Companies that grant UK employees equity from "unapproved" schemes have to file an "other" annual return with HMRC by July 6th following the end of the tax year. This filing reports activity (grants, exercises, settlements, terminations, expirations) related to grants during the tax year. You can generate your return in seconds with Ledgy.
Please note:
Ledgy populates 3 of the 9 tabs in HMRC's template: Other_Grants_V4, Other_Options_V4 and Other_Acquisition_V4 (the remaining tabs will be included in the exported file but not contain any data).
Ledgy leaves several columns blank for which we do not have data (e.g. security restrictions). Please review all columns and answer manually if necessary.
Unpublished transactions are included in the return, so make sure there are no draft transactions you don't intend to report.
Due to limited data on past residencies, all employees (even non-UK) for the selected plans are included in the report. You may have to manually remove non-UK employees if they've received grants from a selected plan.
Stock splits are ignored when calculating valuations and quantities, so if you have a stock split your return may require manual adjustments.
You must ensure Ledgy data is up-to-date in order to generate an accurate return.
Monetary values should be reported in GBP. If your company's base currency is not in GBP, you should set the currency of the relevant transactions to GBP.
Ledgy makes assumptions for certain columns that may need manual adjustment. See column guidance for more details.
Ledgy's
.odsexport is designed to match the HMRC template exactly, so please do not change the format. Returns that do not match HMRC's template will be rejected.Returns cannot be retrieved once submitted to HMRC, so we recommend saving your final submission in a secure location, such as Ledgy's data room.
For more info, please see the official guidance from HMRC.
Table of contents
How it works
1. Prepare your valuation, transaction, stakeholder, and company data
The return is populated with information from your transaction history, so this data must be comprehensive and accurate. You need to add the following:
Grants with strike price in GBP
Exercise, cash settlement, equity settlement, and termination transactions for any grants where these events have taken place
Valuations (type:
Unapproved (UK)) on or before the grant date with: AMV, UMV, expiry date, HMRC reference (if agreed with HMRC), and the relevant share classStakeholder custom field named "NIN" to populate national insurance numbers
PAYE reference in Company Settings > Company Profile.
2. Select the appropriate tax year
Now you're ready to generate your return. Navigate to Reports > Compliance > Other annual return to view your return. Select the desired tax year to filter for events dated within that date range. FYI: the UK tax year runs from April 6th to April 5th.
3. Select the plans to include in your return
The "other" return reports on any unapproved (e.g. not EMI or CSOP) equity plan that is relevant to UK employees. You must specify which plans you want included in the return.
4. Preview the report values
You can see the values Ledgy has calculated for each column in-app. Check if any data is missing (see troubleshooting). You may see warnings at the top of the page regarding missing data.
5. Download the return for final review
If you're happy with what you see in-app, you can download the return using the button in the top right of the page. Ledgy exports your return in the exact format of the HMRC template, so it can be submitted right away. However, you should review and populate any columns that Ledgy is unable to answer. See column guidance for more details.
6. Submit to HMRC
Returns are submitted on the HMRC website here. HMRC offers a checking service to catch any formatting errors. You can upload your submitted returns to Ledgy's data room for safe keeping.
Column guidance
Below are notes on Ledgy's support for specific questions/columns in the return:
Disclosable tax avoidance scheme - Ledgy does not have the relevant info and always answers NO.
Grantor company - Same as the employing company on Ledgy.
Company whose securities under option - Same as the employing company on Ledgy.
Listed on exchange - Ledgy assumes you are a private company and always answers NO.
HMRC agreed market value - If you add an HMRC reference to the relevant unapproved valuation this column will be YES, otherwise NO.
Market value at exercise date - Ledgy leaves this blank regardless of the unapproved AMV/UMV on Ledgy, since the answer depends on whether the security is restricted. Please manually answer accordingly.
Troubleshooting
If you're not seeing the expected data in the report, please check the following:
You've selected all the relevant plans to include in the report.
You've added valuations of the type
Unapproved (UK)on or before each grant date (and the valuations are not expired).Make sure you've created a stakeholder custom field named "NIN" to populate stakeholder national insurance numbers.
If PAYE reference is missing, add it in Company Settings > Company Profile.
FAQ
Which data goes into each sheet?
Other_Grants_V4 - Grants from unapproved option, warrant, or RSU schemes.
Other_Options_V4 - Cash settlement, termination, or expiry transactions from unapproved option schemes, plus equity and cash settlement events for RSUs.
Other_Acquisition_V4 - Stock grants of actual shares, e.g. growth shares. Ledgy does not include share issuances or transfers.
Why do RSUs go in the first two tabs?
While they aren't technically options, RSUs are considered to have a similar structure by HMRC, and therefore are reported in the options tabs. Note that any RSU equity settlements with withhold-to-cover will result in two lines in Other_Options_V4, one for the shares awards and one for the cash payment resulting from the withholding.
How are first name, second name, and last name determined?
You enter Full name for stakeholders on Ledgy. For the annual return, we take the first string of the full name as first name, and the last string of the full name as last name. Everything in between will be considered a second name.