Form 42

Nil returns

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Employer issues shares to an employee which is required to be reported on Form 42. The shares are not EMI/CSOP etc. so no tax approved scheme. After the first year of reporting, HMRC have stated that you continually need to file nil returns once you have submitted the first return but this seems ridiculous, is there a way around this? 

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By ireallyshouldknowthisbut
22nd Jun 2021 10:51

Yes, once you enter the form 42 arena you have to keep filing annually.

However I know some companies completely forget to file one as this seem to be a largely forgotten bit of legislation based on the paucity of questions about it on here. I understand in the event HMRC note the omission the policy is to issue 2 warnings to file. In practice I have never been in this situation myself. I am not sure of the circumstance that would arise to prompt HMRC of the omission. Perhaps a PAYE inspection if such things still arise. Not sure. Not had one for years.

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By LFM
22nd Jun 2021 13:52

We had aa approved scheme which ended but we still had to file nil returns and got nowhere even after many years of nil returns!

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Psycho
By Wilson Philips
22nd Jun 2021 14:03

There's a very easy solution - have the client mark the 'scheme' as closed. (One of the points made by CIOT in a recent representation to HMRC was to allow agents to do this - they can't at present.)

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