Share scheme returns – penalties are now being issued

Employers operating employee share schemes may now be receiving penalties from HMRC for failing to submit their employment related securities (ERS) end of year returns on time.

ERS schemes are used to provide employees with shares, options and other securities as rewards or incentives. Employers must submit an annual ERS return for every scheme registered with HMRC, including a nil return where there have been no reportable events. The deadline for 2025-26 returns was 6 July 2026.

A £100 late filing penalty is automatically issued where a return was not submitted by the deadline. If the return remains outstanding three months after the deadline, a further £300 penalty applies. Another £300 penalty applies if it is still outstanding six months after the deadline. HMRC may also charge daily penalties from nine months after the original deadline.

Employers who have received a penalty must still submit the outstanding annual return or nil return. This also applies where a penalty is being appealed. If a scheme has ceased, the employer must enter the final event date and submit the return for the tax year in which the scheme ended.