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Employment Related Securities reporting – ensuring AIM company compliance

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Posted by Sebastian Salt on 14 April 2020

Seb Salt - Employee Shares and EMI Options Lawyer
Sebastian Salt Senior Associate

Acquisitions by directors (including NEDs) and employees of shares in their employer (or a member of its group) must generally be reported to HMRC before 6 July following the end of the tax year in which they took place.  Such reporting must be through HMRC’s PAYE Online service, with automatic penalties applying for non-compliance.

However, this obligation is relaxed (such that no reporting is likely to be required) where listed shares are acquired by directors and employees in their employer (or a group member) on the open market independently of the company and through an opportunity made available to all employees.  This relaxation only applies, however, to shares quoted on a “recognised stock exchange”.

Unfortunately, AIM does not constitute a “recognised stock exchange” for these purposes and does not therefore benefit from the relaxation – meaning that AIM listed companies are subject to additional share plan reporting obligations compared to fully listed entities. 

This further burden means that in addition to reporting typical employee share incentive plan awards (such as LTIPs, Performance Share Plans and option plans), AIM companies will also have to report independent share acquisitions by directors (including NEDs) and employees in the following circumstances to ensure compliance:

  • in the market (even if through a broker);
  • as a result of rights issues, bonus issues and scrip dividends; and
  • under certain dividend reinvestment arrangements.

In our experience AIM companies are less aware of the need to report shares acquired independently by their directors and employees.   If you would like any support with these matters or to discuss your reporting obligations more generally please contact our team.

About the author

Sebastian Salt

Senior Associate

Seb specialises in the design and implementation of employee incentive arrangements.

Sebastian Salt

Seb specialises in the design and implementation of employee incentive arrangements.

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