Employment Related Securities (ERS) rules apply when shares or similar company interests are given, transferred or sold in connection with someone’s role as an employee or director. This includes situations such as issuing new shares to an employee, gifting shares, transferring shares between directors, or putting loan stock arrangements in place. It can even apply when one employee or director sells shares to another. In most cases, if a transaction involves a current, former or future employee or director, it is treated as employment related. The only main exception is where the transfer can clearly be shown to be part of a family or domestic arrangement.
Even where no tax is due, the company still must report these transactions to HMRC through an ERS annual return. The return is simply a way for HMRC to collect information. Whether tax arises depends on the details of the transaction, but reporting is required regardless.
For the tax year ending 5 April 2026, the ERS annual return must be filed by 6 July 2026. Before a return can be submitted, the company must register a “scheme” through its online HMRC account, even if there has only been one transaction during the year. The registration process can take up to six weeks, so it is best to start early. Registration must be completed by the company itself, although Burgis & Bullock can support the process once the scheme appears on the system.
HMRC will charge penalties if the return is filed late, so it is important to allow enough time for both the registration and the submission.
Emma Fisher, Senior Corporate Tax Manager at Burgis & Bullock, notes: “ERS reporting often surprises companies because even very simple or one‑off share transactions can trigger the requirement. The deadlines are strict and the registration process takes time, so early planning is essential.”
If you are unsure whether a share transaction triggers an ERS filing requirement, Burgis & Bullock can review your situation and ensure everything is handled correctly and on time. Contact your local B&B office today www.burgisbullock.com
Emma Fisher, Senior Corporate Tax Manager at Burgis & Bullock
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