6 October 2022

We are delighted to announce that registration is now open for Tapestry’s Certificate in Employee Share Plans 2023.
 
Following the positive feedback we received on both our 2021 and 2022 virtual courses, we are very pleased to confirm that the Certificate will be delivered virtually for 2023! The course will run with virtual interactive teaching sessions, so you can take the course wherever you are.
 
Similar to the 2022 course, we will continue to combine virtual learning with in-person networking events - so the class of 2023 will get the best of both worlds.
 
Whether you want to learn about plan design, or how to develop and operate share plans effectively and compliantly, our industry leading experts will give you the knowledge to find the solutions you need. The course will be delivered in a flexible way, whilst maintaining all the great aspects we know our attendees value.
 
Completing the course continues to result in an accreditation by the Chartered Governance Institute UK & Ireland.
 
What does the course cover?
Tapestry’s Certificate in Employee Share Plans is a must have for anyone who works with executive or employee share plans. This course will help you gain specialist knowledge in:

• plan design
• accounting principles
• legal requirements
• disclosure & reporting
• tax
• compliance

The course is suitable for anyone working with employee share plans, including HR, in-house legal, reward or other compensation professionals, those working in company secretariat, and external administrators, reward (or other non-legal share plan) professionals and benefits consultants.

How will the course be structured?
The course is split into 2 parts and each part will be taught over 5 short days on Zoom, finishing around lunchtime each day. These session timings make it easier and more practical for on-screen learning and to fit around other commitments. 

The course will combine larger group teaching with participatory learning through smaller breakout sessions, each hosted by a Tapestry lawyer. These sessions ensure an interactive experience and the opportunity to learn from each other, with fun exercises and practical examples to help consolidate your knowledge.

Are there in-person networking opportunities?
Yes. One of the most valuable added benefits of the course is the networking opportunities that you get from being with your classmates outside of the office. So, although the teaching will be virtual, we will be hosting optional in-person networking sessions in London. Dinner and drinks are on us!

How will the course be examined?
Exams will be held virtually for the 2023 course. The examination dates are set out below.

What are the dates for the course?
Each part of the course will run over five short days. Times below are UK times.

Time: 09.30 to lunchtime

Part 1: 15-19 May 2023      Part 2: 18-22 September 2023
Exam: 3 July 2023               Exam: 6 November 2023

Do I need to book time off work to attend the course?
Course participants should plan to attend the course teaching in an uninterrupted virtual learning environment. We know this can be challenging at times, however, we do find a strong connection between active course participation and exam success. We therefore recommend you and your employer treat the time you are attending the tuition (i.e. until around lunch time each day) as being ‘out of the office’, just like you would if the course was in-person. There is time to work in the afternoons if needed, though.

Note that you should plan to attend all of the course tuition (and minimum attendance requirements apply). Course participants will also need to commit to self-study time to prepare for the exams.
 
How much will the course cost?
Our 2023 course price is £4,250 plus VAT.

Register and pay by 31 December 2022 to get our Early Bird rate of £3,950 plus VAT.

To register or if you have any queries, please contact us

What our 2022 course participants say...

"Blown away by the exceptional quality of the Tapestry team, delivery of the course and the materials. Well done!"
Louise Poulter, BP          

"It is a must-do course for everyone involved in share related activities."
Hanna Oszczeda, Unilever
 
"Excellent content, delivered at a steady pace and explained really well. A great course for both those with some experience and those new to the area."
Steve Vanston, HWC     
 
"An extremely valuable and informative course, delivered by experienced and knowledgeable people in a clear and concise way."
Elliot Alexander, Computershare     

If you have any queries regarding the course, please do contact us. More information can also be found on our course website.

Best wishes

Team Tapestry

12 May 2022

All employers operating in the UK must submit an employment related securities (ERS) return to HM Revenue & Customs (HMRC) by 6 July following the end of the tax year. The deadline for filing the ERS return for the 2021/22 tax year, which ended on 5 April 2022, is Wednesday 6 July 2022. As the registration and reporting process can take some time, we recommend that employers prepare and file their return with HMRC as soon as possible.

What do I need to do?

Register any new plan or arrangements well in advance of the filing deadline

• Before you can submit your ERS return, all relevant share plans must have been registered online with HMRC via the registration services found here. To do this, you will need a Government Gateway user ID and password. Your UK payroll will typically have these details.
• You do not need to register each non-tax advantaged plan or arrangement separately. A single registration (and return) covering all existing non-tax advantaged plans will be sufficient. Please note, however, that all UK tax-advantaged plans must be registered separately with separate returns filed.
• UK tax-advantaged Share Incentive Plans (SIPs), Save As You Earn plans (SAYE plans) and Company Share Option Plans (CSOPs) must also be ‘self-certified’ online as being compliant with applicable UK tax legislation.
• If your plan has been registered and self-certified (if relevant) previously, you will not need to register it again. Registration will only be required for new plans implemented during the 2021/22 tax year. You should be provided with a unique scheme reference number for the plan within 7 days of registration.

