United Kingdom
Form 42
If your company operates an unapproved share plan for employees or directors, or they have acquired shares in the company, you have an obligation to report it on Form 42.
In most cases, any share transactions involving employees are reportable.
Examples of what you must report:
- The gift or purchase of shares by employees or directors.
- The grant or exercise of options granted to employees or directors.
- Anything that changes the value of the shares held by employees or directors.
- The sale of employees’ or directors’ shares for more than their market value.
- Cash cancellation payments to employees or directors.
When?
You must complete and file Form 42 before 6 July with HM Revenue & Customs. If you have been issued with a notification to complete Form 42, you must file the return by that date – even if you have nothing to report.
What happens if you don’t report on Form 42?
A company is warned of its failure to make a report before penalties are applied. Up to £300 for every employee involved and £60 per day that the report is outstanding might be applied.
What if you haven’t received a notification to complete Form 42?
If a former, current or prospective employee or director has acquired shares or rights to shares, or their existing rights have changed, a Form 42 must be completed.
You do not need to complete a Form 42 if you have not been notified to complete one and there is nothing to report.
Do I have to complete other returns relating to shares?
The grant or exercise of options under company share option plans, savings related share option plans, Enterprise Management Incentives or an award of shares under a Share Incentive Plan are reported on their own returns where we can too provide assistance. They must also be made before 6 July.
Find a partner
To find out more you can also contact your local BDO adviser.