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HMRC Guidance - Employee Share Schemes and Covid 19

10 June 2020

HMRC have issued an updated bulletin relating to employee share schemes and Covid 19 – see: ERS Bulletin 35 addressing some concerns about the impact, but leaving others to be considered separately.


Clarification of the impact of Furlough on EMI (see our earlier comment) had been expected, but HMRC have deferred this, simply saying that they will provides updates on EMI “as soon as possible”.


Three points have been confirmed in relation to SAYE:

(i)There is a general provision allowing employees to delay the payment of monthly contributions by up to 12 occasions in total. This period is extended (with reference to limitations on the period) where the additional payments are missed due to coronavirus. Any payment holiday will defer the maturity date by the number of months missed.

(ii)Furlough payments can constitute salary and SAYE contributions can continue to be deducted from furlough payments.

(iii)Employees taking unpaid leave will be permitted to make payments by standing order.


With SIPS:

(i)SIP contributions can continue to be deducted from furlough payments.

(ii)Participants can stop their deductions but will not be permitted to make up missed payments.


If employees were granted options before coronavirus, the options will remain qualifying on the basis of them having been full time directors or employees at the date of grant of the option.


Once an EMI valuation has been agreed, normal HMRC practice is that it needs to be refreshed for options granted after the expiry of 90 days. This period is extended to 120 days for any valuation agreed on or after 1st March 2020.


The deadline for completing year end returns for employee share schemes has not been extended, but HMRC have confirmed that they may consider coronavirus as a reasonable excuse on appeal, but that the appeal should explain how the company was affected by coronavirus when making its appeal.


We are writing further articles to express our views and to stimulate discussion. If there are aspects you wish to discuss in the meantime, please contact Jane Jevon (

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