File the ERS return – including any nil returns

• Once you have the unique scheme reference number for your plan, you will be able to file the ERS return.
• To file the return, you must complete the relevant online template located on the UK Government website here.
• Each template asks for prescribed information in connection with relevant ‘reportable events’.
• The template that you must use will depend on the plan that you are completing the return for. Plans that are not UK tax-advantaged plans will use the “other ERS schemes and arrangements” template and there are specific templates for each of the UK tax-advantaged plans.
• Once you have completed the template, you can run it through a formatting check and then submit the return here.

Key points to look out for

• Net-settled awards: HMRC has issued specific guidance on the reporting of net-settled awards (see ERS Bulletin 33). You may need to check processes carefully to determine whether tax on awards is funded by net-settlement or a “sell to cover” arrangement, and then organise reporting accordingly.
• Mobile employees: make sure you capture all of your plan participants who have been in the UK at any relevant time and have any UK income tax position in relation to their awards.
• Transactions: make sure the relevant entities are reporting share award activity related to any corporate transaction and, if your group has acquired a business or company, make sure any share awards in that entity are included in reporting where appropriate.
• No plan activity: where you have registered a plan, you must continue to file a return even where there has been no plan activity in the relevant tax year. In these circumstances, a ‘nil return’ should be filed.  
• Outages: in previous years, the website where the return is submitted has experienced outages. The web page that is found here will notify users of any current and planned issues or outages.
• Terminated plans: if you no longer use a share plan, you will still need to make an annual return for outstanding awards. Once all awards have been settled, you can stop filing but only after you have informed HMRC that the plan has terminated. Further information on this is available here.
• Templates: we recommend that you always download the most recent templates from here rather than using previously downloaded templates (note file names still have “2015-16” in the title). The templates are format sensitive and so generally no changes should be made. The checking service found here allows companies to check for formatting errors prior to filing the completed templates. We recommend using this service to as it is very helpful in pinpointing particular formatting issues so these can be corrected before any attempt to submit the templates.
• EMI plans: there are different (and more onerous) requirements and deadlines for UK tax-advantaged Enterprise Management Incentive (EMI) option plans. Please get in touch if you operate, or are intending to operate, an EMI plan.

Why is it important to register and file accurate returns on time?

Failure to register and/or file the return on time can have serious consequences:

• Financial penalties may be applied for returns which are materially inaccurate (potentially including both careless as well as deliberate errors). 
• Financial penalties automatically apply if you fail to correctly file your ERS returns by the 6 July deadline, even if no reportable events occurred in the tax year.
• Newly adopted UK tax-advantaged plans will lose their tax-advantaged status if you fail to register and self-certify them by the deadline where awards have been granted in the 2021/22 tax year. This means that any awards granted under new SIPs, SAYE plans and CSOPs on or after 6 April 2021 would not be tax-advantaged. 

Tapestry comment 
For some companies, the online ERS return process is now an established part of the annual cycle of share plans activity. Whether or not you are new to the process, the message remains to plan ahead and give plenty of time for gathering data in the correct format and checking the content. 
 
Recent guidance on, for example, reporting of net-settled awards, seems to indicate that HMRC will be looking at areas of alignment between the ERS returns and other elements of a company’s tax affairs (net settlement can in some cases impact the corporation tax treatment for example). We would therefore recommend that those managing the share plan return process should ensure data is aligned with that being used by other parts of the business.
 
The layout of the returns is inflexible and whilst the error checking service is very helpful in identifying pure formatting errors, there is no facility to include explanation of how awards have been reported in any cases which may be unclear. In these circumstances, we recommend companies keep a note of the approach they have taken and why, to support responses to any enquiries from HMRC in future.
 
If you have not yet done so, take time to ensure your plans are registered and that you are familiar with the requirements of the return(s) you need to file so that you can meet the 6 July deadline.

If you have any questions, please do contact us and we would be happy to help. 

Suzannah Crookes and Paul Abthorpe

May 2022

Staying ahead of the curve on regulatory and tax compliance is a never-ending task for companies. 

