Employment related securities bulletin 60 (April 2025)
Source: gov.uk (2025-04-30)

Find out about changes to process for employer’s National Insurance contributions joint elections, the filing dates for employment related securities (ERS) return and enterprise management incentives (EMI) scheme return and notification to avoid penalties.

Employer’s National Insurance contributions joint elections — changes to the administration process

You and your employee can make a joint election to transfer the liability for employer’s National Insurance contributions to the employee (https://www.gov.uk/guidance/transfer-employers-national-insurance-to-employees), in specific circumstances.

On 28 April 2025 the government announced changes to simplify the administration of making a joint election. This change took effect from 1 May 2025.

If you use the HMRC pre-approved legal document when entering into a joint election, you’ll no longer need to get our approval.

If you decide to use your own legal document you should send it to us for approval before asking an employee to enter into an agreement. It can take up to 30 days, for us to either:
- give an approval
- send a reply stating what changes are required or what information is needed
Whether you use the pre-approved or your own legal documents, you must keep copies for your own records and present them to us if requested.

You can read more information in the employment related securities manuals:
- chapter ERSM170750 — PAYE & NICs: NICs elections & agreements (https://www.gov.uk/hmrc-internal-manuals/employment-related-securities/ersm170750)
- section 2 — ‘purpose and scope of election’ of chapter ERSM170760 — PAYE and NICs (https://www.gov.uk/hmrc-internal-manuals/employment-related-securities/ersm170760)
Employment related securities end of year returns — reminder

You must submit a return or a nil return:
- on or before 6 July 2025 to avoid receiving a late filing penalty
- for every scheme that you’ve registered on the employment related securities online service
- using the correct and most up to date end of year return template — read the section ‘End of year return templates and forms’ in Employment related securities: detailed information (https://www.gov.uk/government/collections/employment-related-securities-detailed-information)
If you’ve stopped being an employer and have ceased your PAYE scheme, you’ll need to check if you need to cease your employment related securities scheme.

If you’ve registered a scheme in error, or it’s no longer operating, you must:
- tell us the scheme has ended (https://www.gov.uk/guidance/tell-hmrc-your-employment-related-securitiesscheme-has-ended)
- submit a return or nil return for the tax year in which the final event date falls
Save a copy of your return for your own records before you submit it.

Enterprise management incentive scheme notification — reminder

You must submit on or before 6 July 2025:
- an end of year return (https://www.gov.uk/government/publications/enterprise-management-incentives-end-of-year-template) for all your live enterprise management incentive schemes
- a notification (https://www.gov.uk/guidance/submit-an-enterprise-management-incentives-emi-notification) — if you’ve granted options in the tax year 2024 to 2025
Save a copy of your return and notification for your own records before you submit it.

Finance Act 2025: Changes to Employee Benefit Trusts

At Autumn Budget 2024, the government announced several changes to the conditions which need to be met for a transfer into an employee benefit trust (EBT) to be exempt from Inheritance Tax, with effect from 30 October 2024. These changes were introduced alongside several other changes to the regime for employee ownership trusts (EOTs).

The changes to employee benefit trusts have now been legislated in sections 58 to 60 of Finance Act 2025. The new legislation amends sections 13 and 28 of Inheritance Tax Act 1984 to:
- make sure it is clear that the restrictions on connected persons benefiting from an employee benefit trust must apply for the lifetime of the trust
- restrict the Inheritance Tax exemption to where the shares have been held for 2 years prior to settlement into an employee benefit trust — where there has been a share reorganisation, the shares previously held will be taken into account in considering the 2-year holding period
- make sure that no more than 25% of employees who can receive income payments should be connected to the participator in order for the employee benefit trust to benefit from favourable tax treatment
For more information, read the tax information and impact note — taxation of employee ownership trusts and employee benefit trusts (https://www.gov.uk/government/publications/changes-to-the-taxation-of-employee-ownership-trusts-and-employee-benefit-trusts/taxation-of-employee-ownership-trusts-and-employee-benefit-trusts) announced at Autumn Budget 2024.

Further guidance will be available shortly in the Inheritance Tax manual.