Have You Given Shares to Employees or Directors? You may need to report this by 6 July

Have You Given Shares to Employees or Directors? You may need to report this by 6 July

If your business has rewarded employees or directors with shares or share-based incentives in the last tax year, there’s a key deadline coming up that you need to know about. By 6 July 2025, you may be required to report these awards to HM Revenue & Customs (HMRC) as part of an Employment Related Securities (ERS) return.

This is an area many businesses overlook especially if share awards were informal, one-off, or part of a longer-term incentive plan. But missing the deadline can lead to automatic penalties and unnecessary stress.

Why does this matter?

The ERS return is HMRC’s way of keeping track of how businesses reward people with ownership or potential ownership in the company. Whether you’ve offered actual shares, the promise of future shares, or something more complex like growth shares or conditional options, the chances are you’ll need to tell HMRC.

You may also need to file a return if you’ve previously registered a share scheme with HMRC, even if nothing happened this year. A nil return is often still required, and it’s easy to forget if the scheme hasn’t been used for a while.

Who typically needs to file a return?

This isn’t just for large companies or complicated corporate structures. In fact, many of the businesses we support are owner-managed, family-run, or scaling start-ups who are using share rewards to retain and motivate their people.

For example, we regularly assist:

• Business owners who’ve transferred shares to key employees or directors
• Founders who’ve promised shares to early staff as part of a growth plan
• Companies rewarding directors with equity instead of cash bonuses
• Businesses that are closing down old share schemes or making changes to existing ones

Often, clients don’t realise that these actions trigger reporting requirements or that the deadline is so firm.

What does the ERS return involve?

The return itself must be submitted online through HMRC’s system and includes uploading a spreadsheet using a specific format. Before that, you’ll need to make sure any relevant share scheme is registered with HMRC. And if a scheme has ended, it needs to be formally closed on the system.

This isn’t a quick task particularly if it’s your first time and it’s easy to get caught out. If HMRC doesn’t receive your return by 6 July, a £100 penalty is issued automatically, and it increases if the return remains outstanding.

What should I do now?

With a few weeks still to go, now is the ideal time to get everything in order. Whether you're confident a return is needed or you’re not sure if your business qualifies, it’s worth speaking to someone who can guide you through it.

At Ward Williams, we make the process simple and clear. We’ll help you understand if a return is needed, prepare and file it on your behalf, and make sure your scheme is correctly registered or closed where needed.

Let’s work together

We believe financial compliance should feel manageable, not intimidating. If you’ve awarded shares or share options this year or even just thought about it, get in touch to make sure everything is covered. You’ve still got time, and we’re here to help.

For further information please get in touch with our Ward Williams team.  Call 0193230664 or email enquiries@wardwilliams.co.uk.