To help you keep on top of recent developments, here is our second quarterly Worldwide Wrap-Up of 2022, with some of the most recent changes that should be on your radar. We have summarised these topics briefly in this alert, however they will be covered in more detail along with other recent developments on our 11 May webinar.

Australia - employee share scheme tax reform
As discussed in our recent alert (here), legislation to remove the taxing point on cessation of employment for ESS awards received Royal Assent in February and will take effect from 1 July 2022. The removal of cessation of employment as a taxing point will apply to all existing ESS awards that have not yet reached a taxing point before the new law comes into effect in July.

Tapestry comment
This change brings Australia in line with many other jurisdictions, making administration of leavers much easier for global companies and giving "good leavers" the ability to settle taxes due at the applicable tax point. Where appropriate, companies should consider whether to advise participants with outstanding awards of this change to the tax treatment. Where companies have structured their ESS plans to make provision for the early tax treatment on cessation of employment (e.g., by providing for accelerated vesting or the removal of sale restrictions), they may wish to review those plan terms.

Canada - new date for extended trust reporting

Additional reporting for trusts in Canada was first proposed in 2018 (here) and is now firmly back on the agenda and due to come into force on 30 December 2022. The reporting applies to both resident and non-resident trusts. For non-resident trusts, the reporting will only apply to trusts which are already required to file a T3 return. The trusts will be required to provide additional information, including details of the identity of all trustees, beneficiaries and settlors of the trust, as well as the identity of each person who has the ability to exert control over trustee decisions regarding the appointment of income or capital of the trust.

Tapestry comment
As this change was proposed several years ago, many companies may have already factored it in to their reporting systems. In addition to the additional reporting obligations, there is a risk that trustees will not be able to provide the detailed information, either because they do not have access to the information or because they do not have the relevant consents to provide the data to the Canadian tax authorities. If you use a trust as part of your structure for offering shares to employees in Canada, you should consider whether it would be appropriate or possible to restructure the plan to remove the trust arrangement. 

Global tax rates

With several countries starting the 2022 tax year in March and April, and new rates being announced since our last webinar, we will look at where rates have changed. Our international advisors provide us with new rates to update our OnTap database as quickly as they become available. In this Wrap-Up we take a brief look at some of the changes.  
Bermuda - changes to payroll rates
New Zealand - increase in employee ACC levy
Singapore - proposal to increase top rate
UK - increase in social security 

Tapestry comment
We will discuss the detail of these changes during our 11 May webinar.

Global reporting

Remember to be ahead of the game with global reporting deadlines. Coming up in the next few months:
Australia - ESS statement (employees) - 14 July and ESS report (tax office) - 14 August
India - quarterly tax certificate - 31 July
Portugal - share plan reporting on Form Modelo - 19-30 June
UK - annual employee share plan return - 6 July

Tapestry comment
If you need this information for other jurisdictions not shown above, or if you need any assistance with any global filings, please do get in touch with us.

Portugal - securities filing update

In our 11 May webinar we will discuss the pre and post-offer filings required in Portugal if a company is relying on the securities laws employee exemption. We also wanted to share with you some recent advice we have received regarding the details of those filings, including when they are not required - for example, filings may not be required if it is possible to rely on the financial thresholds exemption.

Tapestry comment
Although this latest confirmation doesn’t go as far as we would like, we are always pleased to see regulators remove unnecessary filings. We look forward to the day that all EU regulators remove the outstanding obligations for filings in relation to employee share plans!

Russia - sanctions and counter-sanctions

As the situation in Ukraine continues, the sanctions imposed both on and by Russia are making it increasingly difficult for companies assessing whether they can, and should, make awards to employees in Russia (see our discussion here). The current counter-sanctions imposed by Russia restrict the ability of companies based in countries deemed by Russia to be unfriendly (including the US, the UK, EU states and Australia) to deliver shares to employees residing in Russia. There is some uncertainty over the application of the current rules to free shares. Even where it may be argued that it is possible to deliver shares under the Russian regulations, the processes being followed by third-party administrators and banks due to other restrictions or sanctions may also make it practically impossible to deliver shares in the normal way.

Tapestry comment
Many commentators do not believe it is possible to deliver shares to Russian residents at the moment without potentially breaching the sanctions and associated rules. The market position for the majority of our clients and listed companies operating globally is that they are considering cash-settling or delaying grants/vests where possible, in order to protect both their Russian employees and the company. This is a sensitive and complex issue and each company will need to decide what is appropriate in the context of its incentive plans, whilst complying with a changing regulatory landscape.

January 2022

Happy New Year and we hope that you had a relaxing break over the holidays.

Staying ahead of the curve on regulatory and tax compliance is a never-ending task for companies. 

