½Û×ÓÊÓƵ

Introduction

Awards of securities, exercise (or vesting) of securities options and certain other events relating to employment related securities (ERS) may be liable to income tax as earnings under ITEPA 2003 s 62, or the special ERS rules under ITEPA 2003 ss 417 – 554 (Part 7).

The tax charges may be personal tax charges for the employee via self-assessment, or employers may be obliged to withhold income tax and NIC under PAYE.

This note aims to set out which ERS related tax charges, and in what circumstances, employers must operate PAYE and NIC, and the practical implications of doing so.

Share awards

An outright award of ERS represents ‘money’s worth’ and is taxable under ITEPA 2003, s 62. The taxable amount is the market value of the securities less any payment made by the employee. Market value is de-fined at TCGA 1992 ss 272 - 273

The ‘money’s worth’ taxable amount may be a personal tax liability of the employee, payable via their self-assessment tax return, or there may