HMRC has updated its guidance on EMI options in the Employee Tax Advantaged Share Schemes User Manual. This now includes information on how to correct errors in online notifications in respect of the grant of an EMI option.
Under EMI legislation, HMRC can amend a notification of the grant of an EMI option to correct obvious mistakes. However, notifications must now be made online and it appears that, for technical reasons, neither HMRC nor the company are able to correct an error in a submission that has already been made via the online system.
The updated guidance states that if there is a significant error in an online notification (for example, the number of shares or the exercise price being incorrect), the company should write to or email HMRC within nine months of submitting the notification. HMRC will then tell the company what it needs to do to correct the error.
Where there has only been a minor error (for example, a spelling mistake), the company should make a note in its records and keep this for any future HMRC enquiries. This information may also be needed for due diligence enquiries on a corporate transaction.
It is worth noting that the guidance is solely in relation to an error in the information submitted to HMRC and does not relate to any error in the underlying documentation itself. Where an error has been made in the underlying documentation, we recommend that you seek legal advice in respect of the courses of action that may be available to you.
Jonathan Fletcher Rogers, Nicky Griffin & Andrew Nealey, Addleshaw Goddard (Employee incentives update)
HMRC has updated its guidance on EMI options in the Employee Tax Advantaged Share Schemes User Manual. This now includes information on how to correct errors in online notifications in respect of the grant of an EMI option.
Under EMI legislation, HMRC can amend a notification of the grant of an EMI option to correct obvious mistakes. However, notifications must now be made online and it appears that, for technical reasons, neither HMRC nor the company are able to correct an error in a submission that has already been made via the online system.
The updated guidance states that if there is a significant error in an online notification (for example, the number of shares or the exercise price being incorrect), the company should write to or email HMRC within nine months of submitting the notification. HMRC will then tell the company what it needs to do to correct the error.
Where there has only been a minor error (for example, a spelling mistake), the company should make a note in its records and keep this for any future HMRC enquiries. This information may also be needed for due diligence enquiries on a corporate transaction.
It is worth noting that the guidance is solely in relation to an error in the information submitted to HMRC and does not relate to any error in the underlying documentation itself. Where an error has been made in the underlying documentation, we recommend that you seek legal advice in respect of the courses of action that may be available to you.
Jonathan Fletcher Rogers, Nicky Griffin & Andrew Nealey, Addleshaw Goddard (Employee incentives update)