To help you keep on top of recent developments, here is our first quarterly Worldwide Wrap-Up of 2022, with some of the most recent changes that should be on your radar. We have summarised these topics briefly in this alert, however they will be covered in more detail along with other recent developments on our 12 January webinar, which you can register for here. 

Australia - employee share scheme tax and regulatory reforms

As discussed in our last wrap-up webinar (and summarised here), last July the Australian government released draft legislation to implement reforms to the taxation and regulation of employee share schemes (ESS). In a case of one step forward and another step sideways, the government has separated the tax and regulatory reforms and, in November, tabled a bill in parliament which will remove the taxing point on cessation of employment for ESS awards. One advantage of the draft bill is that the removal of cessation of employment as a taxing point will apply to all existing ESS that have not yet reached a taxing point. Previously, the reform was only going to apply to awards granted after the start of the tax year following Royal Assent of the reform (which will not be before 1 July 2022). Plans to simplify the securities law exemptions are subject to a further period of consultation which started on 20 December and will end on 4 February.

Tapestry comment
The tax reform is widely welcomed, particularly for companies who have increasing numbers of mobile employees. The retrospective effect of the latest draft bill is also particularly helpful in widening the number of awards that can potentially benefit from the new rules. We will be following the changes and will keep you updated.

Canada - termination provisions upheld

The decision of Battiston v Microsoft (discussed here) originally held that a termination provision in an employee share plan was not enforceable, even though the employee had accepted the terms of the provision, on the grounds that it was "harsh and oppressive" and that insufficient steps had been taken to bring it to the employee’s attention. The appeal court overturned the previous decision. It was accepted that the employee clicked to accept the terms of the plan even though he did not read the terms. The court held that this constituted notice and that by accepting the terms without reading them, the employee could not be put in a better position than an employee who did read the terms of the plan.

Tapestry comment
This outcome means that companies offering share plans in Canada may be able to start relying on the standard tick box acceptance approach again. However, it is of course important to consider which provisions should be highlighted to participants as a matter of best practice. This will usually include termination provisions, in particular, still in Canada.

China - extends preferential tax treatment

On 29 December 2021, the Chinese authorities confirmed that the preferential income tax treatment for registered share plans under Circular 164 would be extended to the end of 2022. Previously, the tax treatment was due to expire on 31 December 2021. In addition, the beneficial income tax treatment for a one-time bonus has been extended to the end of 2023.

Tapestry comment
Although not unexpected, the extension of the tax treatment for a further year will be welcomed by share plan employees in China. On the webinar, we will also discuss the tax filing requirements under the updated Circular 35, which relate to the preferential income tax treatment for share plans.

Data Protection - global update

The spread of data protection legislation continues. As discussed in previous alerts, there has been a flurry of activity as countries around the globe move to put in place rules that, to a greater or lesser extent, follow the EU ‘gold standard’ set by the GDPR. Over the past few months we have seen developments in Saudi Arabia, UAE and Vietnam.

Tapestry comment
Many countries are following the lead of the EU and putting in place robust rules for dealing with personal data. This is not a share plan specific issue but as share plans are often operated globally, rules surrounding how employees agree to their data being used, and restrictions on the transfer of personal data, impact on the operation of share plans. We will discuss a few of the recent updates.

Global tax rates

For many countries, revised tax rates start on New Year’s Day. Often the rates are only announced in the last days of December, and in some cases the final figures are not available until well into January, sometimes later. Our international advisors provide us with new rates to update OnTap as quickly as they become available. Current changes include: Colombia and Indonesia.

Tapestry comment
The above list is not exhaustive and we will discuss the detail of these changes in our 12 January webinar. Many countries have made adjustments to tax bands and to social security caps. If you need specific advice for any jurisdiction, please let us know. 

Netherlands - change to taxable moment withdrawn

As discussed in our alert (here), last October the Dutch government released details of a proposed change to the timing of the taxation of options which are subject to selling restrictions. Under the proposal, employees would be able to choose to defer the taxable moment of their options from exercise to the moment the underlying shares can be traded by the employee. The amendment was due to come into force at the start of 2022, but the proposal was withdrawn by the Dutch government. The suggestion is that the proposal will be replaced by new rules that will apply to unlisted or start-up companies only. In any event, it is unlikely that there will be any new legislation in place before 2023.

Tapestry comment
It is disappointing that this practical proposal has not been taken up by the Dutch government. If we hear any more news on this, we will let you know.

If you have any questions, or would like to discuss any element of legal and tax compliance for your global incentive plans, do get in touch - we would be delighted to help!

Emma, Sonia and Tom