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Employment Related Securities (ERS): What you need to know before the 6 July deadline
3rd June 2025
If your business has employees, directors, or even subcontractors who have acquired shares, options, or other types of securities, you may need to submit an Employment Related Securities (ERS) return to HMRC. With the filing deadline of 6 July 2025 fast approaching for the 2024/25 tax year, now is the time to review any activity and ensure compliance. In this article our tax team shares more about ERS and what you need to know before the 6 July deadline.
What is an ERS return?
An ERS return is an annual information submission to HMRC detailing any reportable events involving securities (such as shares or options) provided to employees or directors. It’s a requirement whether or not your company operates a formal share scheme, even one-off or informal events may trigger a reporting obligation.
Who counts as “employed”?
- Employees
- Directors (including non-executives)
- In some cases, subcontractors
What typically counts as a “security”?
- Shares
- Share options
- Rights to acquire shares in the future
- Restricted Stock Units (RSUs)
- Convertible securities
- Notional loans following acquisitions
When is an ERS return required?
You must submit an ERS return if, during the tax year, there has been any acquisition, transfer, adjustment, or disposal of securities involving someone in an employment relationship. Common examples include:
- New share issues or transfers of existing shares
- Gifts of shares
- Share-for-share exchanges or group reorganisations
- Lapses, cancellations, or revaluations of options
- Adjustments to share classes or rights
- Uplifts in share value following restructuring
The amount paid for the shares is irrelevant, it’s the fact that the transaction occurred that matters.
Are there any exemptions?
Yes, but they are limited. The most common exemptions include:
- Transfers made as part of normal domestic, family, or personal relationships (e.g. family succession )
- Acquisitions through an independent broker for example, when dealing with listed companies
- Certain transactions on incorporation of a business
However, if a scheme is registered online (even just once), an annual return is required every year until the scheme is formally closed, regardless of whether any new transactions have occurred.
Important reporting requirements
- Deadline: 6 July following the end of the tax year (same as P11Ds)
- Period covered: 6 April to 5 April annually
- How to file: Online via the HMRC PAYE portal
- Who can file: The employer or a nominated company within a group or your agent
Failure to file on time results in automatic penalties, starting at £100 per scheme — and these increase over time.
Common ERS pitfalls
Many businesses are caught out because they:
- Don’t realise informal or one-off share transactions are reportable
- Forget to register new schemes or events with HMRC
- Don’t recognise that overseas share plans with UK participants can still trigger UK reporting
- Miss the impact of corporate restructures (e.g. HoldCos, share splits, class re-designations)
Remember HMRC does not send reminders, penalties are automatic and enforced.
What should you do now?
- Review all share-related activity involving employees, directors, or subcontractors
- Check that all schemes are registered and returns are up to date where required
- Ensure Section 431 elections are completed where needed
- Plan ahead — don’t leave it until the last minute to file
If you’re not sure something qualifies, it’s better to get advice than miss a filing.
Need help with your ERS return?
We can support you with registering schemes, preparing valuations and submitting returns on time. Get in touch with our friendly team to discuss your situation.