC’s online service; and
• consider having a back-up administrator for their government gateway account, as HMRC says many employers miss the deadline because they discover they can’t log in.

You can find more guidance from HMRC in newsletters 59 and 60. 

Joint election to transfer NIC

An employer may have a liability to secondary NIC in relation to employment related securities (ERS). If this is the case, the employee is entitled to a deduction equal to the value of the employer’s NIC bill from the amount chargeable to income tax on the same taxable event.

From 1 May 2025, the employer now has two options:

• completing a legal document that is pre-approved by HMRC; or
• drafting their own legal document.

HMRC has published separate documents for transferring NIC to a single employee and to more than one employee. The employer should complete, sign and date the relevant document; have the employee(s) sign and date the document; and retain the document so that it can be provided to HMRC on request. The election is effective once it has been signed by both the employer and the employee(s). 

If the employer drafts their own document, they should send this to HMRC by post for approval before asking the employee to enter into the agreement. HMRC says that it may take up to 30 days to respond. 

HMRC’s guidance contains more information, including how to access HMRC’s pre-approved documents and where the employer should send their own document for approval.