HMRC has warned that Brits could be issued with £300 fines after a July change. The deadline for submitting 2025 to 2026 employment related securities (ERS) end of year returns was July 6. This refers to shares, options, or other financial instruments gained by employees or directors because of their employment.
Penalties for late filing
Officials issued an update to tax agents and advisors informing them of developments and changes to legislation and allowances relating to UK tax on September 18. The Government said: "If your client has not yet submitted a return, including a nil return, they may already have received a £100 late filing penalty. Additional automatic penalties of £300 apply if a return remains outstanding three months after the filing deadline, with a further £300 penalty if it is still outstanding after six months. If your client appeals an ERS late filing penalty, any outstanding returns must still be submitted to prevent further penalties."
Scheme requirements and further penalties
Officials added: "An ERS scheme must be linked to a live PAYE scheme. If a PAYE scheme is being closed, employers should tell HMRC if any associated ERS schemes also need to be closed. If a scheme is no longer required, employers should cease the scheme with HMRC. An annual return must still be submitted for the tax year in which the final event date falls."
Nine months after the original deadline, HMRC may apply further penalties of £10 a day. Brits can appeal.
How to appeal and avoid further penalties
The Government said: "If you do not agree with a penalty you can appeal. We’ll only accept your appeal if you’ve already met your reporting obligations. If an annual or nil return is due and you have not sent it, send it immediately to minimise the number and amount of penalties. If your scheme is ceased but you have not yet notified us, you must enter your final event date online. Your penalty may be cancelled or amended if you have a reasonable excuse for not submitting your return on time and it was submitted without unreasonable delay once the excuse ceased."
If an individual has received a late filing penalty, they must submit their annual return or a nil return as soon as possible, HMRC says. If their scheme has ended, they must enter the final event date online and submit either a return or a nil return for the ceased scheme. The Government said: "By doing this you may avoid further penalties. You should do this even if you have, or are going to, appeal the late filing penalty."
